Monday, April 19, 2021

All Is Not Equal In California’s Regional Economic Recovery


Pace of Job Recovery Varies Significantly Among State’s Major Metros; Stark Differences Revealed Between Households With Children

California’s major metros have fared quite differently in their climb back from job and other economic losses suffered during the COVID-19 pandemic. According to a new analysis released today by Beacon Economics, when it comes to recapturing lost jobs, some regions such as the South Bay (San Jose/Silicon Valley), have watched their largest industries return to near pre-pandemic employment levels while others, such as Los Angeles, are trailing even the national average.

“These variances are being heavily driven by the different industry and population composition among the state’s diverse metro areas,” said Taner Osman, Research Manager at Beacon Economics. “Think about the industry sectors that dominate a region like Los Angeles – entertainment, leisure and hospitality, healthcare, retail – these are some of the hardest hit by the pandemic’s health-mandated closures and offer little possibility to work remotely; as such, they simply can’t show the same resilience seen, for example, in professional, scientific, and technical services.”

Among the five major metros examined, employment has recovered most robustly in the South Bay where the unemployment rate has fallen to 8.4%, followed by San Francisco (9%), the East Bay/Oakland (10.4%), San Diego (10.8%), and finally Los Angeles (17.5%). California’s unemployment rate as a whole stands at 14%.

And despite the relatively vigorous job recovery in the state overall, the analysis points out that the economies in all California’s major metros will remain significantly behind their 2019 trend. “Throughout this crisis, as we’ve worked to climb back to pre-pandemic levels, we’ve essentially been losing out on all the job growth that should have been happening if it were a normal period,” said Osman. “The result is that the state’s major metros will remain behind their previous growth trend into 2022.”

The new analysis also dives into the extraordinary strains being faced by households with children in different regions of the state, especially as the school year begins under an unprecedented and almost experimental system of distance learning. Some regions such as San Francisco and the South Bay, in addition to having higher household incomes, have more ‘heads of households’ who work in industries like professional services where workers are less exposed to COVID-19 due to the ability to work from home or without much in-person contact. Parents in Los Angeles, on the other hand, are more likely to work in the manufacturing, construction, or health care fields, which are not generally conducive to working from home and in the case of health care can create particularly high exposure to the virus.

The most striking differences, however, are between two-parent and single-parent households. Across all regions, not only is the income disparity stark between the two, which affects things like stable internet access, but the likelihood of a single parent working in a more virus-exposed industry is greater. “All parents, especially single parents who are raising and supporting children on their own, are facing challenges like never before as they juggle their jobs with administering their child’s education,” said Osman. “That pressure is made exponentially worse for families without internet access or who have unstable connections.”

This edition of The Regional Outlook was authored by Osman and Research Associates John Macke and Steven Espinoza. Attached are outlooks for the East Bay, Los Angeles, San Diego, San Francisco, and the South Bay.

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Inland Empire Business Journal
The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.