Coronavirus Pandemic: Uncertainty over kickstarting the economy after COVID-19

Thursday, May 14, 2020
SAN FRANCISCO (KGO) -- The economy shut down abruptly due to the coronavirus pandemic, leaving ghost towns in normally bustling business and retail areas. Twenty and a half million jobs evaporated in April.

"This is a huge, huge blow. This is the worst economic calamity to hit our economy," said Dr. James Wilcox, an economist and professor at UC's Haas School of Business.
[Ads /]
RELATED: 3 counties branch off from strict Bay Area stay-at-home order, changes to come Monday

The road to recovery is not likely to be fast or easy. Economists tell ABC7 News that it's not like hitting the "on" switch. Bay Area residents say there could be consequences.

"I think if we open it too soon, too fast or too sudden, it's just going to get worse," said Robert Grossman, an emergency medical technician.

Just opening a shuttered business doesn't guarantee spending after weeks of observing social distancing. For laid-off or furloughed workers, income loss has tempered the urge to spend.



"Until we're more confident about being around a lot of other people, it's going to be very difficult to get the kind of robust consumer spending and even business investment spending that we're going to need to revive this economy," said Prof. Wilcox.
[Ads /]
RELATED: Majority of San Francisco retail businesses to reopen Monday for curbside, delivery sales, mayor says

Government has been under pressure to allow businesses to reopen. Even though they were given conditional approval, some owners and some employees have said they don't feel it's safe yet.

"The workers must have a voice in how they're going to open up... if they feel safe... and to make sure that they are feeling safe," said Dr. Sylvia Allegretto, a labor economist and co-chair of the Center on Wage and Employment Dynamics at UC Berkeley.

Economic pressure is building on families facing weeks without paychecks.

"I'm fortunate enough to be able to feed mine, and I would like other families to be able to take care of themselves, too," said Alexis McGee, a parent who works as a forklift operator.
[Ads /]
Jobs with the most people contact were part of the first wave of layoffs - retail, the airline and hospitality industries. Even routine dental and medical care have been impacted. Because of that nature, those are the jobs expected to be slower to recover.



Several economists used the phrase "unchartered territory" in describing why they don't have a definitive game plan to kick start the economy. Companies are starting to evaluate how many people need to work in offices after working from home. Some retail stores may close or reduce their numbers. Another round of government stimulus may be needed.

"What we need is more investment," said Dr. Allegretto. "We know that the unemployment has been slow to roll out. The one-time stimulus checks are certainly not enough."

If the infection rates rise as businesses open, that could lead to a second wave of shutdowns and inflict more economic damage.

If you have a question or comment about the coronavirus pandemic, submit yours via the form below or here.
Get the latest news, information and videos about the novel coronavirus pandemic here RELATED STORIES & VIDEOS:
Copyright © 2024 KGO-TV. All Rights Reserved.