Wildfires during pandemic intensify economic pain in West

 



The fires consuming the forests of California and Oregon and darkening the skies over San Francisco and Portland are also damaging a regional economy already singed by the coronavirus outbreak.

Wildfires are destroying property, running up huge losses for property insurers, and putting a strain on economic activity along the West Coast that could linger for a year or more.

The credit rating agency A.M. Best estimates that insured losses from the blazes in California could top the unprecedented $13 billion recorded in 2017 when the state was hit by three of the five costliest fires in U.S. history.

“We know that the damage is widespread, but we don’t really know how many homes, how many structures have been destroyed,” said Adam Kamins, an economist who tracks natural disasters for Moody’s Analytics. “I imagine the number is going to be an unbearably high one.”

The fires are unlikely to make much of a dent in the overall $20 trillion U.S. economy. The financial fallout will be measured in the low billions of dollars, not in hundreds of billions or trillions. To make a nationwide impact, Kamins said, it would take something like Hurricane Katrina in 2005, which disrupted oil supplies.

But the economic pain will be intense in areas decimated by fire, especially poor towns in rural Oregon and California, piling on at a time when many businesses have already succumbed to the pandemic-induced recession. U.S. economic activity collapsed at a record 31.7% annual pace from April through June. The virus and the steps meant to contain it have thrown millions of Americans out of work.

The fire wiped out much of the small community of Phoenix, in southern Oregon, including downtown businesses like La Tapatia, a Mexican restaurant opened in 1992.

“Good places like our own La Tapatia, but so many other family-run businesses, (were) destroyed by the massive fire,” its owners informed patrons in a Facebook post, adding there was “lots to do” but they hoped to someday reopen.

Five hours away in coastal Lincoln City, Oregon, the Autobahn 101 survived, but the couple who own the German-style pub lost their home, their chickens and nearly all of their personal belongings to fire. They sleep in the back room of the roadside business.

The pub had already scaled back hours because of the pandemic, but co-owner Roy Baker was optimistic about its future and still has dreams of opening a small brewery inside a shipping container outback.

“We’re getting back on our feet,” said Baker, who temporarily reopened Sunday after rewiring the pub’s electricity and discarding food that spoiled after days without power. “Everybody’s coming together and helping each other.”

The Bakers were among thousands of Oregonians who evacuated; dozens are missing and feared dead.

In California, nearly 17,000 firefighters are battling 29 major wildfires. Since mid-August, the blazes have destroyed 4,100 buildings and killed 24 people in the state. Fires have engulfed 3.3 million acres of land in California this year -- desolation greater in size than Connecticut.

“This is like living through an apocalypse,” said Sarah Trubnick from San Francisco, where smoke from the fires has blotted out the sun.

Trubnick had to temporarily close her restaurant and wine bar, the Barrel Room, in the city’s financial district two weeks ago because of the pandemic. Even her restaurateur friends who managed to stay open are now struggling with smoke that makes outdoor seating impossible. “It’s like every day is something new,” she said.

Wildfires once did little economic damage because they occurred in remote forests. But Americans increasingly have moved into what was once a wilderness, leaving themselves, and their homes and businesses more vulnerable.

In 2014, Max Nielsen-Pincus, chair of the environmental science and management department at Portland State University, and researchers from the University of Oregon and the U.S. Forest Service studied the economic impact of wildfires. They found the fires actually generated short-term economic gains in small communities as firefighters checked into local hotels and ate at local restaurants. Local laborers cleared roads and helped rebuild.

But such economic bumps are usually short-lived. By spring, affected economies typically lost momentum and fell into a period of slower growth that could last up to 18 months. Tourism could suffer because “visitors may not want to return fearing a blackened landscape,” according to the paper published in the journal Forest Policy and Economics. And economic activity such as logging can be wiped out.

Rebuilding can kick start a local economy, but a lack of resources to see those plans through can lead to “a period of limbo.”

“Urban areas like the suburbs of Portland -- they’ll probably recover pretty quickly,” Nielsen-Pincus said in an interview. “But these rural communities that are impacted by nearby fires -- this could be a drag on their economy that lasts months or years.”

He said poor rural communities, like those in Oregon’s hard-hit Santiam Canyon east of Salem, will need federal and state aid.

The number of wildfires declared disasters by the Federal Emergency Management Agency has grown in recent years. FEMA, for instance, declared 43 California wildfires disasters from 1980 to 1999 — but 300 from 2000 to 2019. Oregon had no such wildfires from 1980 to 1999 but 63 over the past 20 years, according to FEMA data analyzed by the insurance website QuoteWizard. Only a fraction of wildfires is designated disasters by FEMA.

All five of the costliest fires in U.S. history, measured by insured losses, have occurred in the last three years, all in California, according to the Insurance Information Institute. That includes the November 2018 Camp Fire that destroyed Paradise, California, and left more than 80 people dead and up to $10.7 billion in insured losses.

You've probably heard by now that Latinos are contracting and dying from the coronavirus more than any other ethnic group in California. But the pandemic is also disproportionately affecting their financial health.

That's according to a new poll by NPR, the Robert Wood Johnson Foundation, and the Harvard T.H. Chan School of Public Health, which shows that in Los Angeles, 71% of Latinos — almost twice the percentage of whites — report serious financial problems from July to August. (For context, 52% of Black households in L.A. report serious financial problems; for white households, that number is 37%.)

That's been the case for Juan Quezada, who after working his way up from dishwasher to restaurant manager in East L.A. lost his job in March when Governor Gavin Newsom ordered restaurants to close.

"I am just draining my savings. Draining and draining and draining," he told me. "I had to sell my car. Uber is a luxury."

He now bikes or rides the bus to his part-time job as a fast-food cashier.

"I only work three hours and four hours rather than eight or 10 or 12 like I used to work," Quezada said.

He estimates he has about six months of savings left, and he's not alone. In Los Angeles, more than 35% of households report serious problems with paying credit cards, loans, or other expenses, while the same percentage report having depleted all or most of their savings. Eleven percent of those polled say they didn't have any savings at the start of the outbreak.

LATINO POVERTY IS DIFFERENT

"In Washington, the idea is you're poor because you don't work. That's not the issue with Latinos," David Hayes-Bautista, a professor of medicine at the UCLA Fielding School of Public Health, told me.

"Latinos work. But they're poor. The problem is, we don't pay them," he said.

Hayes-Bautista's not being hyperbolic. Latinos have the highest rate of labor force participation of any group in California. When officials shut down most businesses in March, Latinos, like everyone else, lost jobs. But Latinos got back to work faster.

"In April the Latino [labor force participation] rate bounced right back up and actually has continued to increase slowly, whereas the non-Latino rate is dropping," he said. "The reward that Latinos have for their high work ethic is a high rate of poverty."

That work ethic has also led to a much higher rate of COVID-19. Latinos dominate essential jobs that make them highly susceptible to the coronavirus; they now account for 60% of the coronavirus cases in California, even though they're about 40% of the population.

Not only are they getting infected, but there's been a five-fold increase in working-age Latinos dying from the virus since May.

"These are workers usually in their prime years, peak earning power and everything else," Hayes-Bautista said. "Latinos between 50 and 69, those are the ones that are being hit the hardest. That's pretty worrying."

EXPOSED WITH NO HEALTH INSURANCE

Many of the essential jobs that Latinos are more likely to do — farm worker, nursing home aide — lack benefits. That means Latinos are more exposed to the coronavirus and less likely to have health insurance due to lack of coverage through an employer.

Others, like Mariel Alvarez, lack health insurance because of their immigration status. Alvarez is undocumented and was brought to the U.S. by her parents as a child from Bolivia. She lives with her parents and sisters in the San Fernando Valley. Alvarez told me she lost her sales job and her employer-sponsored health insurance when the pandemic hit in March. Then she got sick.

Eventually, her whole family was ill. Alvarez had to pay out of pocket to go to a CVS clinic near her home. But after a couple of $50 visits, it got too expensive.

"I just couldn't afford to continue to go to the doctor," she said. She thinks she had COVID-19, but she was never able to get tested.

Now that Alvarez has recovered, getting a job with health insurance is crucial, because she doesn't qualify for any state or federal support. She is one of roughly 640,000 immigrants with a permit that allows her to work and defers deportation under DACA, the Deferred Action for Childhood Arrivals Program.

"I don't want to jeopardize that. You're not supposed to use any of the government assistance when you're on that. You're only supposed to work and that's it," Alvarez said.

The pandemic has created a big need for one job — contact tracers. So Alvarez completed a certificate online. She's currently going through the application process; if she gets hired, she hopes to have benefits again.

In the meantime, she told me, she'll do her best not to get sick.

Many Black Americans have jobs that expose them to the new coronavirus, which may help explain why they are more likely than white Americans to die of COVID-19, researchers say.

"There are a lot of theories why Blacks are dying at higher rates than other races during this pandemic," said study co-author Fares Qeadan, a biostatistician at the University of Utah.

"However, our descriptive study strongly suggests that Blacks are not dying from COVID-19 because they are genetically more susceptible, have more comorbidities, or aren't taking the necessary precautions. Instead, it's likely because they are working in jobs where they have a greater risk of coming in contact with the virus day in and day out," Qeadan said in a university news release.

Black Americans account for 12% of the U.S. population but 21% of COVID-19 deaths, the researchers noted.

The study found that compared to White Americans, Black Americans are nearly three times more likely to work in healthcare support jobs such as nursing assistants or orderlies. And they are nearly twice as likely to have transportation jobs such as bus drivers, movers, and taxi drivers.

Black Americans are also more likely to have jobs deemed essential during the pandemic: food preparation, building and grounds maintenance, police and protective services, personal care (child care, hairstylists), office and administrative support, production (assemblers, painters, machinists), social work, and community services.

When they compared these job classifications with COVID-19 deaths in 26 states and Washington, D.C., the researchers found that all of these jobs put workers at higher risk of infection and death from COVID-19.

Police and protective services, health care support, transportation, and food preparation were among the jobs most closely associated with COVID-19 deaths.

"I find it ironic that the people we depend on as essential workers to wipe down our counters and keep things clean are the most vulnerable among us," said study co-author Tiana Rogers, a program manager in the university's business school.

"We need to make sure that the people doing these jobs can continue to provide for their families without having to risk their lives," Rogers added.

The findings were published recently in a special issue of the journal World Medical & Health Policy.

Deadly West Coast wildfires are dividing President Donald Trump and the states’ Democratic leaders over how to prevent blazes from becoming more frequent and destructive, but scientists and others on the front lines say it’s not as simple as blaming either climate change or the way land is managed.

The governors of California, Oregon, and Washington have all said global warming is priming forests for wildfires as they become hotter and drier. But during a visit Monday to California, Trump pointed to how states manage forests and said, “It will start getting cooler, just you watch.”

Scientists say wildfires are all but inevitable, and the main drivers are plants and trees drying out due to climate change and more people living closer to areas that burn. And while forest thinning and controlled burns are solutions, they have proven challenging to implement on the scale needed to combat those threats.

As crews battled wildfires that have killed at least 36 people, destroyed neighborhoods and enveloped the West Coast in smoke, Trump contended that the states are to blame for failing to rake leaves and clear dead timber from forest floors. However, many of the California blazes have roared through coastal chaparral and grasslands, not forest, and some of the largest are burning on federal land.

In Oregon, it was the forests that burned at unprecedented levels this past week. Almost the same number of “megafires” — defined as having scorched 100,000 acres or more — were burning last week as have occurred during the entire last century, said Jim Gersbach, spokesman for the Oregon Department of Forestry.

Experts, environmentalists and loggers largely agree that thinning trees and brush through prescribed burns and careful logging will help prevent forests that cover vast tracts of the American West from threatening cities with fire.

But whether that would have spared towns is less clear. Strong winds sent flames racing down the western slopes of the Cascade Range into small towns like Detroit, Oregon, wiping them out.

“In a wind-driven event at 30 miles an hour, where you’ve got embers flying far ahead of the actual flame fronts and flame lengths being much greater than normal, is thinning going to really be enough to stop a home from burning in an inferno like that?” Gersbach said.

Millions of dollars are spent on tree thinning and brush clearing every year in Western states, though many argue more needs to be done. But scaling up the costly, labor-intensive work as more people move into mountains and forests has many challenges.

Forest thinning helped save the town of Sisters, Oregon, from a wildfire in 2017. But out of 30 million forested acres statewide, prescribed burns have been used on only roughly a half-percent a year, Gersbach said.

In Washington state, a prescribed burning program hasn’t yet begun on state lands, said Department of Natural Resources spokesman Thomas Kyle-Milward. The state helps manage deliberate fires on thousands of acres of federal lands each year.

Many places don’t have the capacity or the money to do the work, said John Bailey, an Oregon State University professor of tree growth and fire management. There are no longer enough mills to handle salvageable timber, whose proceeds can help offset the costs of forest thinning.

“Sometimes I feel like we are making progress at increasing the pace and scale of resilience treatments, but largely, the same issues are at play, and progress has been slow,” Bailey said. “More folks are probably ‘on board’ to the ideas, but implementation is hard.”

And as more people move into rural areas or build vacation cabins in the woods, prescribed burning is less of an option.

“Where you have lots of people living on small acreages close together, and you’ve got houses and barns and sheds and corrals and fences, it’s very difficult to do a prescribed burn,” Gersbach said. “You’ve got a lot of things that, if that fire for some reason escapes, you’re almost immediately into someone else’s property.”

West Coast governors have bluntly blamed climate change and accused the Trump administration of downplaying the threat.

California Gov. Gavin Newsom was tempered Monday in his meeting with Trump, saying: “We come from a perspective, humbly, where we submit the science is in — and observed evidence is self-evident — that climate change is real and that is exacerbating this.”

He also pointed out that 57% of forest land in California is controlled by the federal government. Just Friday, Newsom called out the “ideological BS” of those who deny the danger of climate change.

In southern Oregon to Northern California, warnings of low moisture and strong winds — conditions that can drive the flames — are in effect through Tuesday. Tens of thousands of people have fled their homes as the fast-moving flames turned neighborhoods to nothing but charred rubble and burned-out cars.

At least 10 people have been killed in Oregon. Officials more than 20 people are still missing, and the number of fatalities is likely to rise as authorities search. In California, 24 people have died, and one person was killed in Washington state.

The U.S. Centers for Disease Control and Prevention has more on minorities and COVID-19.

https://twitter.com/Reuters/status/1305695330986582018?s=20