As the economy takes a hit, the gap between the haves and have-nots gets wider.
Sara Rubin here, $600 richer today than I was at the beginning of this week. That’s thanks to stimulus package 2.0, which has benefited people like me with direct cash aid—despite the fact that I am gratefully still employed, 10 months into the pandemic and related closures. I find myself in the strange position of saving more money than I used to, because there are fewer available services to spend it on; there’s takeout but no meals out or beers with a friend, I am desperately in need of a haircut and a massage, and I canceled a few planned trips this year.
It’s one of the odd paradoxes of this time in which it feels like the economy, both nationally and locally, is falling apart. In many ways, it is—but for people who have the privileges I do, that pain is going to be less acute. It’s a moment in which the gap between the haves and have-nots is growing wider and wider. (For a detailed explainer on how and why, check out this New York Times analysis of data from the U.S. Bureau of Economic Analysis.)
For this week’s cover story, I set out to create an economic report card for how Monterey County fared in 2020. It’s not a straightforward task, as I quickly learned; there is no data point that serves as a good proxy for economic impact, the federal aid from the CARES Act is still circulating, and there’s no comprehensive list of how many businesses have closed permanently. Things are changing so fast that as the Weekly went to print, I learned of a new round of layoffs at the Monterey Bay Aquarium, an institution central to the region’s hospitality industry, bringing its total workforce reduction to 40 percent since March.
But even as employment has rebounded in general—although the most recent data predates the December stay-at-home orders—Monterey County Workforce Development Board Executive Director Chris Donnelly noted that not all jobs are created equal. “There’s a large demand for people to work. Fast food places like McDonald’s and grocery stores are where a lot of the hiring is taking place,” he told me. “Large businesses have enough money in reserves. Here, it’s mostly small mom-and-pops that are closing.”
Dan Baldwin, president/CEO of the Community Foundation for Monterey County, describes the widening disparity too. “[The pandemic] has brazenly exposed what we’ve always known,” he says. “The people we think of as being economically vulnerable truly are, and the people that we think of as being economically advantaged really are. There is a big part in the middle, and that is small business owners. We are going to see a lot of restaurants close, a lot of small businesses close, commercial landlords that are going to have tenants who can’t pay.”
I asked Carmen Herrera-Masir, executive director of El Pajaro Community Development Corporation, if she could estimate how many small Latino-owned businesses the nonprofit serves might close for good. She can’t—there’s no crystal ball, she says, a common refrain when asking for economic forecasts—but El Pajaro CDC is about to embark on a survey of all the business owners it has served in two years to ask how they’re doing.
For now, it’s a mixed bag; one auto mechanic told Herrera-Masir he is busier than ever, while people save by repairing their cars instead of buying new. But hairdressers who were closed for months, then reopened under strict guidelines then closed again are struggling.
“The reality is that the businesses that we serve have been hit the hardest because they’re at a disadvantage,” Herrera-Masir says. “We are seeing a lot of resilience, also—some are small and they are able to figure it out.”
Here’s to hoping many small, local businesses have enough resilience to get through. Because at some point, on the other end of this, when we rebuild our local economy we’re going to want mom-and-pops—and those of us who have been saving up are going to have to help them get back on track.
-Sara Rubin, editor, email@example.com