Businesses across Northern California closed on Tuesday and residents adjusted to a new reality of remaining in their homes as public-health officials enacted sweeping measures to slow the spread of a virus economists warn will plunge the state into recession.
The “shelter in place” orders that shut down much of the San Francisco Bay Area delivered an abrupt shock to the region – an economic powerhouse of more than seven million residents that is home to Silicon Valley, several major cities, including San Francisco and San Jose, and three international airports. Napa County, the heart of California’s wine industry, announced on Tuesday it would adopt its own “shelter in place” order. Across the country, New York was readying to do the same.
The Bay Area has seen a surge in new instances of COVID-19, the illness caused by the new coronavirus, in recent days with more than 300 identified cases and six deaths. The shelter in place order requires residents to remain in their homes until April 7, leaving only for essential trips such as buying groceries and refilling prescriptions, although public health officials stopped short of the strict mandatory lockdowns in several European countries.
Most businesses were ordered to close, except supermarkets, pharmacies, medical offices, gas stations and other necessary services. Public health officials warned that residents who flouted the rules could be criminally charged, even as they urged people to spend time outdoors to get fresh air.
“We can all expect to experience some cabin fever,” said Matt Willis, health officer for Marin County, north of San Francisco. “You can still walk your dog.”
On Tuesday morning, police cruisers patrolled the streets of suburban San Jose, which were mostly empty except for a handful of residents picking up coffee at the few restaurants that remained open for take-out and delivery orders.
Randy Musterer was working to turn one of his two sit-down restaurants, Sushi Confidential, into a take-out only business. Customers could order at tables set up on the sidewalk so long as they didn’t touch the menus, he said.
A former cancer researcher, Mr. Musterer had disinfectant spray to wipe down pens, credit cards and handheld payment systems. He had laid off most of his staff, but hoped to bring some back if his take-out business proved successful.
Even so, he said he planned to apply for a US$1-million loan to try to keep his restaurants afloat. “We keep hearing about all these stimulus packages, and hopefully it’s not lip service,” he said. “It’s the unknown that’s the scariest. Is this going to last three weeks? Is it going to last three months? Three years?”
Mahassa Oveyssi had just launched a San Jose company staging homes for sale this year when a fire in her building last week destroyed most of her supplies. Now, with much of the region’s economy ground to a halt, clients have started calling to say they would hold off on selling their homes. “I’ve lost all my inventory and I have to pay rent and now I have no business,” said Ms. Oveyssi, a single mother who was also homeschooling her children amid the shutdown. She plans to ask her mortgage company to defer some monthly payments or reduce her interest rate.
Economists at University of California, Los Angeles warned on Monday that the widespread hit to businesses and trade from the coronavirus would almost certainly tip the United States into a recession – with California particularly hard hit. They estimated the state could lose more than 280,000 jobs, pushing the unemployment rate to 6.3 per cent this year, from below 4 per cent last year. “If the pandemic is much worse than assumed, this forecast will be too optimistic,” economists with UCLA’s Anderson School of Management wrote.
California lawmakers scrambled this week to authorize a US$1.1-billion spending package to offset the crushing costs of containing the spread of the coronavirus before voting to close the state legislature until April 13 to respect social distancing requirements. The Trump administration was also preparing to back a federal stimulus package of up to US$1-trillion that would include cash payments to all U.S. households.
The lockdown was just one of several worries for Zhenya Kovalenko, who had taken time off work as an engineer for Walmart to care for her two youngest children after their schools closed down. She was preparing to drive to Denver – 18 hours away – to pick up her 20-year-old daughter, who was stranded at the airport, unable to find a flight home. “What I realize is how unprepared we are as a nation to face a global crisis like this,” Ms. Kovalenko said. “We’re in a dead end right now.”
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