UC Santa Barbara Econ Group Surveys Ongoing Effect of COVID on Local Economy

In an online webinar on October 20 featuring UCSB economics professor Peter Rupert and a handful of officials who work on issues in housing and workforce development, experts discussed the ongoing effects of the COVID-19 pandemic on areas such as housing, employment, and small business. While the panelists were cautiously optimistic about the progress made since the pandemic resulted in shutdowns for the first time in March, they warned that the expected spike in the coming winter months could put local businesses and workers in an increasingly strained position, hitting the most vulnerable segments of the population the hardest.

“The recovery has not been evenly distributed at all,” said Professor Rupert. “Things were generally going pretty well before COVID, with people looking for work mostly able to find it, but even then a lot of families were struggling to get by.”

In addition to Rupert, the panel included Raymond McDonald, executive director of the Workforce Development Board; Kathy Odell, CEO of Women’s Economic Ventures; and Rob Fredericks, CEO of the Housing Authority of the City of Santa Barbara.

After COVID hit, unemployment initially jumped to around 13 percent, with sectors like leisure and retail being hit hard. Already struggling with a housing crisis, many worried about the prospect of mass evictions. Several months later, the panelists say that there are some encouraging signs: Unemployment has dropped to around 7 percent, close to the pre-pandemic average. Odell states that restaurants with outdoor seating are seeing positive signs, and that Santa Barbara is still attracting tourists because of its exceptional weather. Professor Rupert notes that, at least anecdotally, high-income individuals seem to be moving to Santa Barbara from large cities, hoping to wait out the crisis somewhere with good weather and quality of life.

But the recovery has also not been distributed evenly. While Professor Rupert states that, for the most part, renters have been able to pay their rents, he also notes that renters have less of a financial buffer than homeowners and says another federal stimulus will be an essential part of staving off a crisis.

Fredericks of the Housing Authority voiced concern that once eviction moratoriums, mortgage forbearances, and other protections come to an end, a renewed spike in the winter could put many at risk of eviction. “I’m fearful that it’s going to be larger than we are all thinking right now,” Fredericks said.

Childcare also continues to be a major issue, especially for low-income families. Nationwide, 40 percent of childcare facilities closed, and the task of watching their children has meant that some individuals cannot take jobs because they have to stay home with their kids. With less access to internet and electronic devices, the pandemic has also exacerbated schisms in the quality of education available to people at different income levels.

“The bottom line is this: There’s some cause for optimism, but we’re not out of the woods yet,” said Rupert, “and another big spike in cases could mean trouble for people who are struggling to get by.”

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