Coronavirus keeps many Fresno, Valley businesses closed. How many workers could lose jobs?
An economy that some experts believe was already teetering on the edge of a recession before the novel coronavirus reached California is taking a punch to the gut, as businesses across the state lay off tens of thousands of employees and shutter their doors as a means of slowing the contagion’s transmission from person to person.
Just how many workers? In the week ended March 21, almost 187,000 Californians filed initial claims for unemployment insurance, according to the U.S. Department of Labor. That’s more than a three-fold increase from the prior week, and just begins to show the employment effects of stay-at-home orders issued by state and local health officials calling for non-essential businesses to temporarily close.
Many more laid-off workers could be filing in the coming weeks. A recent Economic Policy Institute study suggests that by June, more than 1.6 million Californians could lose their jobs. That’s a prospect that would rival job losses that materialized over a much longer period during the Great Recession from 2007 to 2009.
A Sacramento Bee analysis of the EPI report indicates that in the central San Joaquin Valley — the five-county region including Fresno, Kings, Madera, Merced and Tulare counties — private-sector job losses could climb to more than 55,000, or 11% to 12% of employment based on pre-coronavirus levels in 2019.
The projections are mathematical; The Bee analysis applies the EPI’s reasoning to each of California’s counties or metropolitan areas to estimate the potential job losses over the next two months. Actual numbers could vary widely, however, because of the mix of industries that varies from county to county and factors such as how many workers are able to do their jobs from home.
County-level data on the actual number of new unemployment claims filed in March won’t be available for several months from the state Employment Development Department.
The EPI report’s co-author, David Cooper, said the Washington, D.C.-based think tank’s projections considered the possible effects of a $1 trillion stimulus plan. But that figure has already been surpassed. Congress reached an agreement Wednesday on a $2 trillion stimulus package — that’s a 2 followed by 12 zeroes —and the U.S. Senate approved the legislation Wednesday night. The House of Representatives is expected to pass the package on Friday.
Cooper said that the extra funding will likely reduce job losses nationwide..
Still, as “non-essential” businesses are urged — and in some cases ordered — to remain closed in California for an yet-undetermined period, some of the hardest-hit industry sectors are expected to be retail and leisure/hospitality — areas that have typically offered some of the lowest rates of pay to workers who often are scraping to make ends meet.
Across Fresno County and its neighboring Valley counties, the leisure/hospitality sector — which includes bars and nightclubs, as well as restaurants that are largely limited to offering take-out service only during the pandemic response, hotels and motels and other visitor- and tourism-oriented businesses — accounts for about 61,000 workers. About 71,000 employees work in retail stores in the region.
Together, the two sectors represent about 28% of employees in Fresno, Kings, Madera, Merced and Tulare counties.
The EPI analysis, based on the expectation for leisure/hospitality and retail to be more affected than other sectors, predicts that of the 50 states, California’s 1.6 million job losses will be the most numerous. Texas follows at about 1.2 million, trailed by Florida at almost 941,000, and New York (now considered the epicenter of the COVID-19 epidemic in the U.S) at 860,000.
