Millions Of SoCal Jobs At Risk, Economic Analysts Warn

LOS ANGELES, CA — Though stark, the latest unemployment figures don't capture the economic pain looming over Southern California for the next two years, according to two new reports. The outlook for 2021 is dire with millions more jobs vulnerable during the pandemic, it was reported Friday.

Consultants at McKinsey & Co., who have been exploring the repercussions of the COVID-19 pandemic on jobs and economies globally, conducted an analysis this week focused on Los Angeles, Orange and San Diego counties, according to the Los Angeles Times. They analyzed the effects of the pandemic — the social-distancing requirements and the reduced demand — concluding that in Los Angeles County alone, 1.8 million jobs are "vulnerable." Across Los Angeles, Imperial, Orange, Riverside, San Bernardino and Ventura counties, the The Southern California Association of Governments is projecting 20% unemployment this year and unemployment above 12% in 2021. The job losses disproportionally affect low-wage workers and minority communities.

"The jobs at risk are larger than the current number of people reported as having claimed unemployment benefits," said Tim Ward, managing partner of McKinsey's Southern California office. Add in several other counties, and close to 4 million jobs are vulnerable across the region, the firm's analysis found.

About 40% of LA County workers face a threat of losing their jobs whole or of being placed on unpaid leave, wages cuts or reduced hours. So far, an estimated 1 million residents have filed for unemployment.

Depending on how effectively the coronavirus is contained, the jobs at risk in Los Angeles, Orange and San Diego counties could account for nearly 50% of food services employment, 41% of arts and entertainment jobs and 17% of retail employment.

The worst effects could be felt in the Latino community, where McKinsey determined that 46% of all jobs are vulnerable to COVID-19.

The Southern California Association of Governments concluded in a report last week that the economic pain is just beginning. The government planning agency projected that Southern California's unemployment rate would still exceed 12% next year. The agency projected that Imperial County, where residents already experience some of the state's highest poverty levels, will see unemployment of 26% in 2021, up from 18% last year. Los Angeles County, by contrast, is pegged for a 12% jobless rate in 2021.

"Even with some uncertainty over how all of this will play out, our analysis suggests that the pandemic's economic impacts will be severe and long lasting. Understanding this now, and identifying which sectors will be hardest hit, allows us to better plan for the recovery," said SCAG president Bill Jahn, according to The Times.

City News Service and Patch Staffer Paige Austin contributed to this report.