SANDAG economist predicts recovery will be long and slow
by DAVE SCHWAB
Published - 06/09/20 - 02:30 PM | 2395 views | 10 10 comments | 38 38 recommendations | email to a friend | print
An economist with San Diego Association of Governments believes the nearly three-month shutdown of much of San Diego’s economy will translate into a long, slow and painful recovery.

“It’s going to take longer than we hoped, that’s for sure,” said Ray Major, chief economist with SANDAG, the region’s transportation planning agency comprised of local government City and county officials, which sets and oversees planning and fares for public mass transit.

“If we’d been shut down for two weeks, which was the original plan in March, reopening April 1, it would have been just a small blip. The problem we’re running into now is that the business re-openings are coming with lots of strings attached.”

Added Major: “Not everyone can go back to work now the way they did before the pandemic. And new health rules and regulations that have been put in place are reducing the possibility of businesses being profitable.”

A case in point, said Major, is the restaurant industry.

“Restaurants are marginally profitable at 100% capacity,” said Major. “Now with them at 25% to 50% capacity, there’s no fix for that, no way they can make as much money. So they won’t need as many waiters, waitresses, and chefs for a prolonged period.”

Concerning the impact of the pandemic on tourism, Major noted, “The industry was completely decimated, and with not many people flying, you’re not going to get back that business and convention business this year. That could take 1-2 years for that to come back. I don’t know of many businesses right now that would mandate that their employees go in-person to a convention. As with 9/11, it took about two to three years to get air travel back.”

Major pointed out that “just because we’re reopening businesses doesn’t mean everybody is opening evenly.”

The SANDAG economist predicted that “2020 is going to be a bust,” adding 2021 could follow suit if there were to be an increase in coronavirus cases, and the government was to partially shut down the economy again. “Then you would see a tremendous amount of pain and suffering in the economy,” he said.

Of the revival of mass transit, which SANDAG, pre-pandemic, was pushing to be expanded rather than building more highways, Major said: “Trolley and bus ridership is down right now. A lot of people are not using it because they’re working from home, or due to health concerns. It will take a little time for that (ridership) to come back.”

There is another problem with the economy now: People not wanting to go back to work.

“The federal government subsidizing people not to work is making it very difficult for businesses to get their employees to come back,” Major said, adding, “Also, there’s this gray area where the government is saying, ‘If people don’t feel comfortable going back to work, that they don’t have to (right away).’ That’s part of the reason why it’s been a little hard to reopen the economy, the rules are different for every single business.”

The unforeseen pandemic is having unpredictable outcomes with the economy, in Major’s view.

“This is the first time we’ve ever shut down the economy,” he said. “It came after we had the strongest economy, and longest expansion, in history. And all of a sudden, you shut it down. When it was shut down, the fundamentals of the economy were really strong. I’m hoping that is enough to re-ignite businesses and get people to go back to work.”

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