California is unlikely to recover its pre-coronavirus prosperity over the next three years, economists say.
Beneath the fury over George Floyd’s death lie longstanding economic inequities that have plagued California’s 2.6 million black people.“Even with the recovery, there will be 800,000 fewer jobs in California by the fourth quarter as compared to the first quarter” of 2020, according to a Chapman University outlook released this week. It predicts an average 11.3% unemployment rate this year.
“Like an earthquake, this is only the start,” he wrote in the bank’s forecast. “State and local spending is expected to fall sharply to help balance the state budget, further weighing on California’s job creation.”The UCLA forecast expects a sluggish trajectory for personal income in California, which would drop 0.9% this year, rising just 1.4% next year and 2.2% in 2022.
“The COVID-19 pandemic has created a sense of caution on the part of the general public, both within California and among tourists who might come to the state,” the UCLA forecast said. “Potential customers for these businesses will want to feel safe before venturing out.” Workers in retail and leisure and hospitality earn relatively low wages — about half the statewide average. “Because of that, the economic damage to the state will be far less than that implied by the huge job losses,” according to the Chapman forecast.
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