Hit hard by COVID-19, San Diego’s economy might not be as bad off as other spots – The San Diego Union-Tribune

The economy might seem bad out there but San Diego may not have gotten the worst of Californias massive job losses.

Roughly 67 percent of workers in San Diego County are considered essential and less likely to have suffered furloughs, shows a deep dive of unemployment data by Beacon Economics. Thats a higher percentage of the workforce than Silicon Valley, Los Angeles and San Francisco.

Beacon Economics reasons areas hit hardest will have a more difficult time recovering because consumer fears are likely to make face-to-face jobs a liability even with a fully open marketplace. So, if a job could be done from home during the quarantine, it is still more valuable than a position that cant when everything is open.

Some of the industries and workers hit hardest during the closures are also at greatest risk during the recovery stage, said Beacon Economics research manager Taner Osman.

What areas might bounce back quickest may be valuable for a variety of reasons: What home market will be best, where a California business might want to concentrate first and where statewide resources might be needed most.

San Diego might be better off overall than some regions, but the same cant be said for all industries. Our leisure and hospitality industry was the hardest hit in California losing 105,300 jobs annually as of April. Conventional wisdom has largely pointed to this as a reason why San Diego could suffer more than other regions.

However, Beacon Economics pointed out many San Diego industries fared better during the first two months of the crisis and that balances out extreme tourism job losses, a roughly 52 percent drop in employment. In other words, leisure and hospitality took the brunt of losses. On an annual basis, financial activities were down just 1.4 percent, and include jobs in insurance, investments, real estate and securities.

Other industries with a lot of essential workers also had comparably few jobs lost. Some examples: Information (publishing, broadcasting) was down 3.7 percent, or 900 jobs; and manufacturing (computer and electronic manufacturing, boat building) was down 2.2 percent, or 2,500 jobs.

Compared to San Diego Countys roughly 67 percent of workforce that was qualified as essential, only East San Francisco Bay was close with 65 percent. Silicon Valley had about 62 percent essential workers, San Francisco had 57 percent and Los Angeles County had 60 percent.

It might be hard to imagine a strong San Diego economy at the moment. Unemployment hit its highest ever recorded for San Diego in April, 15 percent, with records going back to 1990, said state labor officials. The San Diego Association of Governments predicts the number to be closer to 30 percent. New statewide data is expected Friday.

Beacon Economics added another wrinkle to its analysis called a vulnerability index that tracks the percentage of jobs that require face-to-face contact and will likely be more of a factor when essential and nonessential labels wont matter. The idea is that jobs that require a lot of human interaction even if they were considered essential during the quarantine will be more vulnerable in the new economy.

An example of this would be air travel, which is considered essential, but will likely not be the safest job in the nation when everything is reopened and COVID-19 is still out there.

Beacon said about 54 percent of San Diego Countys 1.3 million essential workers were high risk on its vulnerability index. That compares to 56 percent in Los Angeles County. However, Beacon said only 34 percent of San Diego Countys 700,000 nonessential workers are on the vulnerability index the same as Los Angeles County.

Osman said that San Diego is less unique when it comes to the vulnerability index because, across the board, Californias essential workers are more likely to have face-to-face interactions than those considered nonessential. One of San Diegos biggest examples of this is construction, which was allowed during the quarantine but also requires a lot of human interaction.

A lot of the indexs analysis is based on consumer behavior in the coming months. A bright spot for businesses was the news Tuesday that retail sales were up a seasonally adjusted 17 percent in May from a month earlier. The U.S. Commerce Department data showed retail sales are still below pre-COVID levels, but Mays data was seen by many economists that shoppers are eager to get back to spending.

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Hit hard by COVID-19, San Diego's economy might not be as bad off as other spots - The San Diego Union-Tribune