California Faces an Economic Downturn


Photo Courtesy of U.S. Bureau of Labor Statistics

Unemployment concerns are especially prevalent in Los Angeles with about 70% of people living in neighborhoods immediately south of downtown Los Angeles facing a high risk of unemployment, according to a report by nonprofit organization Economic Roundtable.

Junhee Ryu, Business Manager

As nonessential businesses face difficulties paying their workers, California is struggling to deal with increasing unemployment rates throughout the months of March and April. 

According to ABC 7, California recently announced that over the course of the past month, about 3.1 million people filed unemployment claims. Unemployment rates for March were approximated at 5.3%, compared to February’s rate of 3.9%.

Although Gov. Gavin Newsom laid out six procedural guidelines to help remedy the losses and recover the economy, some people, including state Sen. Andreas Borgeas, have expressed concerns that the plan is too vague.

The governor should issue an executive order that offers a timeline on when businesses can initiate a phased reopening in accordance with health guidance protocols,” Borgeas said, according to CalMatters. “Such an executive order would allow sufficient time for businesses to stock inventories, rehire workers and comply with health guidelines.”

According to a report by nonprofit organization Economic Roundtable, there are three occupational groups that do not have a high risk of unemployment. 

The first is occupations essential to public safety, such as medical doctors. The second is occupations where off-site work can be performed, such as some software engineers. The last category includes occupations that are likely to remain salaried, such as school teachers. 

The report identified that 43% of California workers do not fall under these umbrellas, leaving them with challenges to get financial support.

During swings in our national business cycle, we have two possible areas that can act to correct our economy,” social studies teacher Kathryn Beechinor said. “The first is fiscal policy, which is carried out by our federal government. The second response our nation can take is via our Federal Reserve Bank, which conducts monetary policyWhat California can specifically do is use these two avenues to help adjust the national economy back, which will in turn help our state economy.”

In Orange County, due to some local beaches being open, more people have been enjoying their leisure hours outdoors near the ocean. Gov. Newsom claimed that that could potentially delay the reopening of the economy if the infection rates soar once more. 

The coronavirus is definitely creating a bit of uncertainty for my family,” senior Jacob Bashawaty said. “My dad’s business has taken a bit of a hit, and we’re hoping things go back to some degree of normalcy so that he can sustain it.”