Employment Impact of COVID-19 in Coachella Valley

In the Coachella Valley, the initial projections for job losses from December 2019 to May 2020 are 53,795 which constitutes a decline of 28.7%, according to a newly released study from the Coachella Valley Economic Partnership (CVEP): The Employment Impact of COVID-19 in the Coachella Valley.

This leaves only 133,423 people actively reporting for work or working from home on a daily basis in a region with a permanent population of roughly 463,000, according to the report. The unemployment rate in the Coachella Valley was approximately 7.2% (this includes rural and unincorporated areas of our region) before COVID-19, and is projected to be 31.9% in May of 2020. This projection may exclude many entrepreneurs, small business owners and 1099 contractors not included in numbers from the Bureau of Labor Statistics, who may also have lost their ability to earn a living. There are many such entities in the Coachella Valley.

“The COVID-19 pandemic continues to have dramatic effects on employment nationwide, but particularly among the nine cities, four tribal nations, and numerous unincorporated communities that make up the Coachella Valley,” said Joe Wallace, CEO/Chief Innovation Officer of CVEP.

The employment projections in this report were based on the findings of a study prepared by the Los Angeles County Economic Development Corporation’s (LAEDC) Institute for Applied Economics (IAE). CVEP’s report is available for viewing and download at cvep.com/intelligence.

“Closures, slowdowns, and uncertainty are posing enormous risk to the livelihoods of businesses and employees in the Coachella Valley. Our region stands to be hit harder than most because of our reliance on industries that have been forced to shut down almost completely: tourism and hospitality,” said Laura James, Vice President of Innovation at CVEP.

Employment, or unemployment, is just a fraction of the picture.

The president of the Hayek Institute has projected that 30% of all businesses will not survive the economic disruptions caused by COVID-19. Applying this figure to the Coachella Valley, the region could see the closure of 4,752 businesses as a result of this crisis, according to the report, Because many of the businesses in the Coachella Valley exist to serve the tourism industry it is not unreasonable to expect that the casualty rate among small businesses here will be even higher than state, national and international estimates.

Businesses in the Coachella Valley have missed significant revenue opportunities due to the cancellation of every major sports and entertainment event normally held during this time of year. Beyond the BNP Paribas Tennis Tournament and the Stagecoach and Coachella Music Festivals, other cancelled major events include the White Party in Palm Springs, the ANA Inspiration women’s golf tournament, and The Dinah Shore Weekend.

These cancellations alone have deprived Coachella Valley businesses of roughly $2 billion in revenue1 and caused approximately 600,000 visiting tourists to abort their plans. The bulk of these festivals have been tentatively rescheduled for the fall of 2020.

While rescheduled events seem more encouraging than cancelled ones, there is no guarantee that they will actually be held. Governor Newsom’s criteria of herd immunity AND the availability of a vaccine prior to allowing these types of large events in the state of California certainly jeopardizes the probability of such events occurring anytime in 2020, according to the report.

The disruption of these events, which have become vital to the prosperity of many of the Coachella Valley’s small businesses, is expected to have far-reaching negative effects on employment.

The occupations that provide most of the jobs in the Coachella Valley such as tourism, food services, and retail will absorb losses of from 60% to over 70% of the pre COVID-19 workforce.