North Bay economist, businesses react to Newsom’s forecast for reopening
April 14, 2020
Economist Robert Eyler wasn’t among those who thought Tuesday’s announcement by Gov. Gavin Newsom would be when the state would be back in business.
“What’s good about it is now we have six main bullets to watch in terms of where we think there’s going to be some lifting of the social policy,” said Eyler, dean of the School of Extended and International Education and a professor of economics at Sonoma State University. “One thing about the governor actually saying something with this specificity is that whatever data are available on the infection rates in that curve, and also on the supply and demand conditions in our health systems, are going to be watched very closely by a lot of people because they will be trying to predict the turn now, for whatever that’s worth.”
Whatever that’s worth isn’t a lot quite yet.
“There’s an enormous number of questions before anybody — rationally — should be doing any kind of real predictions,” Eyler said.
The North Bay business community has been reeling since the shelter-in-place order took effect on March 19. The tourism industry that buoys Wine Country has nosedived. Year-over-year occupancy rates in Napa and Sonoma counties for the week ending April 4 dropped by 86.2% and 65.5%, respectively. Unemployment in the region also has skyrocketed along with the rest of state and nation with thousands applying for benefits.
Newsom indicated Tuesday it would be a few more weeks before first steps are taken to lift the shelter-in-place order. Restaurants are expected to be among the first businesses to reopen, and they will likely operate with fewer tables spread across the dining room.
“Once we know the social policy, and the way that the restaurants gather, we can use historic data to at least (determine the) probable impact on the industry,” Eyler said. “If restaurants are asked to reduce their capacity by about 15%, you can hypothesize that they’re going to lose maybe 15% to 20% of revenues … that’s one way of thinking about it.”
Jot Condie, president of the California Restaurant Association, added in a statement: “It’s clear now that the fight for our public health is ongoing and that physical restrictions will continue, in some form or another, for an extended period of time. So, what is most critical right now for the future of restaurants is stepped-up state relief. That’s because restaurants will have difficulty sustaining their businesses and their workforce if their number of guests is restricted, particularly if public health needs dictate that those restrictions last months.”
Eyler noted one of the concerns for economists is that even when businesses begin to reopen, the owners may be tentative about future planning because of concern that COVID-19 could see a resurgence.
In other words, the vaccine will have to be available and ubiquitous before there’s any real sense of security.
“Once that gets confirmed, then we’ll really start to recover,” Eyler said, noting that if the vaccine comes online in the 12 to 18 months as has been stated, “that will then springboard the global economy back toward its normal routine.”
In one area of entertainment in the North Bay, there are still currently hopes of a return to something close to normal, perhaps.
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