Los Angeles Mayor Says Virus Economic Fallout Worse Than ‘08
Los Angeles Mayor Says Virus’s Economic Fallout Worse Than 2008
(Bloomberg) -- Los Angeles Mayor Eric Garcetti, who shut bars, beaches and other public venues more than a month ago to contain the coronavirus outbreak, said economic fallout from the pandemic has been far worse than the 2008-2009 financial crisis.
Almost 300,000 residents are unemployed, exceeding the 13% jobless rate at the height of the great recession, Garcetti said, citing preliminary numbers. That figure will continue to rise, he said. A survey by Loyola Marymount University said half of the city’s residents have lost their jobs or have had their hours reduced as a result of the crisis.
Los Angeles County reported 24 new deaths from the outbreak Sunday compared with 81 deaths on Saturday, the highest one-day tally so far. A total of 600 people have died in the greater L.A. area, where infections have risen to more than 12,000. The state as a whole reported 94 new deaths from coronavirus on Sunday.
“Our city is under attack, our daily life is unrecognizable, we’re bowed and we’re worn down, we are grieving our dead,” Garcetti said during an emotional state of the city address. “But we are not broken.”
For a city that’s reliant on tourism, hotel reservations have plunged, he said. After the Sept. 11 attacks, airport passenger traffic slumped by as much as a third that month, followed by a recovery that took a decade. With the pandemic, air travelers are now down 95%, he said.
“From a fiscal perspective, this is the worst it’s ever been,” he said.
With plummeting revenues, the mayor said he’s instituted a hiring freeze and has asked civil servants to take 26 furlough days, or the equivalent of a 10% pay cut. The city of 4 million people has borrowed $70 million from its special fund and reserves, which may not be fully reimbursed by state and federal governments, he said.
Garcetti also cautioned that there could be a second wave of outbreak and it may be “months” before people are able to safely gather in large groups. Los Angeles is the second-biggest city in the U.S.
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