The Personal Economic Impact Of COVID-19 On San Diegans

Speaker 1: 00:00 Protests over the government's new stimulus package got personal over the holiday weekend. The homes of house speaker, Nancy Pelosi and Senate leader, Mitch McConnell were both the targets of vandalism with graffiti demanding more money in the package last week, a bill, which would have raised stimulus checks from 600 to $2,000 for millions of Americans passed in the house, but was blocked in the Senate by McConnell. The truth is the COVID-19 economic hit has already been personal for thousands of San Diego for months now, as we begin a new year with new vaccines, we'll check in on the damage done and the possibilities for recovery in 2021. Joining me is Ray major chief economist for the San Diego association of governments or SANDAG Ray. Welcome. Speaker 2: 00:48 Thank you very much, Maureen. Now, first Speaker 1: 00:50 Of all, what do you think about the new stimulus package passed by Congress? Will it be enough to help people in businesses here in San Diego Speaker 2: 00:57 Right now every little bit is going to help because there really is no end in sight, uh, for this, uh, the COVID lockdowns. And so, uh, we, we need to get money to businesses and we need to get money to individuals. So, um, you know, people are not, uh, earning as much as they were last year. And I think these types of stimulus packages right now are absolutely Speaker 1: 01:21 Back in October SANDAG, put out a paper on the economic impact of COVID-19 so far in San Diego. Can you remind us some of the top findings of that report? Speaker 2: 01:33 Sure. What we found in that report is that there were specific industries that were hit extremely hard here in San Diego. The tourism industry, the retail industry and education were the three hardest hit sectors with almost 180,000 jobs being lost in those three sectors. But we also found is that the, uh, the recession that, that came after this, the COVID pandemic didn't hit everybody evenly. Uh, people of color Hispanic and black populations were hit much harder than the white and Asian populations in our area. Young people were hit harder than, uh, middle aged people and women were also hit harder than men in this particular, uh, economic crisis. Speaker 1: 02:22 And it really has impacted the overall regional economic product for San Diego County. Hasn't it? Speaker 2: 02:28 Well, it has the, the, the GDP here in the area has suffered, uh, about 10 to 12% of our economy is reliant on tourism. And so that would be all of the people coming here to the region, uh, you know, for, for vacation purposes and also for business travel, uh, they would, they would spend somewhere on the order of $10 billion per year, that would be added to our economy on things like hotel rooms and local restaurants and going to activities like the zoo and SeaWorld. And that has almost all, but dried up. There is some activity in terms of, uh, people coming to stay here for vacations, maybe coming down from the Los Angeles area. But for instance, business travel is, has almost completely dried up. Speaker 1: 03:14 How's the economic picture improved at all. Since that report was made in October, Speaker 2: 03:19 You know, we've, we've gone deeper into the lockdowns. We had a pretty good fourth quarter in terms of retail sales. It seems that people are changing their spending habits and they're spending more money online and, uh, purchasing goods and not purchasing as much in terms of services. So things like, uh, getting massages or haircuts or having nails done those types of businesses are suffering very badly. And so what you start to see is this kind of bifurcation, where there are some businesses that are doing okay during this pandemic. And then there are lots of other businesses that are suffering and, and are going to continue to suffer. Speaker 1: 04:00 And what are some of the economic sectors that haven't really been touched much at all? Speaker 2: 04:04 We don't see very much impact happening in sectors like, uh, biotech and high-tech, they're actually they're growing the innovation sector in San Diego is a very strong sector and we see that sector doing well. We see the construction industry doing well. We see government, uh, holding on relatively well and we see manufacturing, uh, recovering pretty well. Also. Uh, the, the sectors that I haven't mentioned that are also hit in terms of, um, employment, um, is the education sector and also healthcare. Those are the, the, the two other sectors that have lost some employment. Speaker 1: 04:40 Now you mentioned that there's this disparity between upper income people who can work from home, lower income people who can't is Senta keeping track of those disparities. Speaker 2: 04:52 That's a good question. We've been trying to keep track of that statistic. And we're looking at some national data that has been put out and about 65% of all economic activity is now being produced at home versus a place of work. And we have twice as many people who work from home than in a place of employment, but the people who are working from home are also people who have jobs that can be done remotely. And these people tend to be the higher educated people with higher incomes. And they also tend to be the most financially secure. This group of people is also the people most likely to own a home. And the housing market has been very strong recently. And they're also the ones who typically have stocks in their portfolio of 401k, for instance, and stocks have been doing very well this year. Speaker 2: 05:47 And so the financially secure people seem to be weathering the storm pretty well. And there's the whole COVID crisis is really just kind of an inconvenience for them, but the people are financially insecure, the ones that are living paycheck to paycheck. And what we find is that those are the people of color. It's the Hispanic and black communities here in San Diego. It's the people who are in the lowest wage earners. So those people who are earning $15 an hour or less, it's the young people who would have been relying on jobs, for instance, as a, as a waiter or waitress to have been impacted hard. And this pandemic specifically hit women much harder than it did, uh, men. And so women are suffering more than men in terms of financial insecurity. Speaker 1: 06:39 So how do we come back from this in what kinds of ways could our economic recovery take place? Speaker 2: 06:45 One of the things that we need to do is we need to find a way to allow businesses to safely open. Um, we have not seen the peak of the COVID, uh, uh, infections yet. I mean, we're going to see another peak sometime in mid January, just based upon the fact that people traveled around, around new year's. And so, um, that the health crisis is not over, but we have to find a way to allow businesses to do business. Otherwise they're going to go out of business. You know, right now we have about 43% of the businesses last year were shut down. At some point, we have to make sure that that doesn't continue to occur because those people require their businesses to be open in order to be able to, to generate incomes for their families. But I think we need to find a safe way to reopen businesses. We need to find a way to support local businesses. And, uh, I think getting the vaccine out there as soon as possible is, is something that, that we should all be very, uh, concerned and cognizant of Speaker 1: 07:50 What other aspects of the COVID pandemic is Santa's going to be looking into. Speaker 2: 07:55 So this year we're going to take a look at the impacts of mental health and how that is really going to start to impact the economy. Uh, when we take a look at just what's happened in the last nine or 10 months, I mean, you have people who, old people who haven't been able to see their families or their grandchildren. You have families who have a tremendous amount of stress due to the fact that they're trying to raise their children at home while they're trying to work. And you have kids and teenagers and preteens, for instance, whose lives have been completely turned upside down, and they're not attending school. Uh, the, the online learning, although making an attempt at, uh, educating kids is not as effective as in-person learning. And so what we're going to see is economic impacts of this, uh, in the future. And these economic impacts are going to last far longer than the recession that was caused by the COVID 19 pandemic. We will recover from this as a economy, probably sometime in 20, late 20, 21, maybe early 20, 22, but when it comes to the impact that it had on people that is going to be a much longer lasting impact, and it will affect the economy in the long run. Speaker 1: 09:13 Are you hoping for new federal programs to assist recovery coming out of the new Biden administration? Speaker 2: 09:20 I would hope that there's new programs as long as the government is imposing lockdowns. I think that the government has an obligation to offset that with some type of financial programs. And so I understand why we need to shut down the economy, uh, for the sake of the health crisis. So I think that yes, the government should be doing more to keep those people afloat. There was a tremendous amount of fraud that occurred in the first set of stimulus packages. So I'm hoping that they can, they can stop the fraud, get the money to the people who really needed those people who are impacted, uh, negatively in terms of either losing their jobs or having had their businesses closed. And if we could do that and then just stick together, we could, we could make it through this crisis. Speaker 1: 10:07 I've been speaking with Ray major, he's chief economist for SANDAG, Ray. Thank you very much. You're very welcome. Thank you, Maureen. [inaudible].