June unemployment in Sonoma County declined to 11.5%, but uncertainty remains as the virus lingers

Sonoma County notched a second consecutive month in June when people returned to work, pushing further downward the unemployment rate from its near 80-year high in April.

Last month, the local jobless level was 11.5%, representing strong improvement in the labor market since a peak unemployment mark of 14.5% in April, followed by a 12.7% reading in May, according to data released Friday by the state Employment Development Department.

The June tally of residents out of work countywide was conducted by state employment officials the week ended June 12, so it didn’t reflect the full reopening of personal care services businesses and other sectors that resumed operations later in June.

However, labor market experts said the downward trend of joblessness offers little reassurance the area’s economic fallout from the coronavirus pandemic has eased much.

Release of the latest jobless rate came at the end of a week when Sonoma County was forced by the state to roll back to public health restrictions such as closing a range of indoor businesses, thereby forcing another wave of people to join the unemployment line — at least temporarily.

Local restaurants, wineries and breweries again shut dining and tasting rooms, but some continue to serve food and drinks outdoors. In addition, gyms, hair salons, barbershops, movie theaters, museums and malls, among other businesses, had to shutter for at least three weeks amid a resurgence of COVID-19 infections. These shutdowns and business limitations will harm an already fragile job market, and they offer a stark reminder of the punishment the virus continues to deliver to the county economy.

Robert Eyler, a Sonoma State University economist who closely tracks the local labor market, said it’s difficult to make “any grand claims” about improved joblessness, if the virus outbreak keeps causing a whiplash effect on area businesses.

It’s possible business reopenings in the second half of June that resulted in many local employers calling back workers “did not change the trajectory” of the county labor market, Eyler said.

To be sure, the June unemployment rate still shows great financial pain that COVID-19 has inflicted on the local business community, when compared to the June 2019 jobless level of 2.8%. Last month, there were still 29,200 unemployed residents in Sonoma County, a 9% decrease from May’s 32,100 figure. But it’s a whopping 306% increase from a year ago, when there were only 7,200 local residents unemployed.

Nearly 1 in 7 county residents lost their jobs in the first month of the coronavirus shutdown in March, when 35,100 jobs evaporated as public health officials imposed tight restrictions on business activity to slow the spread of the virus. Since then, about a third of those jobs, or 11,900, have returned, according to state employment department figures.

Eyler predicted much uncertainty in the county labor market through the rest of the summer. Major indicators of which direction it will go include the ability to suppress the virus outbreak and whether Congress approves another round of federal stimulus similar to the U.S. Small Business Administration’s Paycheck Protection Program that provided a lifeline to thousands of small businesses here and nationwide.

From May 9 through June 27, new weekly claims by Sonoma County residents for unemployment benefits have been steadily tracking below 4,000, down from a high of 17,041 new claims during the week of March 28.

Eyler said he is keeping his eye on possible shrinkage of the county’s overall labor force, which would indicate people who have given up looking for a job or positions have permanently disappeared. The local labor force in June was 253,600 people, a 2.7% increase from May, but a 1.3% decrease from a year ago.

Anecdotally, a number of employers still issuing pink slips, some permanent, reveals the softness in the local labor market. For example, Ferrari-Carano Vineyards and Winery notified the state this week it would make 95 permanent job cuts at its Healdsburg winery as of Sept. 1 after being acquired last month by Foley Family Wines of Santa Rosa.

Acre Coffee of Petaluma only has brought back 35 employees out of 98 workers it had on the payroll before the pandemic, owner Steve DeCosse said. It has permanently closed its downtown Santa Rosa and east Petaluma coffee shops to help manage the downturn in business since Acre’s customers now only have to-go menu options.

“In order to manage properly we have to scale down,” Decosse said. Acre now has four area coffee shops, as well as its Acre Pizza business in Sebastopol.

Russian River Brewing Co. of Windsor has permanently laid off 21% of the workforce it had before the pandemic began in March, going from 204 employees to 160 employees, co-owner Natalie Cilurzo said. The tally includes 26 workers temporarily furloughed.

Those furloughed employees, Cilurzo said, include 10 from its Windsor brewpub that had to close Monday as result of the new prohibition of indoor dining and drinking ordered by Gov. Gavin Newsom. The brewing company has not had to let go of more workers in downtown Santa Rosa, although the pub has expanded outdoor service as part of the city’s action to close a stretch of Fourth Street to traffic.

“The people we brought back when we were able to reopen (dining) in June we were able to keep, maybe at reduced hours, but they are still working” in Santa Rosa, she said.

Those out of work across the county are on edge because their $600 weekly federal bonus tacked on to typical unemployment benefits will stop at the end of July unless Congress approves an extension.

Silje Bottari, 41, of Sonoma, lost her job at an insurance company in August 2019 and has struggled to find work, while at the same time taking care of her children, ages 11 and 7. The pandemic has complicated her job search now that her kids are stuck at home and in-person school classes won’t soon resume.

“I could take a service job, but those are four- or six-hour shifts, and I can’t just leave them here,” Bottari said of her young children.

Bottari’s husband owns a landscaping company still operating, which helps cover the family’s rent and expenses. She has exhausted jobless benefits because she started collecting unemployment prior to the pandemic.

“It’s scary because it’s gone now,” she said of her unemployment compensation.

Barbara, 49, of Rohnert Park, who asked not to be identified by her last name, still hasn’t received unemployment back pay for when she had been furloughed as an optician from March through May. She’s one of potentially millions still awaiting payments due to backlogged jobless claims at overwhelmed state unemployment offices.

“I have called hundreds of times every single day trying to get through, and when I finally get through, they tell me they can’t help me,” Barbara said.

In a prepared statement, California employment department officials said employees are working “around the clock” to process jobless claims and that the agency has recently hired or extended offers to more than 4,000 new staff members.

Barbara’s 20-year-old son, who lives with her, has been able to collect his unemployment payments, which has gone a long way to help pay rent and support her 13-year-old daughter. For Barbara, returning to work part time last month has been another big help, as her savings dwindle.

In June around the region, Mendocino County reported a 12.3% unemployment rate; Lake County registered a 14.2% level; Napa County reported a jobless mark of 12.5%; and Marin County reported a 10% unemployment level, the third lowest in the state.

Meanwhile, California reported a dismal 14.9% jobless rate in June, as employers added a record 558,200 jobs, the state agency said. The U.S. unemployment rate last month was 11.1%.

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.