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Tuesday, April 21, 2020

Projected coronavirus-related unemployment could reach 28 percent, analysts say

Posted By on Tue, Apr 21, 2020 at 7:44 PM

Unemployment rates in Santa Barbara County are already seeing an impact from COVID-19, with Santa Maria’s March rate topping the county at 10.7 percent. But according to data analysts, that number could nearly triple by the height of the crisis.

“Our forecasted peak, 28 percent, that’s around 60,600 unemployed workers in Santa Maria,” Hillary Adler, director of content marketing at MoneyGeek, told the Sun. “That’s a huge number.”

MoneyGeek, a personal finance technology company based out of San Francisco, is leading an economic analysis to predict and understand the potential effect of COVID-19 on the economy, particularly when the virus hits its peak. Their forecasting project started on a national level, before moving into state and city based projections.

“Our forecast uses an aggregation of national unemployment forecasts from prominent economists, and then we project local area unemployment based on the sectors and industries that are represented in the area,” Adler explained.

For the greater Santa Maria area, the industries that will see the greatest negative impact from COVID-19 are hospitality first, health care second, and retail trade third, according to MoneyGeek.

Their analyses show that the hospitality industry in the greater Santa Maria area currently has around 28,000 workers, Adler said. These hospitality workers are all part of the most at risk industry.

Workforce Development Board of Santa Barbara County Executive Director Raymond McDonald told the Sun that the impact of COVID-19 on the entire county’s year-round hospitality industry is already being reflected in unemployment rates from March, not just in Santa Maria but also in parts of the South County.

The second most impacted industry in Santa Maria, MoneyGeek’s analysis shows, will be the health care industry, which currently employs around 25,000 local workers. While this may seem surprising given that the health care system appears to be more engaged than ever, the reality is that the sector covers more than hospitals.

“It’s local doctor’s offices, including dentists, pediatricians, and ophthalmologists. In addition, health care includes home health aides,” Adler said. “Many of these jobs have been lost or furloughed as offices close. Elective procedures have generally halted, which is a big portion of revenue for hospitals and outpatient clinics.”

The retail trade industry is projected as the third most impacted in greater Santa Maria, with a current workforce size of 18,000, according to MoneyGeek’s aggregate analysis.

But the retail sector includes grocery stores, one of the few exceptions to COVID-19’s negative impact as these stores remain open and selling essential goods. For this reason, the retail industry’s hit could be felt even harder than the numbers suggest. Adler wrote in a follow up email to the Sun that “the magnitude of the retail industry job losses is skewed or distorted by the fact that grocery stores are alive and well.”

McDonald of the local Workforce Development Board made a similar analysis, stating that “The other retailers like Macy’s and all the other big shopping centers are closing down, at least temporarily. So that’s overshadowing what’s happening at the grocery stores.”

While a potential 28 percent unemployment rate is certainly hard to comprehend, Santa Maria isn’t alone. MoneyGeek projects that the country as a whole will trail closely behind with a 25 to 27 percent national unemployment rate at the height of the curve.

“It’s totally unprecedented,” Adler said. “This is just off the charts.” ∆
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