REGION COULD SEE ‘ROARING 2022’ AS ECONOMY RECOVERS
Even as San Diego continues to battle a pandemic that has devastated so many of its businesses, the county can look forward to a gradual recovery later this year and perhaps a return to a boom economy by 2022, an economist predicted during a roundtable discussion on Thursday.
Much of the economy already has begun to recover, with unemployment rates easing considerably, although sectors like leisure and hospitality are still suffering amid the current stay-at-home order, said University of San Diego economist Ryan Ratcliff. Nonetheless, if the current state-ordered restrictions can be adhered to and the rollout of
COVID-19 vaccinations expands over the next several months, the county can look forward to better economic times, he predicts.
“A lot of the sectors that were forced to shed jobs in the early surge have figured out how to deploy their workforce remotely and how to come up with new innovative business models that deal with the socially distant requirements, so I think what we’re going to see here is a little bit of a slowdown but maybe not as severe as what you might expect given the amount of new (COVID) cases,” said Ratcliff, an associate professor of economics at the USD School of Business and keynote speaker for USD’s 37th annual economic roundtable.
“If we can look past the immediate dark clouds and get into the second half of 2021 and early 2022, we may actually see something similar to what we saw at the end of the Spanish flu pandemic and maybe we are in for the roaring 2022s.”
Ratcliff, though, was quick to remind his virtual audience that the impacts of the pandemic are a “tale of two economies” that have fallen disproportionately on the poor and communities of color. He pointed to Census Bureau statistics showing that since March, 67 percent of Hispanic households in California and 71 percent of Blacks have seen a loss of employment income compared with 49 percent of Whites.
“In the spirit of the tale of two economies, the recession looks a lot different if you’re a worker with an advanced degree in one of those professional and technical services categories where you are getting your full paycheck every month vs. if you are in one of these lower-income brackets or one of these communities of color,” Ratcliff said. “(For them), the recession has been substantially worse and that’s something we never want to lose sight of.”
As an example of the gradual improvement he’s seeing in the economy, even in hardhit sectors like restaurants and lodging, Ratcliff pointed out that of the 92,400 leisure and hospitality jobs lost between January and April of last year, 52,500 of those jobs have since returned.
That’s likely of little consolation to many of the county’s restaurant owners whose venues are currently shut down for in-person dining. On Thursday, the popular Puesto restaurant group announced that it will be temporarily closing all of its locations for takeout across California until state and county guidelines for dining are relaxed. As part of the temporary shuttering, which many other San Diego County restaurateurs have also decided to do, Puesto reduced its staff to 20 after having to furlough more than 300 workers.
Offering a less rosy outlook at the roundtable was Kerri Verbeke Kapich, chief operating officer of the San Diego Tourism Authority, who pointed to the tourism sector’s enormous job losses.
“It is a real challenge when you have this situation of stop-start for leisure and hospitality businesses,” she said. “And many small-business owners are trying to figure out how to be sustainable in this kind of environment when they don’t understand the rules and the rules keep changing on them. We are the third-largest industry for San Diego. We’ve worked collectively to submit to the state reopening guidelines and unfortunately, the state has not responded back as to what those reopening guidelines will be. Please, let people know what to plan for. We need a plan to reopen.”
As to the issue of equity in the workplace once San Diego emerges from the current recession, the life sciences industry will have to do more to help raise awareness and increase diversity, acknowledged panelist Karmin Noar, executive director of the Biocom Institute. In recent months, she said, there has been more of a focus by the industry on broadening representation in the life sciences industry, specifically for Black, Latinx and indigenous people.
“We are at a point now in our industry where it’s important to acknowledge that we have work to do,” Noar added, “but we are also having the difficult conversations and understanding that one-off training is just not going to do it.”
Well aware that there are challenging times ahead in addressing parity in the workplace and rebuilding San Diego’s economy, Ratcliff explained why he hews to an optimistic outlook.
“When you had the travel industry shuttered, it doesn’t start back up immediately,” Ratcliff acknowledged in an interview. “But for that part of the economy where people are still getting a consistent paycheck, there’s a lot of accumulated savings and an appetite to enjoy what they used to do — getting a haircut, going on a cruise, traveling to New York. I do foresee that when COVID feels the same as the seasonal flu, I think we’ll see quite a boom with all this pent-up demand, and by 2022 I’d expect to see a real boom economy.”