The Santa Barbara regional economy is taking an even bigger blow this month than it did in the wake of fires and subsequent mudslide more than two years ago.
Not only are many businesses and shopping malls closed, hundreds of employees there, at the Metropolitan Transit District, airlines, Samsun Clinics, dentists, gyms, spas, salons and government workers are laid off or furloughed indefinitely.
Despite the federal $2.2 trillion recovery measure approved March 27, which is supposed to give $1,200 to most Americans, those funds may not reach recipients for up to several weeks. What happens in that gap?
Some people need that cash much sooner since there may be many fewer places to spend it soon.
“Cutting a government check to every American will not prevent the widespread collapse of small businesses that will happen if shelter-in-place orders are still active in six-to-eight weeks, wrote California Lutheran University economists Dan Hamilton and Matthew Fienup in a March 23 blog. “After that, workers will not have jobs to return to once the spread of the disease has slowed. Putting money in people’s hands will also not help if many of the businesses where people usually spend money are shuttered.”
They also wrote that: “If shelter-in-place orders last long enough to drive a large number of small businesses into insolvency, then we are in store for a very deep recession, one considerably more severe than the so-called Great Recession. Given the plight of hourly workers and lower-income families under this scenario, we may even experience what can rightly be called a Depression.”
The federal measure also calls for business recovery loans, but just as commercial areas such as State Street showed some signs of improvement this year, this economic pandemic probably will force many enterprises to shutter forever.
It will be challenging for even large chain stores such as closed Nordstrom in Paseo Nuevo and Macy’s in La Cumbre Plaza to return to normal because of the pandemic and the already fragile state of retail.
That’s a stark reality worse than the one that the region faced a couple years ago when Highway 101 was closed for two weeks.
Not to be a total Debbie Downer, it should be noted that most market shelves still have supplies for purchase and those businesses are hiring more workers while farmers markets and cannabis dispensaries are still operating, if patrons don’t get too close. Not many people are buying cut flowers, though.
Overall, practically all business and social events in the region are canceled or postponed for the time being. This is another hit on the economy since caterers and meeting room operators also lose revenue.
Santa Barbara County has set up a website page to help: www.readysbc.org/economicrecovery/
Posted March 28, 2020.