Economic impact of shelterin-place is far reaching.
“STAY AT HOME.” The allcaps banner headline in the March 17 San Francisco Chronicle said it all. Officials were telling nearly 7 million people to shelter in place immediately in a desperate effort to stop the spread of the coronavirus. All nonessential businesses had to close.
Overnight, the Bay Area was transformed. From Union Square to the Googleplex, from Sather Hall to Santana Row, places that ordinarily bustled with activity became virtual ghost towns.
Schools and child care centers shut down. Tens of thousands of stores, restaurants, cafes, salons, gyms, doctors’ and dentists’ offices, and more closed their doors.
As the region shuddered to a halt, the economic impacts were felt immediately.
For hundreds of thousands of workers in service industries, travel and tourism, retail, personal services and more, there was no work — and no income. Meanwhile, many whitecollar employees continued their work lives in front of screens at home, in between supervising their children. That dichotomy exacerbated the region’s growing income inequality, starkly underscoring differences between haves and havenots.
Layoffs and furloughs skyrocketed. Even people who kept their jobs often had hours and wages reduced. By midMay, more than 1 out of every 8 workers in the nine counties were unemployed. Some had gotten their jobs back — at least temporarily — thanks to a federal initiative, the Paycheck Protection Program, which provided forgivable loans to businesses to keep or rehire workers.
Many laidoff workers, already living paycheck to paycheck, struggled to keep food on the table. Food banks around the region scrambled to set up new drivethrough distribution centers, which drew hundreds of families.
The California Employment Development Department, which handles unemployment benefits, was overwhelmed. Laidoff workers spent hours trying to get through to its logjammed call centers and website. Federal money allowed the agency to add thousands more workers; it’s still hiring and training them.
Rents and home prices fell from stratospheric heights. But with the cuts in paychecks, the region’s housing affordability crisis saw no real improvement.
Both local and state authorities temporarily froze foreclosures and evictions, but rents would still come due eventually. That reality may have spurred the startling 7.5% of San Francisco renters who have broken their leases since stayathome started.
Data underscore that people truly did stay at home. Ridership on BART, buses and trains plummeted, as did car traffic and ridehailing. Lanes were eerily empty on the Golden Gate Bridge and Bay Bridge.
“Quite simply, most people in the nine Bay Area counties stopped leaving their home during (shelter in place), reducing total street activity by as much as 90% by early April,” said Laura Schewel, CEO of StreetLight Data, a San Francisco transportation analytics company. “Bay Area residents also sheltered in place to a greater degree than virtually anywhere in the nation, except Seattle and New York.”
There was a silver lining. Pollution fell, with far fewer emissions from cars, planes and industry. A Stanford study said the Earth will see a 7% decrease in carbon dioxide emissions this year.
But what happens now with global warming is an open question.
The positive trend could be maintained, “if we continue to reduce car commutes and increase walking and biking,” she said. However, it could also be far worse in terms of carbon and congestion if we start driving instead of utilizing transit or other shared options.”
Small businesses, the lifeblood of Main Street, saw years of hard work wiped out.
“The hardesthit industries and businesses tend to be low margin,” said Daniel Sternberg, head of data science at Gusto, a San Francisco company that helps small businesses handle payrolls, benefits and human resources. Such firms “are really fragile.” Many are run by sole proprietors who have little in the way of a safety net.
It’s too soon to say how many shuttered businesses will never reopen, but the prospects for many are daunting. Among retailers, the shutdown accelerated the trend toward online shopping. While Amazon.com saw Bay Area sales soar 86% since Dec. 31, major brickandmortar chains like J. Crew, Neiman Marcus and JCPenney filed for Chapter 11. Reorganization through bankruptcy, though, may not work for small boutiques.