Sonoma County’s economic recovery gains strength but delta variant threat looms
What a difference 18 months makes for the Sonoma County economy.
The coronavirus pandemic that struck in March 2020 gave the local economy a whiplash unlike any since the United States entered World War II in 1941. County unemployment soared to a mind-boggling 15.4% the month after the public health crisis took hold, as employers shed tens of thousands of workers.
The only part of the economy that kept a strong pulse during the free fall was the housing market. But it was a double-edged sword.
Office closures prompted technology and other white-collar workers to exit Silicon Valley and the Los Angeles area and flood into Sonoma County to buy cheaper properties for home offices.
The result: In March 2020, the median price of an existing single-family home was $678,910. By June 2021, the median price tag ballooned to an all-time record $825,000.
Middle-class local residents were priced out of the booming housing market, as the gap between the haves and have-nots widened.
Many of the less fortunate, including some who had lost good-paying jobs as the local economy tanked, turned to food banks for sustenance.
After nearly a year of tumult, COVID-19 vaccinations and masks provided prime antidotes for an economic recovery that took hold early in 2021. Since February, the county jobless rate has deflated and remained under 6%. The latest figure in August is 5.3%, the lowest mark since May’s 5.2%, which was the best mark since the pandemic detonated the economy.
“We’ve seen really good recovery momentum in 2021 right into the summer,” Sonoma State University economist Robert Eyler said.
Area employers have hired about 15,000 workers this year through August, 5,300 of them this summer, according to labor market data. That leaves the local workforce of 235,500 people, about 13,500 workers short of its size at the end of 2019.
Since April 2020 at the pandemic’s unemployment peak, county employers have added 31,700 people to their payrolls.
“The economy is roaring back, but some people are still struggling,” said David Goodman, who runs Redwood Empire Food Bank, the largest in Northern California serving Sonoma, Mendocino, Lake, Humboldt and Del Norte counties.
“Not all boats rise during this time.”
With emergency financial benefits from the state and federal government expired and personal debt payments to make, Goodman expects to continue seeing great demand for food. His organization gave away $60 million worth of meals during the first year of the pandemic (from March 2020 to March 2021), double the value of the total giveaway during the same period in the previous year.
Tourism collides with delta variant
When California lifted the remaining public health restrictions in mid-June, Sonoma County, a popular summer destination for in-state and other domestic tourists, experienced an early summer bounce in hotel occupancy levels, air travel and eating and drinking at restaurants and brewpubs.
However, the pandemic disease hung around for the summer excitement, and boldly staged a resurgence of infections, hospitalizations and deaths — thanks to the powerful delta variant of COVID-19. This viral strain remains the No. 1 threat to derail the year’s steady economic expansion.
Although his Santa Rosa manufacturing mini-conglomerate of three companies catering to wineries from Canada to Chile is on track for 10% sales growth in 2021, owner and president Ed Barr has had three employees infected by the coronavirus and as many as 25 of his 35-person workforce exposed to it.
“With vaccinations, we’re in a better place going forward,” Barr said. “But in business and in general, sure I’m concerned there could be disruption” from another variant of the virus or immunization from inoculations weakening protection from infection.
Sonoma County reported 33 more residents died in August from the coronavirus, the second-deadliest month of this year after January, and the fourth-deadliest of the ongoing pandemic.
Pandemic still stokes fear
With 76% of county residents age 12 or older defended by vaccinations against the dreaded infectious disease, the local economic recovery chugs along — trying to avoid a debilitating autumn wildfire. And that’s despite many employers in September again delaying mass returns of white-collar workers to offices a month or even into 2022, waiting and hoping for delta to depart.
Greg McBride, chief financial analyst at Bankrate, a U.S. financial data provider, said Americans continue to view the pandemic as the greatest economic threat over the next six months.
Six of 10 people across the country are concerned about their jobs and incomes taking a hit, he said.