ECONOMY
Report points to economic rebound in coming months
By ANGELINA MARTIN
Masks critical to region’s recovery, according to economist
H
ow quickly the region’s have one thing in common: the wide- definitely see a lower employment this economy recovers from spread wearing of masks. In a new year than the year before because the the coronavirus pandemic study by the University of California, economy has been slowing for quite depends entirely on how well the San Diego, trends show that mandated some time,” Soydemir said. community follows public health mask coverings in Italy and New York The combination of the virus and guidelines, according to one local City between April 6 and May 9 sig- the downturn already taking place expert. nificantly reduced the number of caused the predicted magnitude of the The San Joaquin Valley Business infections compared to social distanc- recession to be significantly exceeded. Forecast report was released by Stan- ing and shelter-in-place measures. The national unemployment rate is islaus State last month, detailing the Soydemir said the best way to see expected to grow between 15 and 30 extreme economic hardship occur- the local economy prosper once more percent in the second quarter, and the ring in Central California due to the is by contributing to its recovery safely, Valley’s unemployment rate is genCOVID-19 outbreak. The pandemic is especially as the Valley sees a recent erally double that of the rest of the referred to as a “Black Swan” in finance increase in cases. nation. In addition, the region’s recovliterature because of its extremely “You want to be part of the solution, ery is expected to be a bit slower than rare and devastating nature, the nationwide rebound due to according to the report’s lead the less-developed structure of author, Foster Farms Endowed its labor markets. Professor of Business EconomCategories of employment ics Gökçe Soydemir. in the Valley that have been hit As businesses throughout the hardest by the pandemic the Valley begin to reopen include leisure, hospitality and following a three-month retail services, while education shutdown mandate from the and health services have been state, an economic recovery impacted the least. In addition, is expected during the secthe Valley’s ag-centric sectors ond half of 2020 — as long as are impacted less than other a spike in coronavirus cases categories of employment. doesn’t cause them to close Projections point to a recovFoster Farms Endowed Professor of Business Economics once more. ery with an annualized growth Gökçe Soydemir said the best way to see the local “We’re just seeing places economy prosper once more is by contributing to its of 1.05 percent in total employsafely, especially as the Valley sees a recent beginning to reopen, which we recovery ment from the second half of increase in cases. indicated in the report would 2020 to the first half of 2021, happen in May or June. From falling behind the Valley’s typithat standpoint, we’re on track and not the problem,” he said, adding that cal growth of 1.19 percent. However, seeing an increase in economic activ- stores in some states are closing for the projections also anticipate that from ity. It’s only partial, but it’s going in the second time as cases surge. “We have the second half of 2021 to the second right direction,” Soydemir said. “The to be responsible in order to get rid of half of 2022, total employment will worry I have is that when I go out, I this virus in a quicker manner.” exceed typical growth at an average see a lot of people not wearing masks Soydemir’s report indicates that any rate of 1.26 percent. and I think that’s a big problem.” delay or restart in the reopening of the Despite having anticipated a quick, The Valley has been slow to adhere economy will alter the timing of its “V-shaped” recovery curve in March, to mask recommendations compared recovery. Prior to the pandemic, the Soydemir said he now anticipates the to other regions, Soydemir added, fall 2019 Business Forecast had already Valley economy’s rebound to resemble like the Bay Area. On Thursday, Gov. predicted a decline in local economic a slower, “U-shaped” curve if the pubGavin Newsom mandated that all activity for the first time in the report’s lic continues to reject mask mandates. Californians are required to wear face nine-year history. Had the pandemic “That's what’s critical. If everyone masks in public — one day after the not occurred, Soydemir said, the does what they’re supposed to do as state registered a record spike in coro- Valley would still be experiencing individuals, I think this recovery is navirus cases. significant employment loss this year going to take place at a faster pace,” he Soydemir said countries that have compared to previous years. said. “I keep saying this over and over slowed the curve of coronavirus cases “The unemployment numbers again: we have to be smart about this. and thus seen their economies begin to wouldn’t be as large because it’s The economy depends on us and how recover, like South Korea and Japan, all exceptional right now, but we would we respond to the virus.”
BUSINESS NEWS
9
SUMMER 2020
