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California Labor Market Expansion Continues Amid Omicron; State’s Unemployment Rate Dips Despite Growth in Workforce in Latest Numbers

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Uneven Recovery Among Industry Sectors Persists 

California’s labor market continued to expand at a steady pace in December, with total nonfarm employment in the state growing by 50,700 positions over the month, according to an analysis released jointly by Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting and Development. California’s growth accounted for just over one-quarter of the nation’s overall job gains for the month. California’s gains in November were also revised up to 52,200 in the latest numbers, a 6,500 increase from the preliminary estimate of 45,700.

While California added jobs at a healthy pace in 2021, as of December 2021, the state has recovered just 72% of all the jobs lost in March and April 2020, and there are now 768,600 fewer people employed in California compared to February 2020. Total nonfarm employment in the state has contracted 4.4% since the pandemic crisis began compared to a 2.3% drop nationally. However, during 2020, California added jobs at a faster rate than the national economy. Payrolls in the state expanded 6% from December 2020 to December 20201, well above the 4.5% increase nationally over the same period.

“Many states have fully recovered the jobs they lost during the pandemic,” said Taner Osman, Research Manager at Beacon Economics and the UCR Center for Forecasting. “Since California is still playing catch-up, we expect to see stronger job growth in 2022 compared to the nation overall.”

California’s unemployment rate fell to 6.5% in December, a 0.5 percentage-point decline from the previous month. However, the state’s unemployment rate remains elevated relative to the 3.9% rate in the United States overall. California’s labor supply has contracted significantly since the start of the pandemic. Despite an expansion of 30,200 workers in December, since February 2020, the state’s labor force has shrunk by 358,100 workers, a 1.8% decline.

Industry Profile

While some sectors have recovered all the jobs lost during the pandemic, in many industries, there are still far fewer workers employed compared to pre-pandemic levels.

  • Leisure and Hospitality led gains in December, with payrolls expanding by 15,000. This is welcome news as the sector still has a long way to go to recover all the jobs it lost due to the pandemic. Payrolls remain down 15.3% compared to February 2020.
  • Other sectors posting strong gains during the month were Professional, Scientific, and Technical Services (8,900), Transportation, Warehousing, and Utilities (7,200), Health Care (4,700), Government (4,100), Administrative Support (3,200), Information (3,100), and Other Services (3,000).
  • Sectors such as Professional, Scientific, and Technical Services and Transportation, Warehousing, and Utilities have been major drivers of job growth in the state, with payrolls up 3.9% and 9.0%, respectively, compared to pre-pandemic levels.
  • Job gains were broad based in December with Retail Trade (-7,300) and Management (-100) being the only sectors to post losses during the month.

Regional Profile

  • Regionally, job gains were led by Southern California. Los Angeles (MD) saw the largest increase, where payrolls grew by 27,900 (0.6%) during the month. Orange County (7,900 or 0.5%), the Inland Empire (4,400 or 0.3%), San Diego (4,200 or 0.3%), and Ventura (1,300 or 0.4%) also saw their payrolls jump. The Inland Empire (84.5%) has experienced the strongest recovery in Southern California, measured by the percentage of jobs recovered since the pandemic lows. The IE is followed by Orange County (73.7%), San Diego (68.6%), Ventura (67.8%), El Centro (65.0%), and Los Angeles (MD) (63.9%).
  • In the San Francisco Bay Area, San Jose experienced the largest increase, with payrolls expanding by 7,200 (0.6%) positions in December. San Francisco (MD) (7,000 or 0.6%), the East Bay (6,400 or 0.6%), Vallejo (800 or 0.6%), and Santa Rosa (500 or 0.3%) also saw payrolls expand during the month. Since April 2020, the pandemic lows, San Rafael (MD) (73.3%) has experienced the strongest recovery in the region, followed by San Jose (72.7%), Napa (63.4%), Santa Rosa (63.3%), Vallejo (62.8%), San Francisco (MD) (61.2%), and the East Bay (58.3%).
  • In the Central Valley, Sacramento experienced the largest monthly increase, as payrolls expanded by 2,500 (0.2%) positions in December. Payrolls in Fresno (2,400 or 0.7%), Stockton (800 or 0.3%), Modesto (500 or 0.3%), Madera (300 or 0.8%), Merced (300 or 0.4%), Yuba (300 or 0.6%), and Redding (200 or 0.3%) increased steadily as well. Since April 2020, Redding (101.3%) has experienced the strongest recovery in the region, followed by Stockton (90.7%), Yuba (83.0%), Fresno (81.2%), Modesto (77.6%), Sacramento (76.2%), and Madera (74.5%).
  • On California’s Central Coast, Santa Cruz added the largest number of jobs, with payrolls increasing by 1,600 (1.7%) during the month. Santa Barbara (1,200 or 0.6%), Salinas (900 or 0.6%), and San Luis Obispo (300 or 0.3%) also saw payrolls expand during the month. Since the lows of April 2020, Salinas (78.6%) has experienced the strongest recovery in the region, followed by Santa Barbara (74.7%), Santa Cruz (57.6%), and San Luis Obispo (56.1%).

The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.

Opinion

KTGY Announces Unanimous Approval of Community-Serving Shopping Center in North Redlands, California

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KTGY’s design transforms an underutilized site into a neighborhood anchor and showcases Regency Centers’ commitment to the growing residential community


KTGY, an award-winning design firm focused on architecture, interior design, branded environments and urban design, announces that The Marketplace, a Whole Foods-anchored retail development designed for Regency Centers, received unanimous approval from the Redlands City Council on Feb. 17, 2026, clearing the way for the development to move forward to building permits and construction. Planned on an 8.18-acre vacant site at the northeast corner of Lugonia Avenue and Tennessee Street, the center sits in the heart of one of North Redlands’ fastest-growing residential areas.

The Marketplace is planned as a 71,400-square-foot neighborhood retail center anchored by Whole Foods and supported by four shop buildings and a dedicated drive-through pad. Designed to LEED Silver standards, the development reflects Regency Centers’ approach to placemaking, emphasizing retail environments that are authentic to their neighborhoods and foster long-term community connection. KTGY’s design reinforces and complements this vision through context-responsive architecture and a site plan shaped around community needs. The development transforms a long-underutilized site into a neighborhood anchor positioned to serve existing residents and new housing planned to the north and east.

“Working with KTGY and Whole Foods Market on The Marketplace has been a genuinely rewarding process,” said Ray Kayacan, vice president of investments at Regency Centers. “Redlands is a community that’s growing fast, and we’ve been intentional about making sure this development grows with it. Getting unanimous approval from the City Council speaks to the alignment we built with the city early on, and I think it reflects how well the full team executed against a shared vision.”

KTGY’s design team approached the site with the task of balancing client goals, tenant requirements and the needs of a future community while maximizing retail density and flexibility. The site’s proximity to the 210 freeway and its high parking requirements demanded a precise and efficient layout. KTGY allocated the required parking and EV stalls, utilized compact stall allowances and directed truck circulation around the site perimeter. The result is a finely tuned example of suburban retail that serves nearby neighborhoods, attracts customers off the freeway and creates a strong leasing environment for tenants.

The Marketplace is anchored by a 36,000-square-foot Whole Foods and organized around four retail buildings that can be flexibly divided into as many as 18 storefronts. A fifth pad building is planned for a drive-through use with its own dedicated circulation. Early concepts explored a more industrial character, but to secure the grocery anchor, KTGY adapted the development’s aesthetics to align with Whole Foods’ contemporary brand requirements.

The final design features simple, contemporary building forms emphasized by brick columns and tower elements, with a connective brick treatment carried across the center. Roofline and material variations add visual interest, while industrial accents, including gooseneck lamps and standing seam metal awnings, reference the area’s historic context. The architecture incorporates cementitious siding, stone treatments at key corners and parapet-screened rooftop equipment, creating an earthy, warm palette that responds to the surrounding neighborhood.

“Redlands has a real sense of place, and that shaped how we thought about this project from the start,” said Kayacan. “With one major housing development underway and another planned nearby, this site had an obvious gap to fill. Residents are going to have a Whole Foods, flexible retail that can support a range of needs, and a place to gather.”

KTGY also shifted back-of-house functions and truck circulation away from the main parking field, raised the sidewalk and added a landscaped berm to buffer pedestrians from drive-through and freeway activity. A lighter entrance structure at the Whole Foods façade breaks up the flat roofline and creates space for outdoor seating, and the development is rounded out by landscaped buffers and a shaded corner plaza where neighbors can gather.

Buildings are arranged around the perimeter with parking in the center, creating a clear and efficient circulation pattern. The site includes five access points: two primary driveways from Lugonia Avenue and Tennessee Street, secondary entries from both streets and a connection to the Tennessee Village development to the north. The drive-through pad includes its own pocket of parking to support tenant operations.

Two major housing developments — Lugonia Village, with 541 homes, and Tennessee Village, with 460 apartments and commercial space — were approved nearby in 2024, reinforcing the need for neighborhood-serving retail in this corridor.

“Our team approached this site with a focus on maximizing retail density and creating flexible space that can support a range of tenants while meeting the needs of the city, Regency Centers and both existing and future residents,” said Brandon Wernli, associate principal at KTGY. “Balancing a tight site, high parking requirements and a late-stage design shift to meet Whole Foods’ brand standards required precision. The result is a contemporary retail environment that reflects Regency Centers’ commitment to creating neighborhood-serving places that connect with surrounding communities.”

“This development fills a meaningful gap in the built environment,” Wernli said. “With new housing planned nearby, The Marketplace will serve as a neighborhood anchor and a convenient place to shop, dine and gather. It’s a strong example of how thoughtful design can elevate everyday community experiences.”

Construction is expected to begin in late 2026, with completion anticipated in 2028.

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Opinion

Ontario International Airport Welcomes Avelo Airlines with New Nonstop Service to Sonoma County

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Expansion Connects Southern California Travelers to Northern California’s Premier Wine Destination

Ontario International Airport (ONT) continues its impressive growth trajectory with the recent announcement from Avelo Airlines about their exclusive nonstop service to Sonoma County and Northern California’s renowned wine country. Starting October 10, the service will operate twice weekly on Thursdays and Sundays, connecting travelers directly to the Charles M. Schulz Sonoma County Airport (STS).

Streamlined Travel Experience

Passengers choosing Ontario International Airport are set to benefit immensely, not just from the expanded destination choices but also from the significant time savings associated with flying out of ONT. Known for its convenience and efficiency, ONT offers a more relaxed and hassle-free travel experience compared to larger, more congested airports. The smaller scale and thoughtful layout of ONT allow passengers to navigate check-ins, security, and boarding processes much more quickly, reducing the stress often associated with air travel.

Local Impact and Convenience

“Atif Elkadi, Chief Executive Officer of the Ontario International Airport Authority, highlighted the benefits of the new service, stating, “We are thrilled to add Avelo Airlines to our family of air carriers as we continue to provide exciting new destinations and travel options for the millions of Southern Californians who have made ONT their airport of choice.”

ONT’s strategic location and accessibility play a crucial role in its popularity. Situated in the heart of Southern California’s Inland Empire, the airport is conveniently reachable for residents from San Bernardino to Riverside and the surrounding suburbs. The airport’s proximity to major freeways reduces travel time to the airport itself, which is a significant advantage for local residents and businesses.

Enhanced Access to Northern California

Andrew Levy, Founder and CEO of Avelo Airlines, expressed enthusiasm about the new route, saying, “We are thrilled to announce our new nonstop service from Ontario to the Bay Area/Sonoma County, offering travelers a convenient, reliable, and affordable way to one of the most beautiful and vibrant regions in Northern California.”

Jon Stout, STS Airport Manager, also noted the mutual benefits of the new connection, “It’s fantastic to see Avelo connect Sonoma County with Ontario. This new route will bring a new level of convenience for our local residents and our neighbors in the Inland Empire.”

ONT’s continued expansion and the addition of new routes like the one to Sonoma County reflect its role as a pivotal hub in the region. With the airport on track to exceed 7 million passengers this year and recent records showing more than 650,000 passengers in June alone, ONT is setting new benchmarks in serving the community.

A Gateway to Growth

With world-class facilities and a commitment to excellent customer service, Ontario International Airport is rapidly becoming the gateway of choice for travelers seeking both domestic and international connections. Elkadi proudly asserts, “With our world-class facilities, great amenities, and unparalleled customer experiences, we are proud to connect the world to one of the most dynamic population and economic centers in the country.”

As ONT continues to expand its services and streamline travel experiences, it solidifies its position not just as a transport hub but as a significant contributor to the economic vitality of the Inland Empire.

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Opinion

Surge in Unemployment Among California Youth Linked to Minimum Wage Hikes

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“We have to stop touting the minimum wage as a completely harmless policy, or as some kind of remedy for poverty and income inequality… it is neither.” 

In the past 18 months, California’s unemployment rate has jumped to the highest in the nation and a new analysis by Beacon Economics suggests that this peculiar increase could be a direct result of the state’s recent minimum wage hikes. Most concerning, according to the report, is that the current unemployment effect is specifically harming some of California’s most vulnerable residents—the state’s youth.

The new report highlights the fact that 90% of newly unemployed Californians over the past year and a half are under the age of 35 with the hardest hit group being teenagers. “This loss of youth work opportunity carries with it real long-run harm,” said Christopher Thornberg, Founding Partner of Beacon Economics and co-author of the new analysis. “It not only denies younger workers a critical source of income it deprives them of work experience that has been empirically shown to improve their chances of long-run success.” 

While the recent rise in unemployment in California has occurred in tandem with the state’s minimum wage hikes, the relationship likely extends beyond mere correlation. According to the analysis, the jump in unemployment is incongruous with other measures of the California economy, which have continued to expand at a respectable rate. In fact, both output and household income in the state are robust and growing either faster than or similar to the nation overall. Yet, the unemployment rate in the United States as a whole has barely budged in the past 24 months.

And there is yet another anomaly: throughout the recent rise in unemployment, there has been no corresponding increase in unemployment insurance claims. If laid off tech and entertainment industry workers were driving California’s higher unemployment rate, it would almost certainly be reflected, at least to some degree, in UI claims, according to the analysis.

“For far too long, researchers and advocates alike have held up the minimum wage as a harmless and effective policy remedy for poverty and income inequality, but it is neither of those things,” said Thornberg. “Evidence has shown us that minimum wages don’t do much to address the ills they are intended to correct, but carry a substantial cost, particularly for our state’s future workers.”

Although well intentioned, Thornberg, and co-author Niree Kodaverdian, argue that higher minimum wages cause prices to increase, which end up reducing real incomes for lower-skilled workers. Available data and past empirical studies show that wage floors do very little to divert income from higher income workers to lower income ones, which is how minimum wage laws are typically characterized by proponents.

The specific effect on youth is caused because as labor costs go up relative to other inputs, employers who might have used lower-skilled, entry level workers, such as teenagers, move towards hiring older, more experienced workers, according to the analysis. The idea is that if an employer is legally obligated to pay a higher wage, they will naturally hire more skilled and productive workers to offset higher labor costs. Since those under age 25 make up nearly half of minimum wage workers, this restructuring disproportionally affects the state’s youth.

The report firmly acknowledges the need for policies to help alleviate the strain on lower income households in pricey California but argues that this particular policy remedy doesn’t work as intended, and when pushed too far, can inflict real harm on some of the state’s most vulnerable residents. Better policy options, according to the authors, include the Earned Income Tax Credit, early childhood education, and increased training for lower-skilled adults.

The full analysis can be found here.

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