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Economic implications for LA County
LAEDC Institute for Applied Economics offers analysis and recommendations

We’re stuck at home – Let’s gain skills, new certificates!
Perfect time for online education, to raise your earnings potential — Here’s what to study

Economic update and remarks from Bill Allen, CEO of LAEDC
3/18/20 LAEDC Board of Governor’s Meeting

Economic implications for LA County

LAEDC Institute for Applied Economics offers analysis and recommendations

March 17, 2020

Dear members, partners and friends:

In the context of the health, economic and social upheaval catalyzed by COVID-19 (colloquially the “coronavirus”), we thought it valuable to outline the collective thinking of the LAEDC’s Institute for Applied Economics (IAE) regarding the recent and potential economic impacts of the virus in relation to the public and private responses, which will result in alternative scenarios to combat, contend with and mitigate the virus’s spread with varying effects on the global, national and local economies.

Across the country, large events from business conventions to sporting events to music festivals have been postponed. Though not yet cancelled or postponed, many have called for the 2020 Tokyo Olympic Games to reconsider their July 24th start date. Many school districts across the nation have also closed, and hundreds of universities have moved classes entirely online. Many who are able have made the move into telework; however, many service workers find themselves stuck at home without the guarantee of pay. Though difficult to quantify now, many longer-term economic impacts will, of course, be contingent on the steps governments and companies take to ease, if not quell, the effects of this global health crisis.

Maintaining supply chains, especially for food and medical supplies, will be critical to maintaining both the public welfare and, ultimately, public order. Hoarding of basic goods has been prevalent due to public anxiety related to the fast spreading virus and the number of “unknown” carriers despite messages from government and industry attesting to the stable supply of essential consumer goods, especially food supplies.

To address hoarding and thus short-term shortages of essential goods, affected businesses and governments should strive to more regularly and transparently inform consumers about the availability of goods to ease panic and prevent the distortionary accumulation of household goods, which inimically impacts those without the means to stockpile and/or pay a premium for the same goods. In the case of essential medical goods, such as masks and sanitizers, wholesalers should prioritize hospitals and health care providers over retailers, and price gouging health care providers should be subject to legal penalty. Given that many workers will be working from home, sheltering in place and possibly even self-quarantining , retailers should encourage and quickly scale, if possible, their home delivery services – if need be using various third-party “last mile” delivery services, such as Uber, Shipsi and Postmates.

IAE believes the following economic policy measures may also be beneficial:

The federal government and state governments should consider:

  • Emergency transfers, such as a temporary / short-term universal basic income (UBI) program;
  • A moratorium on rent and mortgage payments, by simply moving the months of missed mortgage payments to the end of the mortgage;
  • A temporary suspension of evictions and foreclosures;
  • Programs and policies to encourage and promote mortgage refinancing in a historically low interest environment;
  • Easy access to social insurance and disability payments;
  • Subsidized paid sick leave, including for contract and informal (including “gig”) economy workers, when businesses are unable to do so;
  • Freeing undocumented workers from the fear of deportation during this pandemic if we’re going to truly flatten the contagion rate;
  • Insurers should be encouraged, if not mandated, to fully cover COVID-19 testing and treatment; and
  • Where possible, uncollateralized or minimally collateralized low or zero interest loans should be made available to vulnerable businesses, such as recently announced and launched Small Business Administration emergency loan program.


Local Implications

Looking only at Los Angeles County,

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several different populations will be specifically vulnerable. From a health perspective, close to 1.4 million of the county’s 10.2 million residents are 65 years and older, and another 574,000 are between the ages of 60 and 64 years. In terms of workers, over 258,000 of the county’s 4.5 million workers are 65 years and older, and another 330,000 are between 60 and 64 years. So far, those of more advanced age have been most affected by COVID-19, especially those with existing health conditions.

Governors and mayors across the country have advised or ordered the closure of public venues such as bars, restaurants, theaters and gyms. Los Angeles Mayor Eric Garcetti ordered all public venues within the city to close to the public, and all food establishments may only operate for delivery or takeout. Economically, vulnerable industries, such as accommodation and food service (450,000 jobs in 3Q:2019), retail trade (410,000 jobs), and arts and entertainment (98,000 jobs) make up a significant portion of LA County’s employment base; indeed, together these industries in LA County employ almost one million individuals.

The impact to entertainment and leisure activities will be substantial. Our many local theaters and music venues of all sizes have temporarily suspended operations.  There is a large professional sports presence in the Los Angeles Basin (L.A. and Orange counties), valued at $6.2 billion annually, which will be impacted by the measures being taken. The National Basketball Association (NBA) has suspended play indefinitely, and Major League Baseball (MLB) has cancelled the remainder of spring training and postponed the start of the regular season. The National Collegiate Athletic Association (NCAA) has cancelled the 2020 Division I Men’s and Women’s championship tournaments (aka “March Madness”), and the National Hockey League (NHL) has suspended its season. With music festival season just around the corner, here in Southern California, Coachella and Stagecoach have been postponed until the fall. Airlines, hotels, cruise lines and other tourism-dependent industries are feeling the impact of the evaporation of business- and leisure-related travel. This mass social sequestering is taking place over “spring break”, and questions remain as to whether travel will recover in time for the summer surge that takes place beginning in May and June after the end of the school year and graduations.

Throughput at the ports of Los Angeles and Long Beach, which combined represent the 9th largest port complex in the world in terms of container traffic, has been severely impacted, as the number of ships coming in from our Trans-Pacific trading partners has dropped precipitously due to the global health crisis. Cargo volumes at the Port of Los Angeles dropped by just under 23 percent for the month of February (year-over-year) with expectations that the decline will continue, if not accelerate, in March. The Port of Long Beach saw their trade volumes decline as well, with last month’s cargo volumes falling close to 10 percent below that of February 2018. Soft cargo volumes present challenges for U.S. exports, as containers destined for overseas linger with fewer ship sailings. This will have ripple effects felt across the region’s trade and logistics industry, an industry valued at over $1.5 trillion annually in the Southern California five-county region (Los Angeles, Orange, Riverside, San Bernardino and Ventura counties). We anticipate a possible surge in cargo volume once the virus is contained and production levels ramp back up.

While throughput is down at the ports, affecting many trade and logistics-related businesses and workers, one employment bright spot originating from the increased activity in e-commerce and panic buying taking place at grocery stores and markets is that it has boosted demand for grocery store workers, warehouse workers and delivery drivers. Amazon just announced that they plan to hire over 100,000 new workers nationwide in their fulfillment centers and delivery network to meet the surge in demand, in addition to offering a $2-per-hour wage increase, on top of their $15-per-hour wage, that will last through the end of April. This may provide some relief for displaced workers in other service industries that are facing closures.

Another of our key industries here in the Los Angeles region, the motion picture and television production industry, is taking proactive steps to mitigate the impact of this crisis related to their in-theater box office releases. Universal announced a number of their theatrical productions will be released early or straight to digital, while people are hunkering down in their homes. Several upcoming major releases have been delayed, including the next James Bond film. We expect other film and television content producers to follow suit, stepping up releases of content on streaming platforms as a means to mitigate potential losses related to the effects of social distancing and self-isolating, as well as in response to an increasing number of executive orders mandating movie theater closures.

In terms of the most immediate economic urgency, we cite two: the ability to maintain supply chains and to ensure households, especially those now without a steady income, have the necessary liquidity to stay afloat. Especially for service workers, particularly food service, hospitality and home care workers, who cannot work remotely, most tax breaks will be of little value in the immediate-term, as many of these households do not possess emergency funds let alone savings; they will require immediate assistance measures. Restaurants should consider offering temporary delivery jobs to waitstaff who cannot work due to prohibitions on in-dining on premises.   Businesses also face liquidity issues and will likely scale back on certain forms of investing, such as office and commercial properties, in favor of information technology hardware to enable both business continuity and secure remote work. If a high-percentage of LA County’s hundreds of thousands of business establishments cannot weather this disruption, the jobs they once provided will no longer be available at a time where individuals will need them most to recover from financial hardships the disruption has caused in their households.

It is unclear how changed behavior as a result of COVID-19, especially telework, will impact productivity. There are arguments in both directions, since the elimination of commutes will allow for more “productive” time. For some, however, competing concerns, especially for children or for household members who are or may become ill, could negatively impact productivity. It is also unclear how prepared the national cloud storage and computing infrastructure is for this mass exodus from localized information technology (IT) infrastructure to cloud-based infrastructure. One silver lining will be the reduction in fuel and thus greenhouse gas and other noxious emissions from passenger vehicles commuting back and forth to their place of work.

Over longer-term, the behavioral changes catalyzed by COVID-19 may spur economic transitions already under way. Brick-and-mortar retail, already vulnerable, will incur an additional hit by what will likely be near-universal reliance on e-commerce and home delivery as workers move into telework and leisure is forced to be home-based over this period. Telework could also become a more permanent fixture of work, and firms may well increase their embrace of telecommunications and distributed work forces as a cheaper alternative to formal workspaces and expensive real estate in central business districts. Depending on the length of the crisis, the movement to online education, including certificate, career technical, and two- and four-year coursework, might also result in structural changes within the educational system as well. Households with more disposable income, forced to save on leisure by social distancing and quarantines, may find themselves sitting on reserves of cash and pent-up demand when the global health crisis abates. Once the virus plateaus and the restrictions on movement are lifted, we expect a rash of consumer spending, which is currently three-quarters of the macro-economy, especially on travel and food away from home. Keep in mind, it is also possible that households might reevaluate risk preferences, especially as it relates to travel; though if the past is prologue, the travel industry did recover fairly quickly after 9/11.

Much remains uncertain as the saga of this disease unfolds for our local communities, our state and our country. However, robust responses from governments and businesses, and basic human solidarity, will help us weather this storm to reach the calmer shores on the other side.

Stay well,

The LAEDC Institute for Applied Economics

We’re stuck at home – Let’s gain skills, new certificates!

Perfect time for online education, to raise your earnings potential — Here’s what to study

March 22, 2020

by Lawren Markle, Senior Communications Director, LAEDC

With many of us home, we have an unprecedented opportunity to develop new talents and skills that can move us along a career pathway  and access higher earnings potential.  More and more online education is available, to teach an almost limitless set of new skills.  By setting goals and committing to get something accomplished during this lockdown, you, your team or your family members can gain a stronger footing for success and better income.  It just requires action.  This article will help you get started.

One source for these online courses is the California Community College system, which has 19 colleges in LA County basin.

To help people find great career pathways through community college, Center for a Competitive Workforce (CCW) has spent the past two years analyzing which middle-skill occupations are likely to hire the most people, and those occupations can be sorted by wage or total openings. These are occupations accessible to people with more than a high school education but less than a college degree.  In other words, by choosing some appropriate online courses, you will start moving towards a certificate or two-year degree that will put you on a career pathway.  All the community colleges in the LA Basin can be found on this page.  LAEDC is a partner in CCW, and works to bring employers to the table with the 19 colleges, to help the colleges adapt programs to teach the skills that employers need.

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There may be job openings right now for some of the occupations that interest you, and if not, moving through coursework will position you to access opportunities as the nation gets back to normal after the emergency has subsided.

In addition to community colleges, many institutions are offering free content (e.g. museums, orchestras, and much more) and there are a variety of other online educations options, depending on your professional level and prior education.

LAEDC also offers the following additional information below, although we do not have the research time to evaluate all these links and readers are asked to check whether these links meet their needs.

Some four year college courses are also making courses available free while campuses are closed, such as at this link:

For kids and teenagers,

Scholastic Learn At Home has opened up some free access to daily learning journeys divided into four grade spans—Pre-K–K, Grades 1–2, Grades 3–5, and Grades 6–9+, covering ELA, STEM, Science, Social Studies, and Social-Emotional Learning.  To learn more and to access Scholastic Learn At Home, visit:  The PBS Kids video app is also available on mobile, tablet and connected TV devices, and offers on-demand educational videos and a livestream of PBS Kids 24/7, with no subscription required. Plus, the PBS Kids Games app includes nearly 200 educational games that can be downloaded to play offline.  Here’s an article that links to many more kids educational options that are free during the school closures :

 Explore other online education opportunities.  Let’s do something with this at-home time that will pay dividends!

Bill Allen, CEO, LAEDC

Economic update and remarks from 3/18/20 LAEDC Board of Governor’s Meeting

LAEDC CEO Bill Allen COVID-19 Response report at LAEDC Board of Governors March 18, 2020 meeting

Good morning, everyone! Welcome to our first ever Socially Distanced LAEDC Board of Governors meeting by Zoom Conference!

We understand that you and your organizations are all navigating significant challenges these days so we appreciate your time this morning and your continuing commitment to the LAEDC and our mission to advance economic opportunity and prosperity for all.

I’m going to take a few minutes to share some updates on where we are at the LAEDC and where we’re headed with respect to the Global COVID-19 pandemic, but I also invite you to share with us what you are experiencing in your organizations and your communities, how we can be of service to you,  as we mobilize to address this crisis. Historically our members have been very helpful to us in the delivery of solutions to help our clients and communities through times of crisis. [LAEDC members who can offer resources to support LAEDC’s mission, please email Shane Cullen]

Please remember that the LAEDC, as the region’s primary economic development leadership and service organization, is uniquely positioned to help our region’s 10 million residents and hundreds of thousands of businesses navigate the increasingly rough waters of this storm.   We have helped this region survive and recover from the 1994 Northridge earthquake, the bursting of the dotcom bubble in 2000, the aftermath of 9/11, and the Great Recession which stemmed from the 2009 Financial Crisis, and we will help this region survive and recover from this crisis as well.

In fact, I and many of my colleagues on the LAEDC team worked those prior crises as economic development professionals. Our team understands the needs of employers, especially small businesses during times of serious financial distress and disruption, and you can count on LAEDC to be an effective leader, service provider and advocacy voice as we help our communities weather this crisis and position our region for recovery.

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We have a team of professionals on the LAEDC staff with more than a hundred combined years of experience helping businesses avoid layoffs and recover from financial crises. We created and pioneered our award-winning and highly effective Layoff Aversion program during the Great Recession, and we have the knowledge and experience from those days that will enable us to provide guidance to our leaders and be a very effective partner to employers today. In fact, LA City Mayor Eric Garcetti is publicly promoting our Layoff Aversion program as part of the city’s list of recommended resources to help our local businesses survive this rapidly evolving health and economic crisis.

We are stronger as an organization today than ever before, particularly as we have more members and partners like you supporting our work. But frankly we are all going to need to pull together and ensure we have the necessary financial resources ourselves in the weeks and months ahead as we work to reduce the impact of the virus on our residents and our employers, particularly to reduce the amount of people who are left without a job or income. Daunting as this all seems, given the size of our market and the degree of economic dislocation taking place already, we have several new tools to employ in this fight which I’ll briefly highlight this morning.

But first let me briefly update where we find ourselves today with respect to the Novel Coronavirus.

First, I want to compliment our federal, state and local governments including our county, our local cities and their public health agencies as well as the CDC, for the heroic work they are doing to help us slow the spread of this terrible virus.

The latest figures are daunting. LA County yesterday confirmed the existence of 50 new coronavirus cases in the county bringing our current total to 144.

The rate of new confirmed cases is rising exponentially as more testing kits arrive and are put in service, and the real number of cases actually present in LA may already be in the many hundreds, if not the thousands.

That may not seem like a lot in a county with ten million residents, but it is where Italy was only a little more than 2 weeks ago and they now have over 31,500 confirmed cases and have lost 2,500 lives to the virus.

And the LA County Public Health Department indicates we have only 152 of our county’s 2,200 ICU beds even available in our hospitals right now so we must act quickly to stem the growing transmission of these cases spreading throughout our county, especially to our most vulnerable residents, those over 65 and with underlying health conditions.

California now has more than 700 confirmed cases and, due to the still increasing rate of spread across our state, Governor Newsom is enacting a series of ever more restrictive Social Distancing measures, and he acknowledged last night that California schools may need to remain closed for the rest of the school year.

The number of confirmed cases across the United States has risen to more than 6,500 this morning as global cases now exceed 200,000 and cases are now present in all 50 US states.

That’s why you hear America’s leading infectious disease expert Dr. Anthony Fauci saying we may need a national lockdown for a few weeks to slow down the rate of transmission of the virus.

Six Bay Area Counties and Orange County have already issued Shelter in Place orders and its certainly possible that LA County may follow their lead given that Orange County made this decision when they reached only 29 confirmed cases and we already have 144 in LA County. New York is considering a similar order which may be issued later this week.

So, one of our asks of you our members is to please follow the orders and guidelines our public health agencies issue and encourage literally everyone in your sphere of influence to do the same. You can be part of the solution.

The sooner and more completely we institute the recommended Social Distancing measures, the sooner we will flatten the curve of transmission of this pathogen and the fewer of our neighbors who will have to suffer unnecessarily. Though the vast majority of people who contract this virus do recover, the elderly and those with underlying conditions do so at a much lower rate.

Our public officials and health directors are not instituting these measures lightly. I had dinner with the County Public Health Director last Wednesday night along with a small group of other civic leaders including our longtime LAEDC member Tom Priselac, CEO of Cedars Sinai, and the CEO’s of the largest private philanthropic foundations in our county.

Among other things, we advised Dr. Ferrer to be very cautious in developing policies that would create undue economic harm to workers and their employers as we institute measures to reduce the rate of virus transmission. Such advice may have contributed to the resulting orders allowing take-out or delivery-service at restaurants rather than closing them entirely.

We also advised her that government funders need to be flexible in their fee-for-service contracts with non-profits like the LAEDC to allow us to continue to deliver our services online rather than insisting on face to face in-person services (as many such contracts do). At our request last week, the City of LA agreed to allow us to make such shifts in our business assistance programs that are funded by the city.

Turning to the economic implications of this health crisis, our economists in our LAEDC Institute for Applied Economics issued a memo yesterday that we posted to our website discussing the economic implications of COVID-19 for LA County. I encourage all of you to read their letter. It reminds us that we have nearly 1.4 million neighbors here in LA County over the age of 65, the most vulnerable age group for this virus. And it notes that nearly one million of our neighbors work in our accommodation and food service, retail trade and arts and entertainment industries. With our bars, night clubs, on-site dining areas in our restaurants, retail stores, theme parks, arcades, sports arenas, stadiums, convention centers, theatres, and museums all already having been ordered closed here, and our television and film industry cutting back on much of their entertainment production, you can imagine how many hundreds of thousands of folks may likely soon be out of work in LA, possibly more than lost their jobs during the Great Recession.

A survey by NPR and PBS over the weekend found that 18% of U.S. adults surveyed reported they have already been laid off or had their work hours cut as a result of efforts to slow the spread of the virus. I have many friends and family members for whom this is already true and I imagine you do as well. The proportional impact grows for lower income households with 25% of those earning less than $50,000 a year reporting they had been laid off or had their hours reduced.

Many businesses have allowed or directed their employees to work from home to reduce their exposure to the virus but many jobs, particularly blue collar and service or retail jobs, cannot be done remotely so the folks who hold those jobs are more likely to be laid off.

This is why Congress, the Federal Reserve and the President’s Administration are working so diligently to develop a series of measures to mitigate the impact of the unfolding economic crisis including a process whereby replacement income can be distributed to all Americans below certain yet to be determined income levels to help them survive financially through the unfolding crisis.

That is also why our state and local government leaders have instituted moratoriums on residential (and in some cases even commercial) evictions, foreclosures, utility shutoffs, etc. The vast majority of low income families and families of color have little to no personal savings to fall back on if they lose their jobs, and it appears that large numbers of them are already doing so, so we must protect them from eviction and foreclosure and replace their lost incomes as fast as possible.

We also know that small businesses are by and large very thinly capitalized and those owned by low income folks and people of color are the most thinly capitalized of all.

Hence, we are encouraged to see that US Small Business Administration Disaster Loans of up to $2 million are now available for application by LA County employers affected by the virus. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the impact of this health-related disaster.

We advocated for this all last week with our state and local partners because our California counties and state government had to go through a process to enable our local businesses to qualify to apply for these low interest loans.

And from the moment the program was approved here this week, we have been promoting it to area businesses and posting links on our website. We also successfully advocated for a change in SBA rules that would have otherwise required face to face in-person interviews with loan applicants. That can now be done online.

California’s I-Bank also has low interest and state-guaranteed business loans and microloans available for small business borrowers who have been impacted by disasters.

And the state is also offering creative programs such as the Work Sharing Program administered by the state’s Employment Development Department which helps employers minimize or eliminate the need for layoffs by helping employees whose hours or wages have been reduced to receive unemployment insurance benefits while still marginally attached to their employers.

And yesterday the City of LA announced a new $11 million no-fee microloan program to quickly get up to $20,000 in cash to small businesses and microenterprises in the city to help them with bills including payroll for low income job retention.

All of these programs and more are detailed on our regularly updated COVID-19 Resource page which can be found at

We are also engaged in advocacy to help our state, county and city officials develop and refine other programs and resources for affected businesses and workers. And LAEDC has even issued a letter of support for House Resolution 6040 to lower the interest rate on the SBA disaster assistance loans to zero interest.

Our staff at the LAEDC are also following and modeling the Social Distancing orders put out by the federal, state and local governments.

As of the end of last week we are fully functional using remote work protocols that we put in place as part of our longtime advocacy for business continuity and resiliency. We did that work originally to prepare our region for a major earthquake or wildfire but now find it extremely relevant and helpful for our own continuity and resiliency in the face of the current Social Distancing orders and what might possibly become an even more restrictive environment based on those established this week in the Bay Area and Orange County or what is being contemplated for New York City.

Our Institute for Applied Economics is working remotely to complete a wide array of industry and labor market research for which we are already under contract, and they are also endeavoring to provide us with insight into the economic implications of this crisis as evidenced in their briefing memo I described earlier this morning.

Our award-winning Business Assistance team, which has helped attract or retain more than 240,000 jobs for area residents over its two-decade history has long worked remotely across the county to be closer to businesses in need.

Their Layoff Aversion Program is in full swing and as I mentioned we have just last week negotiated the ability with our government funders to continue this program virtually with business owners by phone or teleconference rather than in person at their business locations since many of their facilities are, or will soon be, closed and few if any of them will be allowed to have visitors on site even if they are still operational.

Our Layoff Aversion clients are desperate for help to avoid laying off their employees, but if they end up having to conduct layoffs they want to connect those affected employees to the available federal, state or local relief resources for workers, which we have also detailed on our website and in emails we are sending to area businesses.

If any of you (our members) have financing, or other programs or services, or referrals to other resources to offer struggling employers and workers throughout our communities we wholeheartedly encourage you to contact us, so we can help you make those resources available to the folks who need them the most.

In the months ahead, we look forward to being able to move our local employers from survival mode to recovery mode and we think a valuable part of that strategy will be a scale up of our California Smart Match program, which already connects regional suppliers to regional OEMs, to build out local supply chains to mitigate disruptions while positioning our local companies – especially minority and women-owned companies – for increased business and more local hiring. This will be ever more valuable as companies seek to alter, augment and diversify their supply chains in response to this crisis. We invite you to contact our Senior Director of Industry Cluster Development Judy Kruger to learn more about that program.

And as global markets eventually recover in the months ahead, our World Trade Center LA (and our LAEDC subtenants from the US Department of Commerce Export Assistance Center and the US SBA) stand ready to continue their work together with us as always to help our region’s companies access foreign markets for their goods and services.

Some of our industries and companies are being dramatically impacted in ways that may have lasting impacts on their business models, which may in turn necessitate adjustments in the curriculum developed and offered by our higher education and workforce development system partners and again your LAEDC is well positioned to assist in such transitions as a result of our deep and meaningful partnerships with all of our region’s community colleges, CSU campuses, other four year colleges and universities and our workforce development system colleagues.

We will be regularly updating on our website at what we know about the crisis and available resources, whether from the LAEDC or our key partners, and we sincerely encourage all of you to check there regularly for information and links to those resources.

And please help direct your contacts and clients there as well since the LAEDC is a trusted informational conduit in this region, and our site is a rare and robust clearinghouse of such information targeted to employers and workers in our communities.

I want to close my update this morning by saying that as dark and stormy as our economic skies may seem these days, I am absolutely confident that, if we work together, we will navigate our way successfully through this storm and reach the sunshine again.

Bill Allen, CEO, LAEDC

Please support LAEDC’s mission

In this time of such critical need across the communities we serve, LAEDC depends more than ever on the support of our members and donors, enabling our dedicated staff to deliver the programs, multilingual small business assistance, actionable intelligence and economic leadership to help our region navigate through this crisis and set the stage for our eventual economic recovery. Please contact Shane Cullen at [email protected]

LAEDC is a public-benefit nonprofit collectively advancing opportunity and prosperity for all