Unemployment

What share of the Bay Area’s labor force does not have a job?

Unemployment

Definition: 
Unemployment refers to the share of the labor force – by place of residence – that is not currently employed full-time or part-time. The unemployment rate reflects the strength of the overall labor market.

With a talented workforce of some 4.1 million women and men, the San Francisco Bay Area is one of the nation’s most dynamic and productive regional economies. In the late 1990s, the Bay Area rode a technology boom to achieve historically low levels of unemployment – until the dot-com boom went bust and joblessness spiked sharply. The Bay Area suffered along with the nation and much of the world during the Great Recession, but its recovery from the recent downturn has been exceptionally strong.

Regional Performance
Six years into an economic recovery and boom, unemployment in the Bay Area has returned to pre-recession levels.

The Great Recession led to a dramatic spike in unemployment across the country. In the Bay Area, the regional unemployment rate more than doubled, rising from 4.5 percent in 2007 to 10.5 percent in 2010. At the 2010 peak, over 388,000 workers in the Bay Area were considered unemployed. During the current economic boom, the unemployment rate has consistently declined each year since 2010. The current rate of 4.3 percent is similar to the level experienced during previous economic booms in the late 1990s and mid-2000s.

Of the nine counties in the Bay Area, Solano County had the highest rate of unemployment in 2015, at 6.1 percent. For most years since 1990, Solano County has topped the list of Bay Area counties in relation to unemployment – dipping below the regional average only in 2002 and 2003. In comparison, Marin and San Mateo counties have fared significantly better, with unemployment rates remaining consistently below the regional average since 1990.

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Historical Trend for Unemployment Rate

 
 
 
Local Focus
The majority of Bay Area communities have seen unemployment declines of more than five percentage points since 2010.

Oakland, the third most populous city in the region, exemplifies this regional trend. The unemployment rate in Oakland was 5.9 percent in 2015, a 9.5 percentage point improvement from its peak of 15.4 percent during the height of the Great Recession. This shows improved conditions for the labor force, but also changing demographics have played a role as new residents move in. While Oakland has seen a strong recovery from the Great Recession, the city continues to be among other medium-to-large-size cities like Vallejo, Antioch, Hayward, Richmond and Fairfield, which have traditionally experienced above-average levels of unemployment.

Overall, a larger share of Bay Area cities is experiencing low unemployment rates. In 2015, 80 percent of Bay Area cities had unemployment rates below 5 percent. Our region’s lowest unemployment rates can be found in higher-income suburban cities, such as Corte Madera, Mill Valley and Fairfax in Marin County; and Burlingame, Menlo Park and Hillsborough on the Peninsula. Residents of these cities are relatively highly-educated with skills in high demand and therefore tend to experience below-average unemployment rates.

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2015 Unemployment Rates for Cities

 
Click on a shape on the map for more information.
 
 
 
National Context
Our region’s strong economy has resulted in a robust job market with low rates of unemployment.

From 2010 to 2015, the Bay Area unemployment rate decreased by nearly six percentage points, the greatest reduction of any major U.S. metro area. Of these metro areas, only Dallas has a lower unemployment rate than the Bay Area, a clear reflection of our region’s robust recovery. This trend is in line with historical patterns. Over the past 25 years, our region has seen unemployment crest during recessions at levels above the national average, but during periods of economic growth similar to today, the Bay Area’s unemployment rate has been among the nation’s lowest.

Significant differences in the unemployment rate across metro regions highlight the key difference among local economies. In the Bay Area, low unemployment rates are attributed to the growing tech sector, while in Houston the recent spike in unemployment can be associated with its contracting energy sector. Meanwhile, in the nation’s capital, historically low unemployment rates can be linked with the traditionally stable federal employment sector. Across the country, the share of the labor force that remains without a job continues to decline in all major metro areas.

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Sources: 

California Employment Development Department: Historical Unemployment Rates (1990-2015)

Bureau of Labor Statistics: Local Unemployment Statistics (1990-2016)

Image: Flickr (Creative Commons license), Photographer: neetalparekh

Methodology Notes: 

Unemployment rates produced by EDD for the region and county levels are not adjusted for seasonality (as they reflect annual data) and are final data (i.e., not preliminary). Unemployment rates produced by BLS for the metro regions are adjusted for seasonality; they reflect the primary MSA for the named region, except for the San Francisco Bay Area which uses the nine-county region. The unemployment rate is calculated based on the number of unemployed persons divided by the total labor force. Note that the unemployment rate can decline or increase as a result of changes in either variable.