California’s lockdown began on March 19th. It turns out that closing your economy for this long costs a lot of money:
California’s economic rebound from the coronavirus may take longer than people may think as the state struggles with record “Depression-era” unemployment numbers, Gov. Gavin Newsom said on Wednesday.
“It’s going to take longer than I think a lot of people think. It’s going to take a lot longer than people are saying. This is serious, we’ve never experienced anything like this in our lifetime,” Newsom said in response to a question regarding how long it will take for California to rebound from Covid-19.
Newsom said that in January, California had record low unemployment and reserves in its budget. However, the state’s upcoming budget is now facing holes that will fall “tens of billions of dollars” short of where it needs to be.
He said that his economic advisors, including Former Federal Reserve Chair Janet Yellen, have warned him that the state will likely not see a “V-shaped” recovery, or a quick rise, after the Covid-19 crisis ends and its economy reopens.
More than 3.7 million people have filed for unemployment since the beginning of March, according to U.S. Department of Labor. For weeks the state has led the nation in the number of workers filing for unemployment benefits.
California issued the first statewide stay-at-home order on March 19, closing all dine-in restaurants, bars and clubs, gyms and fitness studios.
“The next few years we’re going to have to work through these challenges, but we’ll work through them and we’ll get out the other side,” Newsom said. “But we have our work cut out for us as does the rest of the country.”