Why isn’t the job coming back faster? CalMatters
At a CalMatters / Milken Institute event, experts discuss how the pandemic has changed California’s economy, but why there is reason to be hopeful. Here are three key points to remember.
While the coronavirus pandemic shows no signs of ending, California is still recovering from the most damaging recession since the Great Depression. By October, California had regained only about two-thirds of the 2.7 million jobs lost in the first months of the pandemic.
The state is lagging behind the rebound rate in the rest of the United States and is not expected to experience a full recovery until late 2023, according to a recent report from the California Center for Jobs and the Economy.
One of the biggest challenges is getting people back to work, especially as new variants of the coronavirus continue to emerge and create uncertainty.
Hours after health officials confirmed that the first U.S. case of the omicron variant had been detected in San Francisco, CalMatters and the Milken Institute co-hosted a discussion on Wednesday, moderated by CalMatters business reporter Grace Gedye and titled ” The Post- COVID Recovery: California’s Lagging Employment Rate. â
Panelists explained why the mismatch exists: While California has historically had a relatively high unemployment rate, the state has also been hit hardest by the pandemic, in part because its economy relies on the tourism and travel industries. entertainment.
Here are three key points to remember:
COVID changed everything, maybe permanently
The threats of COVID-19 have required many adaptations – to new security protocols, as well as new consumer behaviors. Manuel Pastor, director of the Equity Research Institute at USC, noted some of these structural changes in the economy, including the shift from services to goods as businesses have moved away from traditional in-person services.
Pastor described what he called an âeconomy based more on mutualityâ – an economy in which business owners have an increased sense of the well-being of their employees. And he noted the rise of a “just in case” economy, where business owners are better prepared for supply shortages or workers needing time off.
Perhaps the most lasting change: the shift to remote working, which Pastor says will continue as companies grapple with the fact that many workers do not want to return to the office.
Somjita Mitra, chief economist at the California Department of Finance, said that the pandemic accelerated trends that were already in place, such as decreasing purchases in physical stores and declining manufacturing.
Small business owners have also seen these trends take hold, noted Reign Free, owner of restaurant company The Red Door in Oakland. âPeople don’t throw big events or go out to dinner, so how can we responsibly serve our customers where they are? Said free.
Free also said the pandemic underscored the need for business owners to own their own space, instead of being “at the mercy of your owner.”
There are reasons to be optimistic
While there are many reasons for concern, there are also some points of optimism.
According to Mitra, while the recession was the worst to hit the state since the 1930s – and there is still a long way to go, the economy recovered fairly quickly. She also highlighted indications that residents are optimistic about the economy, including another way to look at the “Great resignation:”
âPeople don’t quit their jobs if they think the economy is going to collapse soon,â she said. âThe fact that people quit and try to find a better job, or start their own business or relocate – people are very optimistic about the recovery. “
The pastor said that while there have certainly been hardships, especially among low-income and vulnerable Californians, the billions of dollars in state and federal aid and other actions have been “remarkable” for. prevent a recession that hit everyone.
Instead, there was more of a micro-recession. In addition to the ability for workers in certain industries to work remotely, rising house prices and the boom in the stock market have meant “the rich people cleaned up,” he said.
Small business owners are still struggling
The pastor called the pandemic recovery a transformative moment for workers – not so much a “big resignation” as a “big wake-up call,” in which people rethink the role of work in their lives. Besides unemployment benefits, there are a number of reasons why people may not return to work, including child care needs or health risks, Free said.
But while large businesses can stay afloat through this transformation, small business owners need more support.
Julian CaÃ±ete, president and CEO of the California Hispanic Chambers Of Commerce, said grants and loans are a bridge for many small businesses, but many have yet to close.
âIt is not just the pandemic that has struck,â he said. “When you get hit by wildfires in parts of the state, it also impacts everything – jobs, recovery, everything else.”
âI just hope,â CaÃ±ete added, âthat lawmakers and policymakers realize that these small investments have been important for small businesses, but it is important for our future economic growth and we must continue with them. ”