Coronavirus updates: Economists weigh in on crisis; thousands protest at California Capitol
As concerns of another economic downturn in the style of the housing market crash of 2007 or even the Great Depression nearly 90 years prior continue to swirl in the midst of the coronavirus pandemic, speculation is endless and fears are mounting.
The Sacramento Bee spoke with several economists to get a better sense of the severity and longevity of the current crisis, which has resulted in mass layoffs, store closures and bankruptcies.
The Nordstrom store at the Arden Fair mall was one of the first to close its doors for good in Sacramento, along with premier Italian eatery Biba. More recently, Pleasanton-based Specialty’s Cafe & Bakery shut down after 33 years in business.
After all the attrition, Californians are growing restless and more worried.
As hordes of people newly out of work began filing for unemployment, 91 percent still had hope to return to their jobs, according to a study by the California Policy Lab at UCLA and UC Berkeley. But now, 69 percent of those workers still have hopes of going back to their place of business.
“You can see the unemployment claims still piling up,” said Sanjay Varshney, an economist and finance professor at Sacramento State University. “Some damage will be irreversible.”
The California Employment Development Department released new Sacramento-area employment figures on Friday, which reflected 14.2 percent of residents were out of work. Meanwhile, the statewide unemployment rate was at 15.5 percent.
Jeff Michael, an economist at the University of the Pacific, predicted that California will likely see an unemployment rate of 18.8 percent — which is considerably higher than the rate experienced in the wake of America’s last downtown, which peaked at 12.3 percent — but said that it would probably not surpass that.
Still, that would be much lower than the 25 percent rate Gov. Gavin Newsom suggested the state could reach, around the same rate seen at the peak of the Great Depression.
Chris Thornberg, a Southern California economic consultant, argued that the recession caused by the coronavirus is fundamentally different than previous downturns due to the fact that it was not caused by a faltering economy or struggling market, which may mean a relatively quick return to pre-pandemic conditions.
“This is not the same kind of unemployment you saw during the Great Recession,” he said last week. “This is not a financial bubble.”
Coronavirus by the numbers
Just over 5.4 million coronavirus infections have been reported globally, while more than 344,000 people have been killed by respiratory illness COVID-19 and more than 2.1 million patients have recovered as of Sunday afternoon, according to data provided by Johns Hopkins University.
The world hit the 5 million mark Thursday. On May 9, the global infection total was 4 million. On April 27, it was 3 million. On April 15, less than two weeks before that, the world hit the 2 million mark. Two weeks before that, on April 2, it was 1 million.
The United States accounts for about 30 percent of all coronavirus infections, with 1.6 million cases. More than 97,000 Americans have died due to the virus.
Brazil became the second-most infected country in the world this weekend, with 347,000 cases and 22,000 deaths. The South American country has seen a significant surge over the past few weeks.
Russia has also seen a surge. It’s up to 344,000 cases and 3,500 deaths.
New York state still has more cases than either of those nations, with over 361,000 infections and 29,000 deaths.
California has seen more than 93,000 cases and 3,700 deaths as of Sunday afternoon, according to Johns Hopkins.
The state’s largest hotspot remains Los Angeles County, which has confirmed 44,000 cases of coronavirus and amost 2,100 deaths.
As of Sunday morning, Sacramento County health officials were reporting 1,293 infections — up by four from Saturday — and 56 deaths. The county’s last reported death came Monday.
On Sunday, Yolo County reported 194 cases — up by four from Saturday — and 22 deaths. Of those deaths, 15 were connected to the Stollwood Convalescent Hospital in Woodland.
As of Sunday morning, Placer County reported 184 cases and nine deaths. The county’s first death in more than a month was reported Friday.
El Dorado County reported 74 cases — up by seven from Thursday — and no deaths on Friday.
Yuba and Sutter counties have reported no change in cases in about a week. Sutter reported 40 cases as of Sunday. Two people in the county have died of COVID-19. Yuba has reported 28 cases and one death.
Weekend protest at Capitol
A rally at the Capitol drew 2,000 demonstrators Saturday, who continued to protest Newsom’s stay-at-home orders.
At least one among them, a Roseville cosmetologist, set up an impromptu barbershop and offered haircuts to fellow protesters.
Most hair and nail salons, which by nature involve close-quarters contact, remain closed for business across the state.
“We’re going to do haircuts for donations, basically try to show that being in the cosmetology industry ... is one of the most sanitary industries in the state,” La Donna Christensen said. “Why do they close down the salons, but we can go to Home Depot, Walmart, Target? It’s ridiculous.”
Although California has made steps toward slowly reopening key sectors of the economy, some argued that the process is too slow and comes at too high a cost.
Thinh Nguyen, a manicurist whose North Highlands nail salon has been closed by Newsom’s policies, demanded action.
“We’ve got to reopen everything now,” Nguyen said. “Whatever he says is all lies, this governor.”
Others were more concerned with the status of worship in California. Newsom has maintained that churches must remain closed for the time being, as large congregations could act as petri dishes for the coronavirus.
“We pray for Gavin Newsom, as hard as that is for us to do, because he is so wicked,” Southern California pastor Tim Thompson said. “It’s not up to the government to tell the churches what to do.”
Newsom said on Friday that he would soon be announcing new guidelines for churches, after the U.S. Justice Department warned that prohibiting religious services may be unconstitutional.
What is COVID-19? How is the coronavirus spread?
Coronavirus is spread through contact between people within 6 feet of each other, especially through coughing and sneezing that expels respiratory droplets that land in the mouths or noses of people nearby. The CDC says it’s possible to catch the disease COVID-19 by touching something that has the virus on it, and then touching your own face, “but this is not thought to be the main way the virus spreads.”
Symptoms of the virus that causes COVID-19 include fever, cough and shortness of breath, which may occur two days to two weeks after exposure. Most develop only mild symptoms, but some people develop more severe symptoms, including pneumonia, which can be fatal. The disease is especially dangerous to the elderly and others with weaker immune systems.
This story was originally published May 24, 2020 at 11:17 AM.
