Advancing San Diego Intern Spotlight: Paul Krupski, Perspectium

The Advancing San Diego (ASD) Internship Program launched this Spring in a remote-capacity amid the COVID-19 pandemic and aims to provide up to 100 San Diego-based companies with fully subsidized interns. This program targets small businesses with 100 employees or less, which comprise 98 percent of all businesses in San Diego, employ nearly two thirds of San Diegans, and account for 70 percent of job growth. A key issue for these companies has been a lack of time and resources to recruit the skilled talent necessary to continue their growth.

As students close out their Summer internship experiences, EDC has launched this blog series to highlight the innovative local companies that comprise the first cohort of the program, and the interns they hosted.

In this feature, we sat down with Paul Krupski, ASD software intern at Perspectium. A part of the inaugural cohort of host companies, San Diego-based, minority-owned SaaS company Perspectium was founded in 2013 by David Loo, the founding developer of ServiceNow. The company now also has offices in San Jose, New York, and London.

Paul, start by telling us a little about yourself.

I transferred from Oceanside-based MiraCosta Community College to Brown University where I’ll be finishing my degree in computer science with a focus in artificial intelligence and a minor in finance. In the professional world, I hope to work in the fintech sector applying the latest technologies to the financial industry. Interning at Perspectium gave me a firsthand look at how third party tech companies can offer SaaS to companies of all industries, saving them time and money by handling their informational needs. I hope to take what I’ve learned through this internship and use it towards my future of applying computer science to finance.

How has your experience in the ASD Internship Program been, and what projects/assignments have been the most meaningful?

I have had a very positive experience while participating in the ASD Internship Program. The most meaningful projects that I completed while working at Perspectium were instances where I would be directly interacting with several data bases to send and receive information from a web application.

How has the COVID-19 pandemic affected your day-to-day, and what challenges have you faced as a student?

COVID-19 has affected my routine as a student by causing my semester at Brown to be completely online. Although this has been a challenge, I’ve been fortunate in that it has not hindered my ability to plan my academic goals and advance forward to my future career.

What advice would you give to high school students looking for a successful career in the local software industry?

Be an active learner both in computer science and professional etiquette. Be sure to research and practice for the interviewing process.

Get in touch with Perspectium:

Learn more about the Advancing San Diego Internship Program

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Advancing San Diego Company Spotlight: Family Proud

The Advancing San Diego (ASD) Internship Program launched this Spring in a remote-capacity amid the COVID-19 pandemic and aims to provide up to 100 San Diego-based companies with fully subsidized interns. This program targets companies with 100 employees or less, which comprise 98 percent of all businesses in San Diego, employ nearly two thirds of San Diegans, and account for 70 percent of job growth. A key issue for these companies has been a lack of time and resources to recruit the skilled talent necessary to continue their growth.

As students close out their Summer internship experiences, EDC has launched this blog series to highlight the innovative local companies that comprise the first cohort of the program, and the interns they hosted.

In this feature, we sat down with Jaden Risner, CEO and Co-Founder at Family Proud. A part of the inaugural cohort of host companies, Family Proud is a San Diego-based, Veteran-owned and operated company that provides a care management platform which connects patients and families to a community and resources critical to their care, in a time of need.

The platform is secure and easy-to-use, and allows families to communicate to their support network, receive support through our care registry, and communicate with others in similar situations through our peer network. Family Proud provides a foundation for families to receive support and love, and enhance care for their loved one.

Why was your company founded?  

Family Proud started from a place of love. Our mission has always been to ensure no family need goes unmet and that’s why every day we strive to help as many people as possible with all the love we have to give.

Family Proud is inspired by both co-founders’ personal experiences. I spent 12 years of active duty with the Navy as a helicopter pilot. On one of my deployments, my mother had a heart attack and I was confronted with the struggles of remote care. Several deployments later, my father was diagnosed with cancer. I ended up becoming my mother’s informal caretaker and have personally experienced the burdens of care.

My co-founder Clay was a USMC staff sergeant and was diagnosed with cancer in April 2008. Four months later, after undergoing chemotherapy, Clay’s cancer went into remission. But when his cancer came back a year later, and he was given six months to live, the 13-year Marine Corps veteran set a new goal, the Iron Man. A clinical trial at UC San Diego is ultimately what saved his life, and he went on to compete in the Ironman World Championship triathlon in Hawaii in 2010 shortly after his terminal cancer discharge. Clay committed himself back to patient care, became a patient advocate, and went back to school. Clay is now a healthcare executive and Family Proud’s Chief Strategy Officer.

Tell us about your experience building a small business/startup in San Diego. What resources, services, and/or organizations were most valuable for supporting your Family Proud’s growth?

San Diego has a great startup ecosystem. From academia to events and coworking spaces, Family Proud has been fortunate to lean on the community to support our early growth. The ASD Internship Program is an example of the collaborative support available in San Diego—working together to support innovation, development, and growth for the greater San Diego economy.

Has your company pivoted as a result of COVID-19?  

Although our initial market focus was on the pediatric cancer and Veteran communities within the San Diego region, COVID-19 has opened our service aperture to a far greater audience in need. For example, to broaden our impact, we rolled out our “Digital Care Kit” program—a custom PDF e-package consisting of care registry credit, relevant resources, products, services, lessons learned, and peer connections based on the recipient’s location and adversity. Family Proud vets families in need and connects them with a care kit, which has been sponsored by a generous donor. To request or sponsor a Family Proud Digital Care Kit, please visit our website.

Tell us a little bit about your interns and the value they bring.

As a small business in San Diego, we’ve been fortunate to receive consistent news/opportunities from the City and EDC newsletters. The timing of the launch of the ASD Internship Program happened to coincide with our product development schedule. Our software developer intern, Shaeli, was an amazing addition to the technology team. She brought a fresh, outside-the-box perspective, was resilient and flexible to the new virtual/remote collaborative environment, and always approached her weekly tech sprint challenges with a positive and determined attitude. Family Proud was very lucky to have Shaeli onboard with us this Summer!

Company contact info:

Learn more about Advancing San Diego and our internship program.

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Advancing San Diego Intern Spotlight: Anna Kelley, Tourmaline Wireless

The Advancing San Diego (ASD) Internship Program launched this Spring in a remote-capacity amid the COVID-19 pandemic and aims to provide up to 100 San Diego-based companies with fully subsidized interns. This program targets companies with 100 employees or less, which comprise 98 percent of all businesses in San Diego, employ nearly two thirds of San Diegans, and account for 70 percent of job growth. A key issue for these companies has been a lack of time and resources to recruit the skilled talent necessary to continue their growth.

As students close out their Summer internship experiences, EDC has rolled out this blog series to highlight the innovative local companies that make up the first cohort of the program, and the interns they hosted.

In this feature, we sat down with Anna Kelley, ASD intern at Tourmaline Wireless. A part of the inaugural cohort of host companies, Tourmaline Wireless is building the future of decentralized wireless telecommunications. The Oceanside-based company provides resilient, off-grid solutions based on mesh networks, 4G LTE, and Iridium satellite.

Tell us about yourself.

Hi my name is Anna, and I was a second-year student at San Diego Mesa College when I came across the ASD internship opportunity. I recently transferred to New York University to pursue a Computer and Electrical Engineering degree.

How has your experience in the ASD Internship Program been, and what projects/assignments have been the most meaningful?

The hands-on experience that I obtained while interning at Tourmaline Wireless exceeded all of my expectations. During this internship, I had an opportunity to get hands-on experience with different programming languages and to work on debugging and troubleshooting software defects. Since it was my first internship in the engineering field, I was worried that I was lacking in technical skills. However, my internship supervisor Paul Victorine was so supportive and he made it so easy for me to participate in all the activities during this internship. It was such an amazing learning experience for me and I will continue educating myself in these areas to grow my confidence.

See Paul’s ASD interview here

How has the COVID-19 pandemic affected your day-to-day, and what challenges have you faced as a student?

The most challenging part about being a student during COVID-19 was a transition to online learning because not every class can be fully online. For example, my chemistry lab was replaced with five minutes of YouTube videos and it was not the same experience anymore.

What advice would you give to high school students looking for a successful career in the local software industry?

I would recommend participating in different clubs, programs, and getting an internship as soon as possible. This year I participated in several programs with NASA (L’Space Academy and NCAS, all remote) and it was not only fun, but also a great experience that I can put on my resume.

Visit Tourmaline Wireless on web and Instagram.

Learn more about Advancing San Diego and our internship program.

Economy in crisis: Closer look at August employment report reveals troubling trend

KEY TAKEAWAYS

  • A deep dive into San Diego’s employment report for August reveals a troubling trend.
  • Thousands of workers have fled the labor force since February, which has artificially lowered the unemployment rate and puts San Diego’s economy at risk.

THE SNAG

We’re taking a deeper dive into San Diego’s employment report for August. The region added 20,500 payroll jobs last month as businesses forced to close again in July were allowed to reopen with restrictions in August. Additionally, the unemployment rate fell 2.5 percentage points from 12.4 percent in July to 9.9 percent, which is more than three times the largest downward move in the rate observed before the pandemic. However, a closer look at the record drop in unemployment last month reveals a troubling trend.

In order to be counted as unemployed in the Labor Department’s employment report, workers must still be in the labor force, which is defined as actively seeking employment over the four weeks prior to the survey. This means that the unemployment rate can theoretically drop in a given survey month, even if there were no job gains, if enough workers leave the job market.

Some 16,400 workers exited the labor force in August, the largest single-month exodus in more than six years. Without last month’s contraction in the labor force, the unemployment rate would have stood at 10.8 percent. Widening the temporal aperture a bit, San Diego’s labor force has withered by 36,200 workers since February before the COVID downturn took hold. If those workers had not fled the workforce, August’s unemployment rate would have stood at an even more elevated 11.9 percent in August, two full percentage points above the officially reported 9.9 percent, and would have peaked at 17.6 percent in May, 2.4 percentage points higher than the officially reported rate of 15.2 percent that month.

WHY IT MATTERS

The above creates at least two issues that can have tangible effects on the real economy that span well beyond any technical foibles underpinning the calculation of the unemployment rate:

  1. Workers who drop out of the labor force cannot receive unemployment insurance (UI) benefits. The average weekly UI payout in California is $305.82. Using that figure as a guidepost (UI payout data aren’t readily available at the metro or county levels), the loss in household income conservatively amounts to roughly $20 million dollars each month—or almost a quarter billion dollars per year. And that’s just accounting for the 16,000 or so workers who left in August. Including the roughly 20,000 other discouraged workers who have left since February, that $240 million balloons to nearly $600 million that is no longer reaching households’ wallets—and, therefore, local businesses—in a given year.
  1. Marginally attached workers are significantly less likely to rejoin the labor force as time wears on. The longer that workers remain on the sidelines, the more effectively they can adjust household spending habits and re-examine the trade-offs between working and being home with family. On average, it takes higher pay to entice workers to rejoin the labor force than to keep them in the labor force to begin with.

A significant rise in worker pay sufficient to draw re-entrants back to the job market will hinge on a dramatically lower unemployment rate, which is well off in the future, perhaps as late as 2022. Given that, there’s a good chance that many of those who’ve already left the job force will not return. It will also give many more the opportunity to exit if they are not rehired soon.

Ultimately, this translates to San Diego’s economy relying on fewer workers to drive growth and maintain economic stability. The economic literature on this topic suggests that future economic downturns could become more frequent and deeper if growth and stability rest on a smaller number of employees. That’s why we need to get this recovery right – learn more here.

That’s why a path forward for discouraged workers that includes upskilling and reskilling is so necessary. The prospect of a more stable and lucrative career would likely draw many people who have left over the past six months back to the labor force. This could put money back into people’s pockets well ahead of late next year or early 2022 and could help to mitigate the possibility of any longer term damage to San Diego’s economy.

EDC’s Advancing San Diego initiative is exploring a viable path forward. With better connectivity to academia, business leaders can begin to communicate the specific skills required to successfully perform jobs in any number of high-demand positions, providing the roadmap for colleges and universities to enhance their curricula perhaps by building out “micro-credential” certificates or academic programs designed to prepare workers in a matter of weeks—rather than years—to take on those jobs.

For more COVID-19 recovery resources and information, please visit this page.

Regardless of how this all plays out, EDC is here to help. You can use the button below to request our assistance with finding information, applying to relief programs, and more.

Request EDC assistance

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San Diego Science & the Global Pandemic: A Recap

San Diego Science & the Global Pandemic: a Recap

In August, San Diego: Life. Changing., a program of San Diego Regional EDC, wrapped up a series of virtual events highlighting the innovation economy and spirit of collaboration that exist in San Diego. The series looked at how the life sciences industry is playing a role in shaping the pandemic, and life after the pandemic, for our region.

The series kicked off in May through a partnership with Alexandria Real Estate Equities Inc., featuring a research institution searching for a vaccine, a therapeutics company working on a treatment, and a med-tech company developing ventilators and other devices to aid in COVID-19 treatment. The expert panel included Dr. Sumit Chanda, professor and director at the Sanford Burnham Prebys Medical Discovery Institute; Joseph E. Payne, president and CEO of Arcturus Therapeutics; and John Stevens, VP of IT at Thermo Fisher Scientific.

San Diego: where collaboration happens.

The scientists that participated in the first webinar agreed that the collaborative spirit of San Diego is what makes the life-changing work that happens here possible. Dr. Chanda stated:

“I don’t know if it’s the weather or the synergy, but the partnerships that happen here don’t happen anywhere else. We are working with Scripps, UC San Diego, and a number of local companies across different disciplines.”

Stevens agreed, in saying: “The partnerships are really important – different companies with everyone working together is truly how we’re going to combat this going forward.”[Thermo Fisher] has leveraged a lot of great relationships in the San Diego area. New partnerships come in every day, and I think it’s important to keep working together as one team.”

Then, in June, EDC partnered with investor Illumina to have genomics experts weigh in on the pandemic. We were joined by Gary Schroth, distinguished scientist and Vice President at Illumina, and James Lu, Co-founder and Chief Scientific Officer at Helix. Gary and James helped us untangle the complicated world of DNA and understand how next-generation genome sequencing is helping scientists understand the intricacies of COVID-19.

Still hiring!

In July, we took a break from the scientists and heard from some of San Diego’s top hiring professionals as they shared pro tips for finding new career opportunities during the global pandemic. Jessica Serrano, Sr. Director of Talent Acquisition and Talent Systems at Lytx; Chris Shoemaker, Senior Talent Acquisition Partner at MindTouch; and Lee Wills, Head of Talent Acquisition and Employee Engagement for Sony North America shared their recommendations for finding and starting a new job while navigating this new remote-first environment. All three of these companies, and so many others, are still hiring for positions that could lead to a meaningful career in San Diego.

See the recorded event here

Stay inspired, San Diego.

Finally, with the help of trusted investor West Health, we wrapped the San Diego Science & the Global Pandemic webinar series up with a look at what he region is doing to ensure our senior population is receiving the care they deserve in a safe and accessible way as they continue to be among the most vulnerable to COVID-19. Moderated by Dr. Zia Agha, Chief Medical Officer and Executive Vice President of West Health, the conversation hit on the most important topics from food security for older adults, to dental care, to healthcare policies that will ensure long term success…as well as what WE can do to help the seniors in our community.

See the recorded event here

If you were able to tune in to our series, we hope that it provided you with some insight on the ongoing and impactful efforts of some of San Diego’s brightest, in a time in our world when we need it most. As always, San Diego steps up to change lives.

San Diego’s economic recovery must be inclusive.

A note from Our board chair

In 1967, my parents fled Cuba to seek freedom and a better life in the United States. Due to travel restrictions, they were forced to move to Spain, where I was born, before finally arriving in the City of Chicago in January 1968. My parents never dreamed that within a generation, their son would become a senior executive at one of the largest financial institutions in the world. Growing up in the Rogers Park neighborhood of Chicago, I certainly never thought that the community I would find myself living and investing in all these years later would be San Diego, California. Yet here I am.

As I take on the role of board chair for the next two years at San Diego Regional EDC, I am fortunate, blessed, and humbled by the opportunities that life has given me. I also recognize that my story is not the norm for Latino immigrants in this country and that my journey thus far is not particularly common for a city kid from Chicago. I feel both an obligation and responsibility to use this time at EDC wisely, effectively, and purposefully. And as the threats and realities of COVID-19 and racial injustice continue to grip our community and our economy, like many, I feel the urgency and the need to accelerate the recovery that lies in front of us.

From the years following the Great Depression to those following the Great Recession, every recovery that the American economy has experienced has increased systemic poverty and widened the inequalities in Latino and African American communities. Too often, in a rush to restore economic normalcy for some, entire segments of our communities have been left further behind and unable to find and maintain their footing on a new and changing economic foundation. Our commitment at EDC is to do everything we can—drawing on the breadth and depth of every partnership and relationship we have—to get this recovery right.

This recovery requires us to redouble our commitment to inclusive economic growth, so that we build back a San Diego that is more resilient because prosperity reaches more people. Even in the midst of great economic uncertainty, we know one thing for sure: the innovation economy will lead us out of this recession just like it has every one before it. If the business community is thoughtful, strategic, and collaborative in this moment, we can ensure a stronger, bolder, more resilient San Diego in the years ahead.

The building blocks are clear: skilled talent, quality jobs, and thriving households.

  1. The hottest job market in a generation has become the weakest. However, there are still shortages for in-demand jobs. This means we need to do better at equipping San Diegans for the jobs of today, and those of tomorrow.
  1. Nearly 30% of small businesses have closed. And we know small businesses employ the majority of San Diegans. This means we must invest in entrepreneurship and resiliency by creating opportunities for diverse founders, and better connecting small businesses to big customers.
  1. Housing prices and unemployment are both at record highs. The economy cannot recover if people cannot afford to live here. This means we must prioritize access to and affordability of the essential infrastructure that working families rely upon—like housing, childcare, and broadband.

If past economic, financial, education, and workforce decisions have exacerbated systemic poverty and created barriers to opportunity for so many, it follows that the decisions we make now can change the future for our children and grandchildren. And with nearly 200 of the region’s largest employers, hundreds of community partners, and the proud legacies of my family and culture behind me—I plan on seeing San Diego Regional EDC through a period of historic and inclusive growth. We will get this recovery right.

—Julian Parra, EDC board chair
& SVP, Region Executive, Pacific Southwest Business Banking, Bank of America

Visit our Inclusive Recovery page for more

See Julian’s op-ed in the San Diego Union-Tribune

What you need to know about reopening your small business – September 2020

The state of California has established a four tier system for reopening nonessential business sectors. Businesses listed in Tier 2, including hair salons, places of worship, gyms, and restaurants, may reopen modified indoor operations that ensure employee and customer health and safety.

What you need to know

In addition to the information laid out in prior public health orders, new updates came into effect on September 1.

Hair Salons, Barbershops, Nail Salons, and Personal Care Services

  • Must require all customers receiving service indoors or using indoor facilities to sign in with their name and phone number

Places of Worship

  • Max 25% capacity or 100 people, whichever is fewer
  • May host religious, cultural, and wedding ceremonies indoors with modifications and in compliance with state guidance

Gyms and Fitness Centers

  • Max 10% capacity
  • Must require all customers receiving service indoors or using indoor facilities to sign in with their name and phone number

Restaurants, Wineries, Bars, Breweries, and Distilleries
(where meal is provided)

  • Max 25% capacity or 100 people, whichever is fewer
  • Must require all guests receiving service indoors or using indoor facilities to sign in with their name and phone number
  • Must maintain the list of names and phone numbers for three weeks
  • Must require guests to wear face coverings at all times while in the facility, including when seated at a table before the meal is served and after the meal is finished
  • Highly encouraged: limit indoor guests to only members of the same household at each table

MORE business RESOURCES

New Statewide Financial Assistance

Governor Gavin Newsom recently signed several bills intended to bolster small businesses across California. This includes excluding forgiven Paycheck Protection Program loans from taxable income, and offering up to $100 million in tax credits for small businesses impacted by the pandemic that agree to hire new or laid-off workers. For more information, visit the State website and fact sheet.

Business Revitalization and Assistance Grant Program 

The County of San Diego has introduced a new program that offers businesses located in unincorporated areas up to $8,000 to help improve the front exteriors of their buildings. Applications will be accepted from October 1-15, 2020. For more information on the application process, eligibility, and general grant guidelines, please visit the County website.

Employment Training Panel

The Employment Training Panel’s Small Business Program reimburses some training costs for small businesses with 100 or fewer employees. The program covers between eight to 200 hours of instruction for both small business owners and their employees, and includes re-training to adjust and shift with COVID-19 regulations. For more information, visit the State website.

Check out more business resources on our COVID-19 page

Economy in crisis: Local housing market stays hot, unaffordable despite COVID

THE TAKEAWAYS…

  • House prices continued to climb locally, despite record job losses from COVID
  • Lower mortgage rates, strong population growth, the addition of high-earning newcomers to the region, and a razor-thin inventory of available houses have fueled house price growth
  • The evidence suggests that thousands of people are being priced out of San Diego each year, which could cause talent bottlenecks for local employers and drive labor costs higher
  • Building new housing will be crucial to making San Diego a more affordable place for people to live in the future

HOUSING STILL ON A TEAR

COVID-19 has done little, if anything, to cool down San Diego’s hot housing market. Depending on the source, the median home price in the region was up in July of this year anywhere from roughly 5% to more than 10% from a year prior. Meanwhile, rents are essentially flat to just slightly down over the past year even as personal income cratered an estimated 10.5% from February to April. Earnings have crawled back as job gains resumed in the summer months but still remain well below pre-COVID levels.

WHY HOUSING HASN’T FALTERED

So, how can the local housing market possibly support climbing prices and some of the highest rents in the country amid record unemployment? A combination of factors are at play, many of which are specific to San Diego.

First, falling mortgage rates lured more homebuyers into the market in the summer following an initial decline in April and May as the COVID outbreak worsened. Existing-home sales rebounded sharply in June and were up more than 10% from a year prior by July. Additional buyer interest drove prices higher.

Second, the pandemic disproportionately hurt workers in lower-paying fields while many workers in higher-paying industries shifted to remote work, allowing landlords and home sellers to charge prices at or near (or higher) than before the outbreak, especially for upper-tier properties.

Finally, San Diego boasts a national and international allure for high earners for its climate, lifestyle, and concentration of tech-related innovation jobs. More people have moved out of San Diego than moved here in recent years, but those moving in to the region tend to make about four times as much than those moving out, allowing home sellers and renters to keep prices elevated.

Therein lies the problem. Reframing the point above, it appears that residents are being forced out because they simply can’t afford to live here anymore, while the people moving in have secured employment in high-paying fields.

It’s important to note that net migration only measures people moving across county lines and doesn’t include organic population growth as people start families, people live to be older, etc. Overall, San Diego’s total population grew by more than 235,000 residents, or 7.6%, between 2010 and 2019—well above the 6.1% growth experienced nationwide. Housing supply has failed to keep up, and the result has been a steady climb in already-high housing prices locally.

THE REPERCUSSIONS

Housing affordability—measured as the ratio between earnings and median house prices—fell for all workers between February and July. This is in spite of the fact that higher-paid workers were, in most cases, able to continue working through the pandemic. However, housing affordability in San Diego is still farther from reach for lower-paid workers, underscoring the affordability issue faced for employees in fields outside of San Diego’s innovation economy, which includes tech and life sciences. Earnings for workers making less than the median salary of $73,596 per year dropped an estimated 19.5%, compared with a relatively less severe 7.3% decline for workers making above the median.

This creates an issue, since it limits the number of workers available in the region for fields outside of white-collar professions and may potentially create a talent bottleneck that could ultimately force labor costs higher. This is especially important for businesses operating within the tourism sector, including restaurants, bars, hotels, casinos, and retail shops already operating on tight margins that could have more difficulty absorbing rising labor costs than firms in other industries with greater pricing power.

Above-average population growth, above-average earnings for many employees, and a constricted housing inventory have created a perfect storm of unaffordable housing in San Diego. Expanding the supply of housing, as well as cultivating additional mass transit options—another topic in and of itself—will therefore be crucial to helping balance the market and ensuring San Diego retains its diverse talent pool.

For more COVID-19 recovery resources and information, please visit this page.

Regardless of how this all plays out, EDC is here to help. You can use the button below to request our assistance with finding information, applying to relief programs, and more.

Request EDC assistance

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Economy in crisis: SD tourism holds up, but the recovery remains uneven

THE KEY TAKEAWAYS…

  • San Diego’s accommodation sector is performing well as summer draws to a close.
  • Hotels have been slow to rehire workers, but recent metrics suggest that a strong spate of hiring is in the cards.
  • The recovery has been uneven, but a number of industries have recouped most of the jobs lost to COVID-19.
  • A number of industries still have a long way to go, and many may never recover all of the jobs lost from COVID as businesses shift their business models.

SAN DIEGO TOURISM ON THE UPSWING

San Diego’s accommodation sector is holding its own despite another wave of COVID-related closures amid a spike in cases. Hotels in particular are closing out the summer on a high note, with the supply of rooms within striking distance of pre-COVID levels as of mid-August. The average daily rate (ADR) for rooms is climbing back somewhat more slowly but, at about $150 per night, is up some 67.4% from COVID lows in early May.

It took about a month, but as the COVID downturn intensified, accommodation employment tracked changes in room supply and average daily rates nearly one-for-one. That relationship would have suggested that accommodation employment should have grown by about 3,500 positions in July. Instead, employers only added back just 100 jobs, signaling caution on the part of hotels as the economy slowly climbs out of the crater left by the COVID-19 outbreak.

The caution within the industry makes sense. Laying off workers is painful for employers and employees alike, which is a likely reason why hotel employment didn’t falter until April and May, even though the impacts of COVID were felt as early as March. Similarly, instead of bringing workers back on just to have to let them go again in the event of another flare-up of the virus accompanied by additional closures, hotel managers may be taking a wait-and-see approach to rehiring. Nonetheless, recent industry performance suggests that hotels should be bringing about 8,000 to 8,500 workers back on to accommodate the increase in room supply and rates over the past couple of months once they feel it’s safe to do so.

As of the July employment report, accommodation employment rested at 17,800, up 43.4% from May’s low of 12,400 but still 43.3% below its pre-COVID peak of 31,400 in February. Given that expected hotel revenues—measured by the room supply multiplied by average daily rates—are just 16.5% below pre-COVID levels, employment should quickly follow. An increase of 8,000-plus employees would bring hotel employment more in line with expected foot traffic at hotels and would follow the trend seen so far during the downturn.

SAN DIEGO FACES AN UNEVEN RECOVERY

To say that the COVID downturn and subsequent recovery have been uneven across industries would be an understatement. The hotel industry’s improvement is encouraging, and a number of industries are at or near their pre-COVID employment levels, including: Heavy and civil engineering construction; building equipment contractors; computer and electronic product manufacturing; aerospace manufacturing; grocers; securities and commodities investment; and scientific research and development services.

However, total nonfarm employment in San Diego is still down 10.5% from February due in large part to slower rehiring in industries like restaurants and bars; personal services, such as dry cleaners and other laundry services as people work from home; and local government education, likely reflecting school jobs aside from teachers—like administrators, janitors, etc.—as the county waits to resume in-person teaching.

Unfortunately, many of these jobs will be slow to come back due to their face-to-face nature. What’s worse, many of those positions may not return at all. Even with the advent of a safe and effective vaccine, many businesses have changed their fundamental business models and have adopted new operational norms—like Twitter, who made working remote a permanent option for employees. As a result, the same positions required for those companies before the COVID outbreak may no longer be necessary to operate in the post-COVID world.

The impact of COVID has not only affected the lowest-paid among us in San Diego, but it has hurt communities of color the worst. Now, more than ever, targeted and effective solutions are needed to help these communities not just recover but thrive in the future. Reskilling and training of the workforce and offering equal access to capital for minority-owned businesses are not just ethical and moral necessities—they are economic ones, too. Because, we all do better when everyone is doing better; and a more resilient San Diego economy will help us all in the long-run.

For more COVID-19 recovery resources and information, please visit this page.

Regardless of how this all plays out, EDC is here to help. You can use the button below to request our assistance with finding information, applying to relief programs, and more.

Request EDC assistance

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A legacy of discrimination: Redlining in San Diego

Economic inequality is a pre-existing condition. And just like in the rest of the country, a history of housing discrimination and redlining policies has burdened San Diego with decades of mounting inequities that can still be seen and felt more than 80 years later.

Less than 20 miles apart, the 1938 redlining policy presented two vastly different lending practices that have shaped our socioeconomic reality decades later.

  • La Jolla: “Residents embrace nearly all types of professions and are all white. No threat of foreign infiltration. Homes are well maintained.”
  • Logan Heights: “Racial concentration of colored fraternity. Homes show only slight degree of pride of ownership and are on the average negligently maintained.”

Scroll over the map below to visualize how redlining policies set in 1938 still impact where people live and what they earn, today.

 

Today, San Diego is a majority-minority region, meaning no single race or ethnic group makes up more than 50% of the total population. It is a much larger, smarter, and more diverse region than it was 80 or 90 years ago, but we are still segregated. That is the legacy of deliberate investment in some parts of our county, and deliberate disinvestment in others. So, as we talk about getting this economic recovery right, we must address the ways in which communities of color and small businesses are most impacted.  It’s no coincidence the above map mirrors that of COVID-19 impacts.

Learn more about San Diego’s economic recovery