Newsom: Expect Slow Economic Recovery From Coronavirus Pandemic's Devastating Financial Impact
SACRAMENTO (CBS SF) -- With stores, businesses and restaurants shuttered and record filings for unemployment, Gov. Gavin Newsom on Wednesday swatted down any hopes that California would quickly rebound from the economic cloud cast over the state by the coronavirus outbreak.
During his daily update, Newsom laid out the numbers of those seeking help from the state after losing their jobs and likened them to the nation's Great Depression.
COMPLETE COVERAGE: CORONAVIRUS PANDEMIC
State revenues have "fallen off a cliff," Newsom said, noting that unemployment claims in California have jumped past the 4 million mark in just seven weeks.
Since mid-March, California has paid out billions in benefits through regular unemployment insurance and the special new pandemic unemployment assistance benefit aimed at self-employed people, independent contractors and gig workers.
"These numbers are juggernauts," Newsom said of the unemployment figures in California and across the country. "It is alarming and I just hope people are preparing themselves not just for the clarity around these numbers, but preparing for the effort that we all need to engage in together to unwind that and get back on our feet."
While the state has gradually begun the process of rolling back the stay-at-home restrictions, Newsom said serious economic damage has already been done. The governor noted there will not be a quick "V-shaped" economic rebound.
"I'm not of the opinion -- nor are my economic advisors, including Janet Yellen, former Fed [Federal Reserve] chair, and my entire team that I would put up against any economic experts and advisers -- that this is a quick V [recovery]," he said. "We are not going to come back in a few months."
Newsom said the daunting math was the same as the country faced in the 1930s.
"It's going to take longer than a lot of people think [to recover]," the governor said. "We have never experienced anything like this in our lifetime. This is depression-era numbers in terms of the unemployment you'll see across this country, not just in the state of California. Just do the math on the number of the unemployed in California filed just since March 12th."
The virus -- which has claimed 2,412 lives in the state and infected 58,815 residents as of Wednesday -- derailed an economy that was rolling at record levels in January.
"We had record low unemployment in my January announcement, record reserves," Newsom said. "We were enjoying another surplus and now you are going to see a budget that comes out that is 10s of billions of dollars short of where it needs to be."
Newsom said state officials have been in conversations with Speaker of the House Nancy Pelosi on what kind of federal aid California may need.
But Newsom said while the task of recovering may be daunting, he had faith that California could pull out of the fiscal tailspin.
"The next few years we are going to have to work through these challenges," he said. "But we'll work through them and we'll get out the other side. Again stronger, more resilient and more capable of meeting challenges head-on in the future, but we have our work cut out for us."
