Oakland County Executive David Coulter gives an update on COVID-19 cases and response, March 21, 2020 at the L. Brooks Patterson Building Conference Center in Waterford. (Photo: Junfu Han, Detroit Free Press)
The COVID-19 pandemic hit Oakland County early and hard, an economist said Monday, and while consumer spending has largely recovered, the number of small businesses open is about 25% below where it was before the coronavirus outbreak.
An annual economic report estimates Oakland County lost about 156,000 jobs in the second quarter of this year, which was nearly the same amount as the county’s job losses over the entire decade of the 2000s.
“We share County Executive (David) Coulter’s assessment that the economy cannot recover completely until the public health situation improves and workers and consumers can go about their daily lives safely,” said Gabriel Ehrlich, director of the University of Michigan Research Seminar in Quantitative Economics (RSQE).
Ehrlich, Coulter and Donald Grimes, senior research area specialist at RSQE, presented Oakland County’s 35th annual economic forecast, which was postponed from May because of the pandemic and given via Zoom.
Oakland County is one of the most populated and wealthiest counties in Michigan.
Ehrlich said getting assistance to the county’s small businesses will be an important step in the county’s recovery.
Coulter said officials hope to help more than 10,000 small businesses, many of which are female-owned, minority-owned and veteran-owned, and that employ more than 65,000 workers in Oakland County.
About $10 million in aid also went to manufacturers to make face masks, face shields and other personal protective equipment needed during the beginning of the pandemic, which has claimed more than 1,100 lives in Oakland County and brought nearly 16,000 confirmed cases, according to the state’s most recent data.
Coulter said the county did not dip into its fund balance to cover these costs thanks to $231 million in federal CARES Act funding and state aid for programs that supported small businesses, nonprofits, residents, communities, cultural institutions and schools in the county.
The economists forecast the county will be down about 68,000 jobs this year, then will recover about 39,000 jobs in 2021 and another 14,000 jobs in 2022. That would leave the county down about 15,000 jobs at the end of 2022 compared with its 2019 level, or about 2%, Ehrlich said.
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“We are forecasting a faster recovery for Oakland County than for the state of Michigan as a whole,” he said.
Ehrlich said the economists predict U.S. real Gross Domestic Product (GDP) to be fully recovered by about the third quarter of 2022. He said they expect GDP to run ahead of employment because they expect higher-wage jobs to recover more quickly than lower-wage jobs.
The economists said the low-wage service sector has been hit harder than blue-collar and high-wage service sectors in Oakland County, which is part of a national trend. They expect blue-collar jobs in the county to “recover completely” over the course of their forecast and a “pretty solid recovery” in the high-wage services sectors, Ehrlich said.
“It’s really the low-wage service sectors, so industries where there’s a lot of face-to-face contact with customers and employees, that we expect to lag in terms of the recovery. And, of course, a lot of that is dictated by the pandemic itself,” he said.
Grimes said many of the low-wage service sector jobs are held by those with less educational attainment, just getting into the workforce and young people.
“As we move forward, I think we have to be cognizant of the fact the pandemic and our forecast of how the recovery is going to unfold will exacerbate inequality issues in Oakland County as well as in the state of Michigan and the nation,” Grimes said. “Just keep that in mind. Recovery is doin’ really well, we’re above trend, but over the longer term we’re gonna have to be cognizant of the fact that it’s not equally distributed.”
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Some of these types of jobs, they said, include small business, such as retail trade and brick-and-mortar stores, as well those in leisure and hospitality. They do expect leisure and hospitality, such as bars, restaurants and hotels — a growing area before the pandemic — to come back once it’s safe.
The economists said the biggest unknown in their forecast is what is going to happen with the pandemic itself.
Coulter said he believes the county’s diverse economy and well-educated labor force will help it recover. He said if the pandemic brought any silver lining, it make some issues more stark.
“It reinforces to me why we can’t be complacent about addressing issues like educational attainment, childhood poverty, housing and the next generation of economic opportunities and leaning into all of those things in Oakland County to make sure that when we do recover from COVID-19 that we continue to be on a solid foundation and footing going forward,” he said.
Contact Christina Hall: [email protected] Follow her on Twitter: @challreporter.
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