Bob McPhail 5:30 p.m., May 25
Shutdown will hit San Diego, already belted by sequestration
Military, including contracting, is 22% of local economy
The presence of the military and aerospace/defense contracting add up to 22% of the San Diego economy, says Kelly Cunningham, economist for the National University System Institute for Policy Research. If the government shuts down tonight -- as seems quite likely -- San Diego will be hit harder than other cities, he says.
Already, sequestration has bitten into the San Diego economy. Adjusted for seasonal factors, San Diego's employment has been flat since March, Cunningham points out. Civilians employed by the military have been laid off, for example, and that ripples through the economy. Also, he believes that many employers have deliberately tried to keep their number of workers below the 30 threshold mandated by Obamacare.
All told, the total annual output of goods and service in San Diego County is $177.4 billion. Potentially, "several billion" could go out of that figure as a result of both the shutdown and sequestration, says Cunningham.
Sequestration is one reason that San Diego hotel business is growing very slowly, particularly as compared with Los Angeles, Orange County, and San Francisco, says tourism guru Jerry Morrison.
In sequestration, people got furloughed and did not get paid. in a government shutdown, people should eventually get their pay, he points out. Much depends on how long the shutdown lasts.
The shutdown won't affect so-called essential operations such as the border patrol and much military activity. However, Cabrillo National Monument is likely to be affected, as may national forests.
Sequestration was intended to cut 2% a year out of the economy over 10 years. In a defense-heavy economy such as San Diego's, that number goes up to 6% over the period, he says.
More like this:
- San Diego could thrive from pain — Dec. 17, 2014
- San Diego’s 2014 economy looking so-so — Dec. 31, 2013
- Davis, Peters, Unions call for negotiations to end federal sequestration — Aug. 22, 2013
- San Diego Economy: Where’s the Oomph? — June 6, 2012
- Defense, Fire Reconstruction Propel San Diego Economy — Nov. 5, 2009