Nearly 4.6 million Californians, among them many Santa Clarita Valley employers and employees alike, have filed for unemployment claims since mid-March, painting an unsettling image of the pandemic’s ripple effect with no clear end.
Statewide, Gov. Gavin Newsroom recently said California’s unemployment rate could reach more than 20% as the state grapples with a projected $54.3 billion budget shortfall as a result of stay-at-home orders that have kept people in quarantine, forcing “nonessential” workplaces to shut down for months.
In Santa Clarita, the preliminary unemployment rate for April peaked just over 20%, according to the state’s Economic Development Department. The numbers also indicate Acton was at 15.9%, while Val Verde was at 31.4%.
“We are projecting in our documents that we’re putting out today in our May Revise of that January budget that unemployment will peak north of 24.5%,” said Newsom on May 14 during a live broadcast. “One could argue that we’re already there. We are at a time that’s simply unprecedented.”
For comparison, an estimated 2.2 million workers filed for unemployment during the peak of the financial crisis, falling 2.4 million short of what the state has recently seen since March 12, said Newsom.
And across Los Angeles County, with about 10 million residents, more than 1 million have filed to receive unemployment benefits since May 20 and of those projected job losses, more than 75% have an average annual earnings of less than $50,000, according to county Supervisor Kathryn Barger, whose 5th District includes the SCV.
“The economic impacts created by COVID-19 have hurt our most vulnerable populations, the most profound closure means that many small businesses may not be able to reopen and will cause permanent job losses for millions throughout this county,” she said during a recent live county briefing.
In the Santa Clarita Valley, many small businesses are working to stay afloat, whether that means doubling down on online operations, reducing their number of employees or placing a freeze on hiring.
They make up a fraction of the SCV’s top sectors that help fortify the local economy, such as tourism and aerospace. These industries are also suffering, echoing an increasing unemployment rate and revenue loss within the city of Santa Clarita.
Santa Clarita has projected a revenue loss of about $10 million, said Mayor Cameron Smyth, and is seeing its local unemployment rate gradually jump. In February, before the pandemic took a hard hit on the city, the rate was at 4.3% and jumped to 6% in March, according to Communications Manager Carrie Lujan.
While April and May numbers have yet to be reported and are expected to be higher, employment numbers will recover but it will take time, according to an April employment report from the county Economic Development Corp.
“(E)mployment figures will take time to recover, and when they do, the composition of the regional and national workforce may look significantly different. Businesses may be forced to close after an extended period without income, and many workers may not have jobs to return to as social distancing measures are kept in place or as residents change their consumption behaviors to even beyond the eventual easing of social distancing measures; or until a vaccine is approved and widely available.”
The good news: SCV businesses across the varied sectors are already looking at how to reopen in a safe manner to hit the ground running in recovering the local economy, according to Holly Schroeder, president and CEO of the SCV Economic Development Corp.
“(Businesses) are buying equipment and touches technology and new PPE and plexiglass guards that can go between customers and cashiers or between workstations,” she said. “Companies are getting ready for what is to come. We certainly hope that we can progress and get people back to work because the fear is that the longer these businesses are closed, the harder it will be for people to come back to work and the less likely it’ll be those companies can survive.” ν