North Bay showing signs of recovery from coronavirus pandemic, says economist
The economic outlook for the North Bay this year is one of recovery mixed with caution, according to one regional expert.
“A lot of the forecasts are predicated upon the idea that additional rounds of fiscal policy coming alongside low-interest rates are going to continue to stimulate the economy over the next couple of years,” said Robert Eyler, Ph.D., dean of the School of Extended and International Education and a professor of economics at Sonoma State University. “However, one of the storm clouds that still hangs over us is how well we're going to get the vaccinations out and how we're going to get those (infection) caseloads knocked down to a point where we can start to lift all the social (distancing) constraints.”
Eyler gave the keynote address at the Business Journal’s annual SSU Economic Outlook Conference virtual event, held Feb. 16. Also presenting were Jean-Francois Coget, dean of the School of Business and Economics at SSU; and Lande Ajose, Ph.D., higher education adviser to Gov. Gavin Newsom.
“The North Bay is showing signs of recovery,” Eyler said. “The (national) forecast for right now is we will have the recession officially declared over, probably fourth quarter 2021, maybe first quarter 2022.”
Eyler said he doesn’t expect that timeframe to be extended and noted that economists are waiting for the National Bureau of Economic Research to make the final declaration.
The recovery of jobs lost last year in the North Bay are forecast to gradually return throughout 2021 if the vaccines work and there aren’t setbacks, such as from a coronavirus variant, he said.
But a full recovery hinges on a majority of people continuing to observe social distancing and other precautions.
“Without that change in expectations, it's going to take a little longer for businesses to get back on their feet, deal with the cost of reopening and staying open, and also rehiring workers,” he said.
Unemployment rates in the six North Bay counties, which ranged from 1.9% to 8.8% in the 2020 calendar year, are showing signs of improvement but the last sectors to rehire will be high-touch industries like hospitality and salons, Eyler said.
Overall, unemployment rates across the North Bay are predicted to return to where 2020 began within the next two or three years, he said.
But more government action will be needed to continue the upward trend.
“Under the supposition that we'll get a relatively robust third (stimulus) package, we should see pretty good growth the next few quarters,” Eyler said, contingent on COVID-19 infection rates continuing to drop.
‘Grand experiment in online learning’
Coget spoke about how the pandemic forced SSU to quickly pivot online, and future strategies for offering courses as hybrids or online options such as real-time learning and recorded options for students who need flexibility in scheduling.
He also addressed lessons learned.
“This has been a grand experiment in online learning,” Coget said, noting that while some universities have been teaching online for some time, the Cal State system had less experience. “Maybe we’ve been in the past a little slower to adopt this innovation. So in this way, I think the pandemic was a positive in that it’s given us an opportunity to experiment.”
Massive revenue shortages
Ajose presented a report about higher education that addresses impacts from the pandemic, including financial and economic crises, and work going forward that targets challenges around digital learning and racial inequities.
She also discussed proposals in the governor’s 2021–2022 budget that address the current problems created by the pandemic. Those include $295 million for one-time emergency financial assistance grants; followed by $100 million one-time and $90 million ongoing to address food and housing insecurity, tech needs and mental health needs.
On the education front, the budget has earmarked $58.8 million ongoing to restore Cal Grant A eligibility for students impacted by a change in living status, and $35 million ongoing to add 9,000 competitive Cal Grant awards, raising the total number to 50,000.
Also included is more than $160 million in programs that better prepare California students to enter the workforce.
“The economic crisis has had a huge impact on the economics of higher education,” Ajose said, adding that cuts to the 2020-2021 budget had to be made last year to meet a $54 billion budget deficit in the state.
As a result, profit sources for colleges, including from auxiliary services like residence and dining halls, are now gone, leaving the institutions with “massive revenue shortages,” she said.
Universities are working on solutions to best serve students’ needs, including trying to find ways to provide them with adequate financial aid, Ajose said. The need for students to go to college also has increased because many of their families are out of work, she said.
A recovery taskforce, which includes Sonoma State University President Judy K. Sakaki, is working now to address inequities in higher education. Facing a deadline of 2030, proposed solutions include creating courses that are diverse and inclusive; clear and easy-to-navigate paths to secondary education; providing middle- and high-school students access to college preparatory work and more. The full report can be found at CAPostsecondaryForAll.org.
American River Bank, Redwood Credit Union and Sonoma State University's School of Business and Economics were major sponsors of Tuesday’s event, which was underwritten by Exchange Bank.