The COVID-19 pandemic could be a ‘tipping point’ for the Central Valley’s growth, innovation
Despite the challenges the Central Valley has faced in the past few months, the coronavirus pandemic could prove a “tipping point” for the region in terms of innovation and growth, according to speakers at the annual State of the Valley event.
“In this pandemic crisis, I see a real opportunity for the North (San Joaquin) Valley,” said Mark Keppler, the executive director of the Maddy Institute, a local public policy organization. “If there’s some strategic thinking that’s going on … and then those plans are put into action, I think the next 25-50 years could be the time that the North Valley really emerges as a region.”
The event, co-presented by the Modesto Chamber of Commerce and Opportunity Stanislaus, was held Monday as a live webinar and featured presentations from Keppler and Dave White, the CEO of Opportunity Stanislaus. Trish Christensen, the chamber of commerce’s president and CEO, moderated the event.
Both Keppler and White expressed optimism at Stanislaus County’s ability to recover from the COVID-19 pandemic, which sent unemployment skyrocketing in March and April and left many without jobs. Coupled with large-scale shutdowns of many parts of the economy — from shelter-in-place orders in the spring to current restrictions on indoor dining and other activities — brought whole sectors of the economy to a standstill.
But six months in, the Central Valley is beginning to see signs of recovery, both Keppler and White said. Recent unemployment data for Stanislaus County clocked in at 10.9%, down from 13.6% in July and a high of 17% in April. Jobless numbers in the county are currently lower than state-level unemployment, which was 11.4% in August, down from 13.5% in July.
“We’ve done better than most of California,” White said. “The main reason for that is we don’t rely on tourism and transportation as much as other places in California.”
The Central Valley’s key industries are manufacturing, agriculture and other essential industries, which have remained open throughout the pandemic. Additionally, seasonal labor — from farm work to Census enumerators — has caused a spike in employment across the Valley, resulting in lower unemployment figures.
SMALL BUSINESSES STRUGGLE DESPITE SUPPORT
White spoke to the Valley’s relative success in terms of coronavirus recovery, aided in part by local business support programs, including grants and loans like the Paycheck Protection Program, which gave small business access to billions in federal money.
Now, with the PPP program complete, and businesses adapting to the “new normal” under COVID-19, White stressed the importance of following the statewide safety guidelines and tiered system that will eventually allow for more reopening across the county.
Still, White said, people should not expect a V-shaped recovery from the pandemic, due to a decreased participation in the economy and shutdowns still in place across many industries. People are still wary of returning to work, as well as shopping and dining, he said.
“They’re scared, and they’re not confident,” White said. “In order to establish that confidence, we have to see a decrease in the impact of the virus on our community…. The longer this goes, the more we’re going to see business failure.”
CHANGING SKILLS FOR A NEW ECONOMY
The pandemic has changed the ways many Americans live their daily lives, from telecommuting to relying on online retailers for much of their shopping. Keppler said he is predicting ensuing changes in the Valley as well, including an increased emphasis on logistics, coming from large retailers and delivery service companies like Amazon, UPS and FedEx.
White said he also expects “on-shoring” of manufacturing, moving plants from overseas back to the United States, and creating more job opportunities in those sectors, as well as expansion plans from more traditional corporations.
Amazon recently announced 2,600 new jobs in the Central Valley, as part of a nationwide hiring spree of 100,000 workers, ranging from warehouse staff to finance and HR positions in the individual buildings.
Manufacturing jobs coming to the Central Valley will require workers with skills like PLC coding, automation and robotics, White said, raising the requirements for applicants. He said he expects similar changes in fields like agricultural technology and logistics.
“We need to invest in coding and all these upper skills that will be required in this new economy,” he said.
Additionally, White said, Stanislaus County needs to attract these skilled workers from other areas in the state and around the country, offering a high quality of life at a comparatively lower price point.
ATTRACTING POTENTIAL BUYERS TO THE CENTRAL VALLEY
As teleworking has become a more permanent option for many companies, Keppler said it’s estimated that Americans have saved around $91 billion by working at home this year, and employers are eager to continue with the practice and eventually reduce their footprints in high-priced areas like Silicon Valley.
Keppler said not only will this reduce the commutes of many workers who regularly drive up to three hours from the Valley to the Bay Area, but also make areas like Stanislaus County more attractive to potential renters and buyers.
In a post-office landscape, Keppler stressed, the Valley needs to make itself competitive not only on a regional level, but “nationwide.” This means focusing on housing, attention to detail in urban planning and ensuring that cities like Modesto provide ample amenities — like parks, performing arts and a walkable downtown — to attract new residents.
White added that as the pandemic more heavily affects urban areas, like New York City, Los Angeles or San Francisco, a number of people may be looking to move out of larger cities and into smaller ones they deem safer, like Modesto or other places in Stanislaus County.
“There’s going to be demand for housing,” he said, “and we need to be ready for that.”
White said he foresees a sort of hybrid model, with increased work-from-home and the possibility of smaller, communal offices popping up in more affordable cities where the employees of large tech companies will be able to work a few days a week or month.
He said it’s crucial for the public and private sectors to work together and create solutions for these needs across the Valley, and make the region as lucrative as possible for both companies and workers.
“The potential here is unbelievable,” Keppler said. “There has to be civic pride, and a sense of, ‘You know what, we can do this!’”