Job losses mount in Sonoma County as economy wilts from coronavirus

As the coronavirus spreads throughout the region, its harmful effects already are ravaging the Sonoma County workforce.

That was evident at Hotel Petaluma as it temporarily closed on Friday because of the paucity of overnight guests, causing general manager Dustin Groff to furlough his 30 workers.

Since room cancellations so far go through April 8, Groff hopes the layoffs are temporary so he can recall his staff. For now, he's helping them file for state unemployment benefits and suggesting they apply for jobs at food delivery services like DoorDash or local supermarkets struggling to keep pace with the panic-buying.

“That's the hardest part of the job having my staff not knowing what comes next,” Groff said.

Besides Hotel Petaluma, the Harmon Guest House and h2hotel in Healdsburg, along with the Bodega Bay Lodge also suspended operations this week, hoping to ensure survival as local cases of coronavirus spread and most county residents obey local and state orders to mainly stay home for a few weeks.

The concern is that the county's labor market is especially vulnerable, because hotels, restaurants, wine tasting rooms and brewpubs comprise a significant part, and they are the first sector here and nationwide quickly shedding workers as daily life and most commerce came to a halt to help tamp down the spread of COVID-19.

New individual filings for unemployment benefits as of March 14 shot up 43% with 58,200 initial claims in California, and there was a 33% jump nationwide with 281,000 claims, the U.S. Department of Labor said Thursday. Economists expects new jobless claims to rocket to at least 1.5 million nationwide for the week ending March 21.

Sonoma County's jobless rate has been hovering just below 3% - 2.9% in January, the latest figures available - a 50-year low. County unemployment data for February will be released next Friday. As the pandemic continues wreaking havoc, economists say a worst-case scenario for the U.S. jobless rate in March could be 20%. That's a startling unemployment level not seen since the Great Depression in 1929. The local jobless rate has been running close to a percentage point lower than the national number, but that's not much consolation as employers, particularly in the service sector, scramble to try to stay in business. What's unfolding here is a dramatic reversal from full employment to a deluge of layoffs, leading to a rush for unemployment benefits.

Businesses feel squeeze

A free fall of job losses started after Gov. Gavin Newsom on Sunday called for the closure of North Coast wine tasting rooms, beer taprooms and bars. The action was an immediate jolt to Sonoma County's signature wine industry, which supports 54,000 jobs paying $3.2 billion a year in workers' wages. The county is home to 425 wineries, with an estimated 300 tasting rooms. Wine and beer production continues with fewer workers, and some local craft beer purveyors are selling beer to go.

The grim local economic fallout deepened Wednesday, the first day of a three-week public health mandate from the county's top public health official to shelter in place other than running essential errands.

Congress is trying to ram through a $1 trillion aid package with $500 billion of cash payments overall to most taxpayers in individual cuts of $1,000 or more, expanded unemployment benefits and $300 billion to help small businesses stem the tide of mounting layoffs.

Robert Eyler, a Sonoma State University economics professor, said tourism-related and retail jobs make up 25% of the county workforce. He estimated if those two pieces of the service sector cleave 75% of their workers from ill effects of the pandemic, the unemployment rate in Sonoma County could spike to 18%. If job losses pile up in other businesses, the local joblessness could be even greater than that staggering level.

“You have a lot of lower-wage workers in those jobs that may not have the wealth or the employer backing with benefits to bridge the gap to get back to ... where we were,” Eyler said.

Industry hit hard

A good many of them work in the hospitality sector. The occupancy rate at standalone hotels in Sonoma County for the week ending March 14 declined 25% from the same time last year, according to the latest report from travel data firm STR. The hotel industry in California has lost or is projected to lose nearly half of the 285,122 jobs as travel dries up as a result of the coronavirus, according to the American Hotel & Lodging Association.

Still working is Ofelian Cardenas, a housekeeper at the Hyatt Regency Sonoma Wine Country, which was still open as of Friday. She has had her hours reduced, though, and doesn't know what the future holds. She earns $14.80 an hour with medical benefits, after 16 years at the Santa Rosa hotel.

If she gets furloughed, Cardenas, 50, said she worries about being able to pay the mortgage on the home she shares with her 21-year-old daughter and cover basic necessities. She hasn't received any guarantees from Hyatt about the company paying her and continuing her health benefits should she get laid off. Hyatt did not reply to a request for comment.

Cardenas does have some paid sick days remaining and otherwise would have to seek state unemployment benefits, ranging from $40 to $450 a week.

Through a Spanish translator, she said, “All of my coworkers are fearful of losing our jobs.”

Helping employees

When Graton Resort and Casino closed this week, Andrew Esch, who oversees the 3,400 slot machines on the overnight shift, was furloughed. To cushion the blow, casino owner Federated Indians of Graton Rancheria, will pick up his and the other employees' wages and medical coverage. Plus, he's grateful the tribe also will keep paying his average gratuities pooled among the workers. While he makes a base wage of $15.80 per hour, the tips on a good night can equal $30 to $35 an hour more.

“Everyone I talked to is almost blown away that they are covering our tips as well,” said Esch, 27. “I'm very thankful that my employer has the means to do this. ... It's one of those situations where if you treat your employees right, they want to come back to work.”

As he turned out the lights Tuesday night at his Rialto Cinemas in Sebastopol, owner Ky Boyd said the most heartbreaking thing was having to let go about 20 employees.

“The staff is like family,” Boyd said of the theater, a community hub in the small town of almost 8,000. “Tons of people are going to be out of work ... and $1,000 per worker (from the federal government) isn't going to cut it” with the county's high cost of living.

Still, Boyd remains optimistic and the theater's marquee reads: “We're having an intermission. Theatre temporarily closed due to COVID-19 emergency. We will be back. Be well. Be safe.”

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.