Coronavirus Will Scramble California’s Economy & Lifestyle

Scott Lay
Publisher of The Nooner

I’m covering the coronavirus outbreak extensively mostly because of the economic impact on California and thus the state budget and not to spread panic. It is also consuming Governor Gavin Newsom‘s administration only weeks after a State of the State focused on housing and homelessness. The two aren’t necessarily silos, as there is growing concern about how the virus could spread in homeless camps where there is little medical attention and a medically vulnerable population.

  • California cases: 105, with one death
  • Politico’s Dan Diamond has a well-sourced article with current and former President Trump’s Administration on the power struggles within.

  • The Grand Princess is now expected to head to Oakland today based on information from the cruise ship’s operator, an announcement of the plans by the captain to the passengers and crew on board, and a local official, although the Governor’s Office and others have not confirmed the plan. President Trump has said both he doesn’t want the ship to come to a US port that would push up the official numbers of US cases but also that he was delegating the plans to Vice President Mike Pence. “I don’t need the numbers to double because of one ship…I would prefer that the people stay on,” President Trump said at the CDC on Friday.

    This is the most detailed description of the plan, from the LA Times, which includes details from Governor Newsom.
  • There is a possibility that the Placer County man who died may have brought the coronavirus onto the Grand Princess, reports Erin Allday in the Chron.
  • In the LAT, Taryn Luna and Melody Gutierrez report that California’s county health officials are starting to get overwhelmed and often caught by surprise.
  • The City and County of San Francisco has banned non-essential large gatherings at all city-owned buildings. “The “non-essential group event” order applies to gatherings of more than 50 people for social, cultural or entertainment purposes. The order will be effective until March 20.”

On the impact on SF, “This coronavirus is having a significant impact on our economy,” Mayor London Breed said at a news conference Thursday. Conference cancellations, lost hotel taxes and other impacts will bring a “significant reduction to our budget in the coming year,” she said, adding that safety is the city’s top priority.

In the city’s interconnected economy, canceled flights at San Francisco International Airport mean fewer hotel bookings, restaurant dinners and local purchases. Major companies are banning domestic business travel and implementing work-from-home policies, which means fewer commuters and less money spent downtown.

The city’s conventions, which draw thousands to the Moscone Center, have taken one of the most obvious blows. Participants at a slew of tech gatherings have pulled out, with seven events through May at Moscone nixed entirely, according to San Francisco Travel. Some 182,000 hotel rooms had been booked for those events, though not all have necessarily been canceled, and the associated spending in the city before the cancellations had been expected to total around $138 million, the agency said.”

  • With the NBA warning teams of the possibility of games continuing without an audience and suggesting teams make contingency plans, fans arriving at the Chase Center for the Golden State Warriors game last night were greeted with signs on all the doors stating that, by entering, they were accepting the risk, and instructing fans meeting certain criteria to go away.
  • Parents are in an uproar after the Elk Grove Unified School District (EGUSD) announced that all schools will be closed this week, later clarified as a move of spring break up three weeks. The rationale was that a family associated with Northern California’s largest school district is currently in quarantine. Parents were irate initially as they scrambled to solve the child care problems, an anger that only accelerated when the “advancing spring break” plan was announced in a press conference that came a couple of hours after the initial email went to parents. They point out that they already have nonrefundable travel plans. Officially, the move is to “minimize the impact of student learning,” but of course, EGUSD is also thinking about its per-student ADA funding.

    Obviously, subsidized or not, find a last-minute child care spot is near impossible. This likely means there will be large-scale unexpected absenteeism across the Sacramento region this week. That said, as the doctor said on This Week this morning, it’s not about the kids themselves getting sick, as they are of low risk. It’s about carrying the virus home to their 82-year-old grandmother. That’s why they are testing everyone on the cruise ship. There are asymptomatic carriers; that’s why people are on home quarantine after being tested.

    The national high school basketball powerhouse Sheldon in the EGUSD has been forced to pull out of the post-season competition.
  • Stanford University has canceled all in-person classes, replacing them with online classes through the end of the month. A faculty member has tested positive for the virus. University of Washington has taken the same approach. San Diego State and UC San Diego faculty have been told to prepare to go to online instruction in the event cases are discovered on campus.
  • Salesforce, San Francisco’s largest private employer, has told all of its employees (10,000 in SF) in both SF and Seattle to work-from-home the rest of the month.
  • There is a debate as to whether the Coachella music festival in Indio (Riverside County) should proceed as scheduled April 10-19. It’s one of the biggest economic engines for the area but after SXSW and the Miami Music Festival cancelations/postponements, some residents are wondering whether its wise to proceed, given that the roughly 250,000 people over two weekends travel from around the country and world.

    Riverside County’s public health officer, Dr. Cameron Kaiser, said on CNN yesterday that there was no need to cancel it because there have been no cases in the county. Well, you guessed it–there now is one in the Coachella Valley and concerns in Murietta on the western edge. The Coachella Valley is of particular concern because of the number of retirees who live there, meaning they are considered to be in a high-risk group.

    While the Coachella music festival likely has few high-risk attendees, the concern is that non-high risk individuals can be infected and relatively asymptomatic carriers, that can transmit the virus to vulnerable people, say at the airport or flight home. (I know I’m repeating myself from the Elk Grove Unified item above, but I know this about viruses from my three years of working in the Pediatric ICU at Children’s Hospital of Orange County and what we were taught.)
  • The economic ramifications are starting to settle in about the collateral impact among vendors, contract workers, and businesses such as restaurants. My sister, a restaurant exec for a mid-sized chain in SoCal told me yesterday about the implications: cancelation of numerous catering contracts, decline of individual patronage, supply chain challenges, and a worry that employees may be sent into self-quarantine or unable to work because of child care needs if schools close.

    Given that the supply chain has ground to a halt because ships are largely not being loaded in Asia, port traffic has dried up at the huge Oakland and Los Angeles/Long Beach ports, which means little work for longshoreman, truck drivers, and the San Francisco Bay Pilots, who steer the container ships through the SF Bay to and from port with their tugboats, and are very politically powerful.  The lack of work for some of the highest-paid blue color jobs in Northern California thus is having a collateral impact across the economy, from restaurants to leisure. Los Angeles/Long Beach is the nation’s largest port.

    It will also likely raise the AB 5 issue, as many if not most of the truck drivers are independent contractors that haul containers to railyards for transportation throughout the west. That means no unemployment insurance. A federal judge has ruled that federal law preempts AB 5’s application to independent truckers.

    In the Chron, Carolyn Said reports on the disproportionate impact the epidemic has having on low-wage workers, like those making pies for tech companies, many of which are telecommuting.

Cashiers, cooks, waiters, janitors, cabbies, ride-hail drivers, health aides, day care workers and others often live paycheck to paycheck. They cannot work remotely, cannot afford any loss of income, and often have minimal, if any, paid sick leave.

But now there is less need for their services as many people work remotely, tourists and business travelers stay home, and public events get canceled. Service workers’ financial hardships could be even more dire if home quarantines get imposed.

Also in the Chron, Chase DiFeliciantonio reports that some of the big tech conferences that have been canceled or postponed are considering turning them into virtual conferences. For a city that has a huge hospitality and travel industry (including convention space, hotels, and airports), it could have a devastating impact on service employees.


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