California has the highest unemployment rate in the U.S. for the second year


A new jobs report discloses that California maintained an unemployment rate of 5.3% in April for the third consecutive month.

California holds the highest unemployment rate in the nation, with the national average at 3.9%. Washington, D.C., follows closely with an unemployment rate of 5.2%, and Nevada stands at 5.1%.

A year ago, California’s rate was 4.5% — still the highest in the country at that time.

Michael Bernick, former Director of the Employment Development Department, told the Sacramento Bee that the elevated unemployment rate can be linked to small businesses battling higher prices and reduced consumer spending, persistent tech layoffs above pre-pandemic levels, and the cessation of significant federal and state pandemic and post-pandemic expenditures.

In March, there were 100 job openings for every 140 unemployed workers. Less than two years prior, there were roughly two job openings for each unemployed individual. Over the past year, the number of unemployed workers reached 164,000.

Despite this, April saw an addition of 5,200 non-farm jobs to the economy, a decrease from the 18,200 jobs added in March.

As the state manages the highest unemployment rate in the nation, it also confronts a debt of around $21 billion accrued to cover unemployment benefits costs.

Employers face increasing payroll taxes to fund unemployment benefits and to address a state surcharge and federal surtax aimed at repaying the debt principal. This will likely add to operational costs for businesses and reduce employee wages. Additionally, concerns have been raised that the state does not require businesses to contribute sufficiently to the unemployment insurance fund needed by workers.

Analysts indicate that the state’s unemployment benefit deficit is largely due to the management of the $43.5 billion received from the American Rescue Plan. Instead of addressing the unprecedented number of unemployment claims during the pandemic, the state elected to use the funds for additional stimulus checks for residents.

​​“California had options, and it chose the spending option instead of the responsible option,” Matt Weidinger, a senior fellow at the American Enterprise Institute, told the Los Angeles Times.

California has already paid $650 million in interest on the loan and will owe $550 million by Sept. 30.

Elaine Mallon
Elaine Mallon
Breaking news reporter.

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