What are the odds a Californian will lose their job?

With lots of chatter about job insecurity across California, what are the odds you’ll lose your job?

Now, trying to apply the crystal ball to statewide unemployment patterns is tricky enough. Calculating your chances of getting sacked is a very individual matter of math.

However, economic history shows us how frequently Californians lose their jobs. My trusty spreadsheet analyzed three employment metrics from the Bureau of Labor Statistics that track missing paychecks over the past 20 years.

This math reveals only a few states have a more volatile job market than the Golden State.

Layoff math

The Job Openings and Labor Turnover Survey – better known as the “JOLTS” report – tracks the number of “layoffs and discharges” – or what you’d politely call involuntary departures.

Ponder these job cuts as a share of all workers over a year. Going back to 2005, an average year saw California bosses discharge 16% of their staff. That might seem high, but numerous industries have seasonal or temporary worker needs. It’s noteworthy that California’s layoff rate was No. 34 nationally and just below the median 17% among the states.

So, where in the U.S. are job losses most common? According to this math, Alaska was the highest with a 26% annual average, followed by Montana and Wyoming at 22%. Cuts were rarest in Washington, D.C., at 11%, followed by Minnesota and Virginia at 14%.

And California’s economic rivals? Texas ranked No. 40 at 15% job cuts annually, while Florida ranked No. 28 at 16%.

Out of work

The traditional unemployment rate provides a different window into who’s getting laid off.

These job-loss statistics track the number of individuals who report having no job compared with those who say they’re employed. However, this math includes workers who lost their jobs and were subsequently re-employed. So the cut count is muddled.

Notably, California’s unemployment rate averaged 7.1% over the last 20 years – the second-highest in the nation and significantly above the median rate of 5.7% among states.

The only state above California was Nevada at 7.5%. The lowest unemployment rates were in North Dakota, at 3%, South Dakota, at 3.2%, and Nebraska, at 3.3%. Texas ranked No. 29 at 5.4%, and Florida ranked No. 23 at 5.8%.

“Real” unemployment

Another much less discussed employment yardstick combines joblessness and those poorly served by the job market.

Consider underemployed workers and those who are discouraged by hiring conditions. Add those to the unemployment rate, and you get another view of who’s missing a solid paycheck.

Again, California fares poorly with this broad measure of joblessness, which some call the “real” unemployment rate.

The statewide average ran 13.35% over the past 20 years. That’s No. 2 among the states and well above the national median of 10%.

Nevada repeated as No. 1 at 13.38%. Lows were North Dakota at 5.8%, South Dakota at 6.5%, and Nebraska at 6.7%.

Rivals? Texas ranked No. 30 at 9.8%, and Florida, ranked No. 14, had a rate of 10.9%.

Bottom line

There’s an economist’s joke about layoffs: “It’s a recession if your neighbor’s laid off, it’s a depression if you lose your job.”

These statistical differences highlight another perspective gap – the difference between being let go and being out of work for any extended period.

To combine these risks, the 20-year average of the trio of job-loss metrics was tabulated into the “Sack Score” to approximate a worker’s chances of missing paychecks during a year.

That calculation shows the odds of a Californian getting sacked in a typical year are 12.1% – the sixth-highest Sack Score in the nation and above the 11% U.S. median.

The Sack Score was highest in Alaska at 14.7%, followed by Nevada at 13.8% and Michigan at 12.5%. It was lowest in Nebraska at 8.3%, and in South Dakota and Iowa at 8.8%. Texas? No. 35 at 10.2%. Florida? No. 25 at 11%.

But what about the worst-case scenario? In the past two decades, workers have received harsh reminders of limited job security twice: during the Great Recession and the pandemic era.

Using my Sack Score, California workers’ worst year was 2020, when 19.2% of workers lost their employment amid coronavirus lockdowns. That was the seventh-ugliest maximum among the states.

And California’s second-worst year for sackings was 18.1% in 2009, as the bursting real estate bubble crushed the economy.

Sack Scores show the nation’s worst was 2020 at 16.2%. The same year, Nevada hit 30.3%, the worst result among the states over the two decades.

Postscript

So, is recent job skittishness justified?

Well, 2024’s Sack Score for California was 9.1% vs. the 20-year average of 12.1%. And nationally, sackings were 8.1% of all jobs last year vs. the typical 11%

That’s a very decent employment market vs the historical norm.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com