California Wildfires and Day-to-Day Job Impacts

Last year, we posted a blog examining the effects of Hurricane Harvey on job postings and, by extension, employment. Below, we take the same approach to look at the impacts of a different natural disaster prevalent in late 2017 and early this year: the wildfires in California. Specifically, we are focusing on the Tubbs Fire, which affected parts of Napa, Sonoma, and Lake counties in Northern California during October 2017; and the Thomas Fire, which affected Ventura and Santa Barbara counties in Southern California in December 2017.

While the financial cost of these wildfires will not reach the extreme of Hurricane Harvey, they have both had large impacts on their respective regions. The Tubbs Fire was the most destructive wildfire in California history, having destroyed over 5,600 structures, with cost estimates of $1 billion in lost property. Additionally, the wildfire burned over 36,000 acres and was associated with 22 deaths. The Thomas Fire was the largest wildfire in California history, having burned over 280,000 acres, and the 7^th most destructive in history having destroyed over 1,000 structures, along with being associated with one death.[1]

The purpose of this article is to see what impact, if any, each wildfire had on job postings and, by extension, employment in their respective regions. Similar to the Hurricane Harvey analysis, we are using JobsEQ RTI job postings data to look at new job openings during the times before, during, and after the wildfires. For the Tubbs Fire we are looking at job postings in Napa, Sonoma, and Lake counties while for the Thomas Fire we focus on job postings in Ventura and Santa Barbara counties.

To account for fluctuations in the data beyond the regional impacts of the wildfires (such as weekly volume patterns), the data below are seven-day moving averages[2] of new job postings. Furthermore, data are presented as job posting volume relative to the nation in order to account for seasonal patterns and other national fluctuations.

This first chart shows the number of new jobs posted in each region relative to 10,000 new jobs in the nation, with the period of each wildfire shaded in yellow. The first thing you can see in this chart is that while the Tubbs wildfire does appear to correspond with a significant decline in job postings in its affected region, the Thomas wildfire seems to have had very little impact on job postings in its region. Indeed, in the 30 days prior to the Tubbs Fire there were an average of 20.37 new job postings per 10,000 nationwide, and that average was quite stable. During the period of the wildfire, job postings dropped to a low of 12.47 per 10,000 on 10/11 – a decline of 39% from the pre-fire average. Similar to what we saw with Hurricane Harvey in Houston, post-disaster job postings volume increased to levels above the pre-disaster average and actually stayed above average for 28 consecutive days, from October 22 to November 18. (Online job ads in Houston, for comparison, remained above the pre-hurricane average for 12 days during that region’s recovery).

One thing to note here, however, is that some of this increase may not be due entirely to the fire recovery. The timing for the fire and recovery also fell in-line with the timing when some employers are ramping up hiring to prepare for the holiday season; and given that wine-making and wineries are such a large industry for the region, the Tubbs Fire region may be much more sensitive to holiday season hiring fluctuations. This may also account for the relatively large dip seen in the final days of 2017 in the chart above as well.

Moving on to the region affected by the Thomas Fire, we see that there doesn’t appear to have been any significant effect on job postings during the fire.[4] Before the fire in the month of November, the Thomas Fire region had a daily average of 33.88 new job postings per 10,000 in the nation. During the period of the fire, the average number of daily new postings was 34.69 per 10,000, a slight increase, but not a statistically significant change. Similarly, there are slight changes in the period following the fire— an increase after the fire reached 85% containment, followed by a small decline—however, these changes are not statistically significant.

To better see the difference in the effect on job postings in the times during and immediately following the fires, below is a chart of per 10,000 U.S. postings starting seven days prior to the fire and through fourteen days after the fire, for each region.

These charts show the stark difference in the impact on job postings. The next logical question is: why do we see such differences when both fires had devastating impacts on their regions? The answer appears to lie in where exactly these fires hit within the regions and the industries that make up the local economies of these regions.

The regions impacted by the Tubbs Fire—Napa, Sonoma, and Lake counties—are part of an area known as “wine country.” Indeed, wineries and grape vineyards are two of the largest industries in the region, with the wineries industry (NAICS[5] 312130) having the highest employment of any six-digit NAICS industry in the region.

These wineries and vineyards that the region is so heavily dependent on were heavily impacted by the Tubbs Fire, with many of them greatly damaged or destroyed.[6] The damage to these industries not only affected them, but every other industry in the region that is dependent on them; and that is consistent with what we see with the fall in job postings during the fire.

In contrast, while the Thomas Fire was absolutely devastating for its region, much of the damage appears to have occurred in residential areas[7] with relatively less employment. Additionally, employment in the region is more diverse with less dependence on any single industry, so the damage that did occur to businesses didn’t have the same impact on the overall economy.

Seeing the vastly different reactions in job postings volume to these similar disasters, what take away can we gain from this analysis? Obviously, every event and every region is different; and the impacts an event has on a particular region will vary. When it comes to unplanned events, such as a natural disaster, it can be especially hard to predict the economic and employment impacts and it is usually not until well after the event that the full impact is known. Using JobsEQ RTI job postings data, one can gain some insight in real-time, even as the event is occurring, on what kind of impact the event may have on a local economy by seeing the immediate impact on job postings volume.

[1] http://www.fire.ca.gov/communications/downloads/fact_sheets/Top20_Destruction.pdf

[2] This is the average of the seven-day period encompassing three days prior and three days following.

[3] Officially the Tubbs wildfire began on October 8 and lasted until October 31, when it reached 100% containment. For our analysis, however, when referring to the period of the Tubbs Fire, we use a time period of October 8 to October 16, when the fire reached 75% containment, the majority of the damage had already been done, and recovery had begun for some areas.

[4] The Thomas Fire began on December 5 and lasted until January 12, when it reached 100% containment. For our analysis, the period of the Thomas Fire is from December 5 to December 24, when the fire reached 86% containment.

[5] North American Industrial Classification System.

[6] https://www.mercurynews.com/2017/10/16/a-closer-look-at-the-22-wineries-damaged-by-wine-country-fires/

[7] http://ktla.com/2017/12/17/the-massive-numbers-of-the-thomas-fire-116-million-in-costs-18000-structures-threatened-and-hundreds-of-homes-destroyed/