The Monterey Bay Economic Partnership (MBEP) held its first virtual Regional Economic Summit on April 29. Speakers included Chris Thornberg, founder of Beacon Economics, and Vince Barabba, former director of the U.S. Census Bureau.
The summit covered a wide range of subjects, including shared housing, food systems and the impact of climate change on coastal regions, but the economic forecast and 2020 Census were more focused on San Benito County.
Thornberg, the first speaker, argued that the economic crisis related to COVID-19 is nothing like the last recession of 2008.
“Highly inflated parts of the economy, like consumer spending, consumer borrowing, and the housing market began to unwind, and everything that was overheated by all that credit collapsed on itself,” he said. “That meant that millions of jobs were lost, and lost permanently.”
Recovery was contingent on the ability of the country to create new jobs, Thornberg said.
“When that happened, people had to find work, which takes a long time to do. It was the worst downturn since the Great Depression and it did not heal until around 2015.”
Today, Thornberg said, jobs are still there, for the most part, waiting to be filled again when the shelter-in-place order is lifted.
He pointed out that “the numbers we see today are because of the public health mandates.” The hardest-hit category, according to Thornberg, is restaurant jobs. He quoted from the previous week’s unemployment figures for Santa Cruz County, which showed 9,420 restaurant jobs had been lost, representing 78% of employees and staff.
“As soon as the mandates are lifted, the lost jobs come back,” Thornberg said, adding that the lack of income due to unemployment is going to be the biggest problem. “These losses are the long-run damage, the damage that will hinder our ability to bounce back in the third quarter. How much damage that will do to our recovery, nobody knows.”
Thornberg’s concerns for the recovery revolved around what kind of businesses shut down, how long it will take for them to recover, and whether consumers substantially change how and where they spend their money. For example, he said tourism-related businesses will take longer to recover than local stores deemed non-essential. He quoted studies that suggest recovery will be relatively rapid.
“If we look at Italy or Spain, we see that this is about a three-month hit to production and a four-month hit to consumer spending,” Thornberg said. “By the third quarter, most of the mandates should be lifted and things will be getting back to normal.”
Barabba discussed issues relating to ongoing census activities and how the survey impacts local communities. Census figures are used to allocate seats for each state in the House of Representatives. It’s also used for allocating state and federal funds to counties, which Barabba said works out to $20,000 a person.
While figures on undercounts in San Benito County were not available from the last census, the undercount from neighboring counties was estimated as being as high as 2%. With an estimated population of 61,537 residents in San Benito County, a 2% undercount would cost the county $614,800 each year.
“One of the reasons we have undercount is that members of the Hispanic community in some cases are very concerned that the information that is collected might be used against them,” Barabba said. “But I want you to know that under Title 13, not only is your personal information private but even the address you give in the census is confidential.”
The problem of undercounting, in the case of the Hispanic community, also extends to underrepresentation as a group, he said.
“Communities of interest must not only be counted,” he said, “they must also be heard.”