Merced County’s unemployment rate increased to 12.7 percent in July, up from 12.2 percent in June and nearly double the nation’s jobless rate, according to data released on Friday by the state Employment Development Department.
The latest number is an improvement from the county’s 14.5 percent unemployment during the same period last year, but still outpaces the state’s unemployment of 7.8 percent and the nation’s rate of 6.5 percent.
The 0.5 of a percentage point increase of Merced County’s unemployment rate from June to July can be attributed to a loss of 4,200 jobs in local government, said Pedro Vargas, a labor market consultant for the EDD. The majority of those jobs, about 4,100, were in public schools, which are currently on summer break.
“This takes into account the public education system, including UC Merced staff,” Vargas explained. “So anytime an educator, bus driver or janitor takes off for summer break, that can affect the (unemployment) rate.”
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Vargas said there could be a drop in the unemployment rate when educators return to school.
Merced County gained 400 jobs in trade and transportation in July, about 300 of them in wholesale trade and 100 in the food and beverage industry. Vargas said ag-related industries tend to hire more truck drivers at this time of year.
But the loss of 400-plus jobs when the AT&T call center at Castle Commerce Center closes this month looms on the horizon for the county unemployment rate. That impact could be seen in August, which will be reported by the EDD next month, officials said.
The ripple effect of AT&T’s announced closure was immediately felt by other businesses, such as Gracian’s Mexican Restaurant, which closed its doors. Five people were laid off from the eatery, which reported nearly 90 percent of its business came from AT&T employees.
Mi Pueblo Foods in Atwater also announced its closure in June, laying off 91 people.
Vargas said the loss of jobs from AT&T and Mi Pueblo might be balanced by a gain in leisure and hospitality jobs related to people taking summer vacations and construction jobs from the Highway 99 improvement projects.
Jackie Walther-Parnell, operations officer with Merced County’s Department of Workforce Investment, said her department participated in 11 workshops to offer job search services to AT&T workers.
“We’re already starting to see some of those folks coming into Worknet on their days off so they can get started on their job search,” she said. “With this many people being laid off, the sooner they come in and get assistance, it will increase their chances of finding a job.”
Mark Hendrickson, Merced County director of community and economic development, said the county is still “disheartened” by the announced closure, but officials are working on bringing new businesses to Castle.
“We would expect in the months ahead that closure will certainly impact the unemployment numbers accordingly,” Hendrickson said. “The county is pursuing every lead so as to attract a new user to the buildings formerly occupied by AT&T, leveraging the assets as a true ‘plug and play’ call center opportunity.”
Hendrickson said the latest unemployment figures illustrate a modest job growth from this time last year. “While this is positive news, it also shows there is still heavy lifting to do,” he added.