ORANGE COUNTY, Calif. — A new president has sparked hopes of a third stimulus, but what it contains could determine not just the short-term health of the SoCal economy but its future.
Unemployment numbers have skyrocketed, and shifts in how the economy operates have led to concerns that certain lost jobs may never be regained.
“There are certain businesses in a lot of the business sectors that have downsized or closed permanently,” said Lisa Bartlett, the supervisor for Orange County’s 5th District. “Even though the COVID-19 crisis may be resolved in the next six months to a year, these people who were out of work may not have a job to go back to.”
President Joe Biden has floated a $1.9 trillion program that would build on the past two stimulus packages and could double down on COVID-19 spending. Businesses, political leaders, and physicians see the vaccine as the only path toward a complete reopening of the economy. But when business returns to normal, many will still be looking for work. More than 39% of the leisure and hospitality industry nationwide was out of work during the peek of initial shutdowns in April.
“We have such a large number of small businesses that have been disproportionately affected,” said Shannon Sedgwick, director of the Institute of Applied Economics with the Los Angeles County Economic Development Corporation (LAEDC).
Small businesses, by and large, don’t have the kind of on-hand cash to weather lengthy closures, she said, eliminating jobs for many low-wage workers.
When the country will be back to work is unclear, and so is how the economy will respond.
Orange County has struggled along with the rest of the country. The Orange County Employment Development Department reports that unemployment rose a full percentage point to 7.4% from November to December of last year. That’s more than 8,000 jobs. Leisure and hospitality made up a large number of the losses, with some questioning if those sectors can fully rebound.
Suggested solutions vary. Biden has intensified efforts made by former President Donald Trump to encourage federal dollars go to domestic vendors over foreign ones. The new administration is also considering more checks for Americans, possibly $1,400 for certain income brackets. Many Americans already received checks in the spring, and another $600 in December. Sedgwick and the LAEDC have advocated for $400 in enhanced unemployment for as long as shutdowns persist.
Neither option solves the long-term problem, she said. Sedgwick is hoping the next stimulus will include money for retraining programs to inoculate the state against continuing changes in the economy.
How much money it will take and how many people will ultimately need new professions is difficult to forecast. The Center for a Competitive Workforce projects areas of growth in industries like construction and information communication technology.
With California’s broad community college system and its newly created online-only community college, the state can offer programs to a broad number of people in large swaths of the state.
“We know that the structure to create these programs and get these programs out exists,” Sedgwick said.
All it takes now, she said, is a concerted effort by the state and some federal dollars to fuel it.
Orange County’s unemployment problems won’t be completely solved by a vaccine either. Bartlett said the county needs money for retraining, and it needs it now. She said the county had seen spikes in requests for services like food and rental assistance, and the county’s two vaccination “super pod” sites have struggled to find enough personnel to operate them at full capacity. Restaurants and the leisure industry continue to struggle. But once those problems are solved, people will still need jobs.
“Absolutely we need money for retraining,” Bartlett said. “Otherwise we’re going to have people out of work for the long term.”