Presented by Meyers Nave, this edition of San Diego’s Data Bites covers December 2021, with data on employment and more insights about the region’s economy at this moment in time. Check out EDC’s Research Bureau for even more data and stats about San Diego.
- San Diego’s unemployment rate dropped to 4.2 percent in December from 4.6 percent in November; the number of people unemployed is nearly half of what it was a year ago.
- A banner year in venture capital funding appears to be driving job growth in Scientific Research and Development Services, which ended 2021 up 13.6 percent.
- The demand for skilled workers far exceeds the current supply of talent within the region. Key positions that employers are hiring for have high salaries and educational requirements.
Job losses and lower labor force participation in December
San Diego saw its unemployment rate fall again in December to 4.2 percent, however labor force participation declined as well. Compared to December 2020, there are now 56,900 fewer people unemployed. While many have returned to work as evidenced by the strong job growth throughout 2021, more than 65,000 people continue to be out of work. The region’s unemployment rate remains below that of the state and above the national average, 5.0 percent and 3.7 percent respectively, as it has been throughout the year.
Total nonfarm employment dropped by 1,200 jobs in December. Construction and Healthcare and Social Assistance experienced the greatest monthly declines, each shedding 2,400 payroll positions. However, many of the job losses were offset by gains in other sectors. Professional and Business Services led the way with 4,100 jobs added in December and is now up 5.3 percent from December 2020. Trade, Transportation, and Utilities also increased by 2,500 jobs, driven by Retail Trade, which boosted the overall sector with 1,200 jobs.
Record venture capital funding is propelling job growth
In 2021, the region pulled in nearly $9 billion of venture funding dwarfing anything seen in years past. While the biggest venture capital deals have gone toward technology startups, San Diego Life Sciences companies pulled in $1.6 billion more than their tech counterparts throughout the year. The surge of venture capital dollars is beginning to translate into faster job growth in San Diego.
Scientific Research and Development Services added 1,700 jobs in December after averaging monthly gains of just 300 jobs during the first 11 months of 2021 and is now up 5,200, or 13.6 percent, compared to a year ago. This represents a rapid acceleration from the 7.0 percent growth rate of previous five years. Looking further back, we see that the industry has nearly doubled its contribution to the regional economy, which was slightly above $5 billion in 2010 and is now about $9.7 billion.
While an additional 5,200 jobs in a high paying industry is certainly welcome, an analysis of job postings suggests that San Diego employers were trying to hire as many as 39,000 more workers in 2021. The demand is mostly for high-skilled, high-paying positions. In fact, more than 21 percent of jobs in the industry are concentrated in just four occupations: medical scientists, biochemists and biophysicists, project management specialists, and software developers. Importantly, all these positions typically require a four-year college degree at the entry-level.
Employers have reported increasing difficulty hiring throughout the year, leaving the region woefully undersupplied in terms of the talent needed to sustain industry growth. Ensuring that the region is an affordable one is paramount to attracting and retaining talent. In the long-term, San Diego must invest in the next generation workforce and develop a pipeline of skilled talent to meet employer demand. Looking at the demographics of the region, the focus must be on an inclusive economic development strategy that support Black and Brown youth at the same level of their white peers. Doing so will safeguard the future competitiveness of the region.