Job Losses Stagger San Diego's Economy
Shelter-in-place orders and other restrictions have combined to grind San Diego County's economy to a near standstill.
Some economists say the state’s unemployment rate, a record low 3.5% in February, could climb to 13% in May.
Nearly 40 San Diego hotels have shut down including the iconic Hotel del Coronado. Restaurants, tourism companies, and many retail outlets are closed with the shutdowns happening quickly.
The longer the economy remains idle, the more help the economy will need to regain strength.
“The difference here is that the economy is fundamentally healthy, but these measures we’re taking have created a short term spike in unemployment,” said Daniel Enemark, an economist with the San Diego Workforce Partnership.
The big uncertainty remains how long social distancing policies will be needed to protect public health.
Even small local efforts to pay workers during the shutdown may help the economy bounce back.
Ultimately, how long the work stoppage lasts will determine how long the economic impact will be felt. Enemark said it is sort of like locking your keys in the car.
“The engine is working fine, but you can’t get it to run because the keys are locked in there,” Enemark said. “As soon as AAA comes and bails you out, you could start the car again and everything is fine. The problem is if you left your lights on and now the battery is drained then when you get back in the car you can’t start it.”
A long shutdown because of COVID-19 could lead to a prolonged economic dip.
How long businesses remain shuttered depends largely when the spread of the virus can be stopped or slowed to manageable levels.