SCAG Report: COVID‐19 Impact on SoCal Economy Will be Severe and Long‐Lasting, With Historic Levels of Unemployment, Taxable Sales Losses
Southern California faces “severe and long-lasting” economic impacts from the COVID-19 pandemic, with Great Depression-level unemployment, supply chain interruptions and significant drops in taxable sales, according to an analysis from the nation’s largest metropolitan planning organization.
The report, prepared by analysts at the Southern California Association of Governments (SCAG), projects an annual unemployment rate for the six-county region of 19.3% in 2020, tapering down to 12.2% in 2021. The 2020 rate is particularly significant given that year started with unemployment averaging around 4% in January and February. In April alone, SCAG estimates job loss rates of 20% to 22% – a surge that surpasses the more gradual trendline during the Great Depression, when U.S. unemployment took more than three years to reach its peak of 24.9% in 1933.
The analysis also projects decrease in taxable sales of 26% to 38% in 2020 and 2021. In total dollars, those decreases would range from $178 billion to $264 billion, which could severely impact local municipal budgets that rely on sales tax revenues. The forecast models do not take into account the possibility of further waves of infection or the still-unclear impact of government spending on relief efforts.
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Read the complete report: Potential Economic Impacts of COVID-19 in the SCAG Region