Business leadership: Full recovery by 2024, maybe
Oregon's economy will not fully recover from the COVID-19 pandemic until 2024 — and even then it will only recover if the virus is brought under control. If the virus continues to spread, the economy could get even worse than it is now and will take longer to recover.
That is the sobering conclusion from an analysis of current economic data by the ECONorthwest consulting firm scheduled to be presented during the free Tuesday, July 28, kickoff of the Oregon Business Plan Leadership Summit Series.
At the same time, when the economy recovers, it will be much different than before, requiring changes at work sites to ensure continued safety and retraining for former employees whose jobs are never coming back.
The long-term needs of the economy also will be discussed at the public Wednesday afternoon forum, which will include a conversation with Oregon Gov. Kate Brown on the state's public health and economic challenges.
The ECONorthwest analysis found that when the economy first shut down because of the pandemic, unemployment spiked from 3.5% in January to between 15% and 17% in late April. At one point, more than 280,000 Oregonians filed unemployment claims. The analysis describes that as "Closing the economy to save it."
The unemployment rate has fallen to around 11% since Brown authorized counties to begin reopening their economies. But the leisure and hospitality sector continues to struggle.
"The leisure and hospitality sector has suffered the most, and that has hit Oregon especially hard because our economy is so dependent on tourism. It won't have an opportunity to fully recover until after the virus is eradicated," ECONorthwest President John Tapogna said of a major finding in the analysis, which was commissioned by Oregon Business & Industry, Food Northwest and Oregon Business Council.
At the peak of the shutdown, around 46% of all leisure and hospitality workers in Oregon lost their jobs. Even today, hotel and restaurant spending is off 40% in Oregon compared to 32% in the United States as a whole.
Many of those jobs will never return, requiring a long-term strategy for helping those and other former employees find work in the new economy. Such planning has always been the goal of the Business Plan, which has traditionally been adopted every year at a large summit at the Oregon Convention Center attended by business, community and elected leaders. The plan adopted last December promised to increase equity and shared prosperity, goals that are even more important now, even as the pandemic has prompted the sponsoring organizations to shift gear and offer a series of upcoming meetings for free to the public.
"The pandemic has intensified the urgency of concerns about economic equity and shaped our research and planning discussions for this year's Oregon Business Plan," Duncan Wyse, president of the Oregon Business Council, said ahead of the online Tuesday summit.
Other major ECONorthwest findings include:
• The pandemic has exacerbated labor market inequities. Job losses are disproportionately concentrated among young, low-wage workers. Most likely to be laid off are workers 24 to 35, those with a high school diploma or less, Blacks and Native Americans.
• Those counties hit hardest were the most tourism dependent, included Clatsop, Curry and Lincoln counties on the coast, and Deschutes and Jefferson counties in Central Oregon.
• The federal CARES Act, authorized this spring by Congress, is the largest stimulus package in U.S. history. Although the spending helped by providing direct payments to lower- and middle-class Oregonians, it was designed around an expectation of a "V" shaped recovery — a quick downslide and an equally quick improvement — that is not playing out.
In addition, U.S. Census surveys in the analysis found approximately one third of renters do not believe they can make their August payments and more than half of small-business owners believe it will take six months or more for operations to return to normal.
Also participating in the summit will be: Joth Ricci, Oregon Business Plan chair and president of Dutch Bros Coffee; Shari Dunn, CEO of ITBOM LLC; Rukaiyah Adams, chief investment officer at Meyer Memorial Trust; Andrew Colas, president of Colas Construction Inc.; Mark Jackson, president of REAP Inc.; Sandra McDonough, president of Oregon Business and Industry; and Craig Smith, director of government affairs for Food Northwest.
"Policymakers, business leaders and the community must jointly create safe and predictable paths for businesses to reopen, workers to return to their jobs, customers to return to local businesses, and Oregonians to return to some semblance of normalcy," McDonough said ahead of the summit. "Employers, employees and the public must trust that it's safe to risk returning to work."
People canwatch a replay of the summit here.
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