ARTICLE
We are learning a valuable lesson as we tackle the waves of the coronavirus and try to get the economy back on track. At this moment, we are losing both battles. If you are not troubled by the rising infections rates, you are part of the problem. We need to be in this together — ALL IN TOGETHER. On Monday, July 13, Governor Gavin Newsom issued an order to pull back on reopening for indoor operations of shopping malls, fitness centers, offices for non-critical sectors, nail and hair salons — and places of worship. Newsom acted as he saw rapidly increasing coronavirus cases, hospitalizations, and deaths following a broad economic reopening over the past several weeks. The new order puts a hold on the recovering economy. Santa Cruz County is not immune for the next wave of infections and some of our businesses will not be immediately be impacted by the Governor’s latest announcement. Look, one reason the state’s economy (and our local economy) can’t regain its former strength is the level of public reluctance to wear masks and practice social distancing. These practices are good medicine as well as good for business, too. As I listen, watch, read and analyze the situation worldwide and throughout California, I like to turn to my business colleagues and trusting friends to hear their sage advice. My dear friend from southern California who runs the Orange County Business Council makes a starting point for this article. “The virus isn’t going away, and it isn’t political,” said Lucy Dunn, CEO of the Orange County Business Council. “To safely reopen businesses, we must look to those countries who faced the pandemic before us. They universally embraced face masks and distancing. And they are now starting to open up. We are not even through the first wave of this disease yet. Mask up and keep it up to slow the infection rate.” Santa Cruz County, so far, is very fortunate that our infection numbers, while increasing, are not as dramatic as other surrounding counties. But just because we are bending the curve ever so slightly, we are nowhere near being out of the woods. What are the coronavirus numbers telling us? How do they relate to economic indicators? And fundamentally, what are the short and long term strategies to beat the virus and rebound the economy. Let’s begin with the County COVID-19 data: > 602 total known cases > 286 active cases > 313 known recovered cases > 3 deaths > 53 required hospitalization > 22,443 negative lab tested You can see the County Dash board here: https://www.santacruzhealth.org/HSAHome/HSADivisions/PublicHealth/CommunicableDiseaseControl/CoronavirusHome.aspx Here are a couple economist’s projections: Despite the tremendous economic costs of COVID-19 related closures, Beacon Economics‘ latest forecast for the U.S. and California continues to call for a strong, rapid recovery during the last half of 2020 – both for employment and output. “The folks out there calling for a long, protracted U-shaped recovery, believe the damage from the closures has been so profound that the economy won’t be able to grow even after mandates are lifted,” said Chris Thornberg, Founding Partner of Beacon Economics and Director of the UCR Center for Forecasting. “It’s true the May data represent only a small uptick, but there was a bounce in employment while the economy was still closed.” Thornberg acknowledges that until the June and July numbers are available — the ones that will reflect what has happened after the reopening of economic activity — the pace back to normality will not be truly understood. The California Forecast Report run by Mark Schniepp has a different take on the COVID - 19 impact on the economy. “The lack of significant improvement in the nation’s unemployment totals likely reflects the pausing or reversal of re-opening plans in some states and California counties. This is in response to rising daily COVID-19 cases. And the increase is due principally to the resumption of businesses opening during the last half of May and early June throughout the nation. The protests around the nation from late May and through much of the month of June are also said to be responsible for the current uptick in cases,” stated Mr. Schniepp. Unemployment insurance claims fell in the most recent report (for the week ending July 4) in both the U.S. and California, but the reductions were slight. The current infection outbreaks are leading to more business in counties and states shutting down indefinitely. These closures will impact regional economies, who will struggle, and small businesses will close, leading to a resurgence in layoffs. Mr. Schniepp estimates “Right now, the unemployment rate in California at 15.7 percent. For the nation, our unemployment insurance claims model predicts at rate of 13.4 percent for the week ending July 4th.” There are now 21 percent fewer small businesses open in California than there were in January of this year. We don’t have an exact accounting of the Santa Cruz County businesses that are closed and who may or may not re-open, so the trajectory of the financial losses is still a working model that requires additional economic analysis. Our chamber member, Santa Cruz Local https://santacruzlocal.org continues to follow news-worthy issues that impact Santa Cruz County. Their recent edition highlighted the financial insurgence of much needed funds through the SBA’s Paycheck Protection Program (PPP). The PPP program has been a lifesaver to Santa Cruz County businesses and non-profits who are eligible for these federal loans. According to the data research by Santa Cruz Local, the Paycheck Protection Program sent more than 665 loans from $350,000 to $5 million to Santa Cruz County businesses and organizations. The U.S. Treasury Department recently released nationwide loan data that Santa Cruz Local compiled this week. The program started in April to help businesses retain employees as the coronavirus response temporarily shut workplaces. Because loan ranges were released rather than amounts, Santa Cruz County organizations may have received up to $565.8 million, according to the data. You can read more about Santa Cruz Local report here: https://santacruzlocal.org/2020/07/14/feds-loan-millions-to-santa-cruz-county-businesses/ The tale of two pandemics are merging into one — can we stem the tidal wave of the health pandemic as well as wade through the turbulent economic waters? There have been glimmers of hope that we are on a recovery pathway until the recent surge in cases. Let’s see where the new order takes us and how responsive individual citizens, businesses, employees and customers are to put health and well-being first. An ALL-IN TOGETHER proposition for our county, our state, and the nation. Like my dear friend Lucy Dunn stated, MASK UP! Our future depends on it.
We are learning a valuable lesson as we tackle the waves of the coronavirus and try to get the economy back on track. At this moment, we are losing both battles. If you are not troubled by the rising infections rates, you are part of the problem. We need to be in this together — ALL IN TOGETHER.
On Monday, July 13, Governor Gavin Newsom issued an order to pull back on reopening for indoor operations of shopping malls, fitness centers, offices for non-critical sectors, nail and hair salons — and places of worship. Newsom acted as he saw rapidly increasing coronavirus cases, hospitalizations, and deaths following a broad economic reopening over the past several weeks. The new order puts a hold on the recovering economy. Santa Cruz County is not immune for the next wave of infections and some of our businesses will not be immediately be impacted by the Governor’s latest announcement.
Look, one reason the state’s economy (and our local economy) can’t regain its former strength is the level of public reluctance to wear masks and practice social distancing. These practices are good medicine as well as good for business, too.
As I listen, watch, read and analyze the situation worldwide and throughout California, I like to turn to my business colleagues and trusting friends to hear their sage advice. My dear friend from southern California who runs the Orange County Business Council makes a starting point for this article.
“The virus isn’t going away, and it isn’t political,” said Lucy Dunn, CEO of the Orange County Business Council. “To safely reopen businesses, we must look to those countries who faced the pandemic before us. They universally embraced face masks and distancing. And they are now starting to open up. We are not even through the first wave of this disease yet. Mask up and keep it up to slow the infection rate.”
Santa Cruz County, so far, is very fortunate that our infection numbers, while increasing, are not as dramatic as other surrounding counties. But just because we are bending the curve ever so slightly, we are nowhere near being out of the woods.
What are the coronavirus numbers telling us? How do they relate to economic indicators? And fundamentally, what are the short and long term strategies to beat the virus and rebound the economy.
Let’s begin with the County COVID-19 data: > 602 total known cases > 286 active cases > 313 known recovered cases > 3 deaths > 53 required hospitalization > 22,443 negative lab tested
You can see the County Dash board here: https://www.santacruzhealth.org/HSAHome/HSADivisions/PublicHealth/CommunicableDiseaseControl/CoronavirusHome.aspx
Here are a couple economist’s projections:
Despite the tremendous economic costs of COVID-19 related closures, Beacon Economics‘ latest forecast for the U.S. and California continues to call for a strong, rapid recovery during the last half of 2020 – both for employment and output. “The folks out there calling for a long, protracted U-shaped recovery, believe the damage from the closures has been so profound that the economy won’t be able to grow even after mandates are lifted,” said Chris Thornberg, Founding Partner of Beacon Economics and Director of the UCR Center for Forecasting. “It’s true the May data represent only a small uptick, but there was a bounce in employment while the economy was still closed.” Thornberg acknowledges that until the June and July numbers are available — the ones that will reflect what has happened after the reopening of economic activity — the pace back to normality will not be truly understood.
The California Forecast Report run by Mark Schniepp has a different take on the COVID - 19 impact on the economy. “The lack of significant improvement in the nation’s unemployment totals likely reflects the pausing or reversal of re-opening plans in some states and California counties. This is in response to rising daily COVID-19 cases. And the increase is due principally to the resumption of businesses opening during the last half of May and early June throughout the nation. The protests around the nation from late May and through much of the month of June are also said to be responsible for the current uptick in cases,” stated Mr. Schniepp.
Unemployment insurance claims fell in the most recent report (for the week ending July 4) in both the U.S. and California, but the reductions were slight. The current infection outbreaks are leading to more business in counties and states shutting down indefinitely. These closures will impact regional economies, who will struggle, and small businesses will close, leading to a resurgence in layoffs. Mr. Schniepp estimates “Right now, the unemployment rate in California at 15.7 percent. For the nation, our unemployment insurance claims model predicts at rate of 13.4 percent for the week ending July 4th.”
There are now 21 percent fewer small businesses open in California than there were in January of this year. We don’t have an exact accounting of the Santa Cruz County businesses that are closed and who may or may not re-open, so the trajectory of the financial losses is still a working model that requires additional economic analysis.
Our chamber member, Santa Cruz Local https://santacruzlocal.org continues to follow news-worthy issues that impact Santa Cruz County. Their recent edition highlighted the financial insurgence of much needed funds through the SBA’s Paycheck Protection Program (PPP). The PPP program has been a lifesaver to Santa Cruz County businesses and non-profits who are eligible for these federal loans. According to the data research by Santa Cruz Local, the Paycheck Protection Program sent more than 665 loans from $350,000 to $5 million to Santa Cruz County businesses and organizations. The U.S. Treasury Department recently released nationwide loan data that Santa Cruz Local compiled this week. The program started in April to help businesses retain employees as the coronavirus response temporarily shut workplaces. Because loan ranges were released rather than amounts, Santa Cruz County organizations may have received up to $565.8 million, according to the data.
You can read more about Santa Cruz Local report here: https://santacruzlocal.org/2020/07/14/feds-loan-millions-to-santa-cruz-county-businesses/
The tale of two pandemics are merging into one — can we stem the tidal wave of the health pandemic as well as wade through the turbulent economic waters? There have been glimmers of hope that we are on a recovery pathway until the recent surge in cases. Let’s see where the new order takes us and how responsive individual citizens, businesses, employees and customers are to put health and well-being first. An ALL-IN TOGETHER proposition for our county, our state, and the nation. Like my dear friend Lucy Dunn stated, MASK UP! Our future depends on it.