The unemployment rate for Santa Barbara County hit a record high of 13.7% in April, up from 5.7% in March and well above the 3.4% rate in April 2019.
Nonfarm industries lost an estimated 20,700 jobs from mid-March to mid-April, down to a total of 166,300.
While all nonfarm industries were impacted, leisure and hospitality were the hardest hit, losing an estimated 10,700 jobs.
The losses in hospitality and leisure have been a common trend across the Central Coast according to Andriy Moskalyk, labor market consultant for the California Employment Development Department.
“Because a lot of the businesses that were closed were in leisure and hospitality and Santa Barbara County has a lot of those jobs, that was the industry that was most impacted,” said Mr. Moskalyk.
“When you look at April, we had lost about 20,000 jobs. Fifty-two percent of those were in leisure and hospitality.”
Other notable losses were seen in the health and social assistance sector, where 2,600 jobs were lost. Retail employment dropped by 1,400, down 7.5%. Professional and business services also saw a loss of 1,400 jobs in April, down 6%.
The numbers, calculated by the Employment Development Department using unemployment insurance claims, do not include Lompoc and Solvang.
Because almost all industries except for agriculture are concentrated in Santa Barbara rather than Santa Maria, Mr. Moskalyk estimated that the Santa Barbara metropolitan area was the hardest hit in the county.
Unlike nonfarm industries, agriculture continued to add jobs through April, surpassing the estimated job growth from the same time last year. During the March and April season, agriculture usually adds around 4,000 jobs, according to Mr. Moskalyk. This April, the total number of agriculture jobs grew by 6,600.
The combination of closure orders for restaurants and stay-at-home orders issued in late March made the impact on Santa Barbara’s hotel industry particularly harsh.
“What was immediately hit of course were the restaurants that were in the hotels, and restaurants and bars are one of the ways in which hotels actually make a lot of money,” said Raymond McDonald, executive director for the Workforce Development Board of Santa Barbara County.
“When those shut down and people couldn’t go to the bars and restaurants at the hotels, it made it even more impractical for people to travel and stay in a hotel because there was nowhere to eat, so it made it even worse.”
About 20% of South Coast hotels have closed temporarily and the city of Santa Barbara lost an estimated 1.5 million dollars in transient occupancy tax in April, according to Kathy Janega-Dykes, president and CEO of Visit Santa Barbara.
For those that remain open, occupancy was at 20% in April, said Mr. McDonald.
“That’s probably a bounce back. I remember in late March it was down to about 10%,” Mr. McDonald told the News-Press.
Despite the record high unemployment rate, Mr. McDonald and Mr. Moskalyk are optimistic about Santa Barbara County’s prospects for recovery.
Nationally, unemployment rates decreased in May down to 13.3% from 14.4% in April, the U.S. Bureau of Labor Statistics reported Friday. Total nonfarm payroll employment rose by 2.5 million and the number of unemployed persons fell to 21 million.
Santa Barbara County will begin assessing local unemployment rates for May on June 12, and both Mr. Moskalyk and Mr. McDonald don’t anticipate any dramatic spikes in the county’s rate like the one seen in April.
Predictions for the rest of the year are, of course, difficult, and largely depend on how quickly the economy can reopen and if there is a second wave of COVID-19 cases seen later in 2020. Also, many businesses that have temporarily closed may never reopen due to financial difficulties, and consumer spending may decline as fears over the pandemic linger.
Either way, it won’t be an overnight recovery.
“It’s hard to say what’s going to happen. Based on the scenarios where there will not be any spikes and then no significant business closures, I’d say that I would personally expect the unemployment rate to go down, but probably not to the rate of 3.4% we had the previous year,” said Mr. Moskalyk.
While the timeline for recovery remains unknown, Mr. McDonald told the News-Press he suspects that there will be widespread reassessment of business models in most industries.
“I think that overall, the thing that we all have in common is that we’re going to look back and we’re going to say, ‘OK, what did we do during the emergency that we should continue doing?’” said Mr. McDonald.
“Businesses may make the choice about teleworking. I think that there could be an impact on commercial real estate. People may decide maybe they don’t need to have people come into work and have people sit at a desk. All of those things are possibilities, but I think that everybody’s going to do a reassessment of the way that they have been working and the business model that they’ve been using.”