Jobs on a feeble recovery path
Experts say impact of stringent shutdown has limited virus but has constrained economy
Once a leading economic powerhouse, the Bay Area now is one of the nation’s weakest regions in recovering the jobs lost when coronavirus-linked business shutdowns began.
The East Bay, the San Francisco-san Mateo region and Santa Clara County are performing so poorly in recovering from the epic employment losses of March and April that each of these local regions, along with the overall Bay Area, is in the bottom 10 of a ranking of 30 large metro areas in the United States, this news organization’s analysis of U.S. Labor Department data shows.
Experts say the lag is not the fault of any underlying economic weakness but rather the impact of the Bay Area’s stringent COVID-19 shutdown. Restrictions on business activity have helped control the coronavirus in an area that saw one of the nation’s first outbreaks, leading to comparatively low rates of infections and deaths. But they have also constrained a normally vigorous economy.
“The Bay Area has been the nation’s most rigorous in implementing the distancing and sheltering guidelines,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank that tracks local economic trends. “This is one of the main reasons why we lost so many non-tech jobs and why they are slow to recover.”
Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the
California Economy, agreed: “The Bay Area has recovered a smaller share of lost jobs than most metro areas in the nation as a result of the stricter rules on reopening,”
It could take two years for the Bay Area to recover its lost jobs and return to the record heights for its job market that the region enjoyed only last February, judging from projections based on its current pace.
The state is struggling to recover as well.
California, Los Angeles County, San Diego County, Riverside-san Bernardino, Orange County and Sacramento-roseville all badly lag the recovery in the United States overall.
The United States has recovered nearly half of the 22.16 million jobs it lost during March and April, when coronavirus-induced business closures erased employment nationwide at historic numbers.
In contrast, the Bay Area has regained less than onethird of the 619,700 jobs it lost during those brutal months. The Bay Area isn’t even doing as well as California, which has recaptured just over one-third of the 2.63 million jobs it lost in March and April.
In some ways, the Bay Area is a victim of its own success. The area is home to high-performing, progressive technology companies that instituted work-from-home policies even before government orders came down.
“The areas that are recovering the slowest are very high-income areas with high concentrations of employment where people can work remotely,” said Jeffrey Michael, director of the Stockton-based Center for Business and Policy Research at the University of the Pacific. “These areas have households that have cut back sharply on their consumption of dining out and personal services.”
Of the Bay Area’s metro centers, Santa Clara County fares the best, recovering one-third of its 150,700 lost jobs. The San Francisco-san Mateo region has regained 30.3% of its 194,500 lost jobs.
The worst metro area among the 30 largest in the nation? The East Bay, which has regained less than onequarter of the 183,700 payroll positions it lost.
Adding to the angst for the Bay Area: High-profile economic and employment rivals Austin, Dallas, San Antonio and Houston in Texas, along with Seattle, Phoenix, Denver and Charlotte, as well as Rust Belt stalwarts Detroit and Pittsburgh, are all recovering their lost jobs far better than the Bay Area.
Just about the only consolation prize for the Bay Area’s performance so far: The nine-county region is faring better than high-profile areas such as New York City and tourist-dependent Orlando, Florida, and Southern California’s Orange County, where theme parks have been hobbled by the virus.
The forbidding economic landscape in the Bay Area leads to a question: How long might it take for this region to recover the jobs it shed during March and April?
During May, June, July and August, the Bay Area added 186,400 jobs — an average of 46,600 a month. If the Bay Area generates jobs at that pace, it would take another nine months to regain the remaining 433,000 lost when the virus hit.
The problem is that the Bay Area recovery is showing clear signs of losing steam.