California Under Fire
By: Emily Burk
Northern California, a huge tourist destination for wine-lovers, is bouncing back following the severe wildfires that broke out in early October of this year. These regions of Northern California are finding their homes and business destroyed, the death tolls high and rising, a shortage of skilled contractors, and the costs facing them to be insurmountable, both implicit and explicit. The wildfires have caused a great deal of damage for many citizens, and the economic challenges facing them are not helping. Overall, Northern California has a long road ahead, with many obstacles along they way, and will need the government’s help. California must work to rebuild their businesses and counties in order to keep the economy running and businesses open and making revenue. Here are some of the largest obstacles Northern California will face following this disaster.
In lieu of the severe damage and destruction of homes and business, the demand for skilled contractors is soaring, while the supply, already low before the wildfires, is facing a huge shortage. This plight, is only increasing the demand, allowing for a higher revenue for the construction workers available, given the shortage. Additionally, Northern California is also facing a shortage of lumber resources, given the fires and high variable costs for the resources needed to rebuild homes and businesses. These costs are only expected to keep rising. Due to the shortages, this is only driving the total cost for consumers and business up even higher.
Furthermore, the economic impact that the wildfires have on businesses in the wine counties such as Sonoma and Napa is huge. One source stated, “Napa also could see economic impacts due to its reliance on wine-related tourism. Several dozen wineries in the region were damaged or destroyed. In Napa Valley alone, visitors generated nearly $2 billion in spending in 2016,” according to research conducted by San Francisco-based Destination Analysts. With the destruction of businesses and tourism falling, business are losing revenue at a steady rate and facing both huge implicit and explicit costs. The costs alone to rebuild in those counties affected are taxing, but additionally the amount of time needed to rebuild their business is another challenge in and of itself, that will affect production and revenue of the business.
Overall, these wildfires have many more impacts that just putting people out of their homes. The destruction of businesses, loss of revenue and tourism, cost of rebuilding and the production following, and the effects of supply and demand on the situation, show that Northern California needs to gear up for an economic battle. Northern California will need government and local help in the rebuild effort in order to keep their economies afloat.
Works Cited
Wotus, Matt, and Melissa Gray. “Toxic Ash, Debris Pose Risks after Wildfires.” CNN, Cable News Network, 28 Oct. 2017, www.cnn.com/2017/10/28/us/california-wildfire-cleanup/index.html.
Daniels, Jeff. “California Begins 'Historic Cleanup' from Fires but Faces Serious Hurdles in Rebuilding.” CNBC, CNBC, 26 Oct. 2017, www.cnbc.com/2017/10/26/california-begins-fire-cleanup-but-faces-serious-hurdles-in-rebuilding.html
Bonos, Lisa, et al. “Death Toll Continues to Rise as California Wildfires Burn On.” The Washington Post, WP Company, 15 Oct. 2017, www.washingtonpost.com/news/post-nation/wp/2017/10/14/more-californians-ordered-to-flee-as-gusting-winds-spread-wildfires/?utm_term=.1ca1b3d95e8f.
Totally agree. Natural disasters wreck havoc on local and sometimes even national economies. Gas prices have increased because of the hurricanes in the Gulf.
ReplyDeleteGreat job! After conducting some research myself, I discovered that the northern California fires will have an effect on wine production because of the damage to some of the vineyards. In addition to loss of life and property, hours of labor and resources were expended in fighting the fires, as well as costs to clean up and replace lost property. However, it's important to note that California has a large and diversified economy, so the damage is not likely to cause a significant hit to the overall 2017 economic results. Short-term regional economic distress will be substantial; many small businesses may not recover. But as much of a tragedy this fire has visited upon this region, it will have no material impact on the massive California economy.
ReplyDeleteCalifornia is in a tough spot. Will the wildfires become an bigger problem as the shortage of skilled contractors gets larger? It sounds like a deadly cycle as the fires get larger and there are less skilled people to take care of them. Wildfires in California are common, so they should be prepared with the necessary tools to prevent harm to any potential homes or farmlands. Do you think for people will develop the skills necessary to be qualified to handle the fires, as I'm sure the shortage is driving the wages of the few skilled workers up, until there is eventually a surplus?
ReplyDeleteWhile this may not largely impact California's economy as a whole, Northern California is currently in a rough place economically. Not only have the wildfires impacted the supply of lumber and contractors, they have also likely decreased the demand for tourism in the area. As probable tourists saw the disastrous wildfires on the news, they may have reconsidered their vacation spot. This only further deteriorates the economy as businesses struggling to stay open find themselves with decreased revenue. How is North California planning to account for these economic losses? Surely they need to recover somehow.
ReplyDeleteThis topic is very interesting because it is not only extremely relevant, in terms of our environment, but also because of the economic standpoint. As you mentioned in your post, I can only imagine how huge the economic impact on the wildfires is. There are many tourists that go to California, however after the fires there won't be as many people going, which will also have a negative impact on the economy. Though, I hope that California will be able to get back on track, especially after the fires impacting Napa Valley; it seems as if people are working very hard to recover.
ReplyDeleteBeing one of the strongest state economically in the United States, any effects or instability issues within California will most definitely have repercussions on the United States' economy as a whole. While this might not be completely felt in every facet of our economy it most likely will have some effect on certain industries like that of wine, one of the notable sections of the economy of Northern California mentioned in your blog post. If a substantial amount of certain types of wine is produced and exported from the regions that have been having issues with the wildfires, the price most definitely will raise in stores around the nation that sell that certain type of wine, therefore having an overall negative effect on normal buyers of these specialty wines.
ReplyDeleteI could not agree more! After reading this article, I called my uncle who lives in Northern California and asked him about these wildfires. He agreed with you saying that there has been a significant increase in demand for construction workers as the wildfires have burnt down many structures. He added on saying that there has been a decrease in the amount of tourism in the area due to the wildfires. Finally, he once again agreed with you on the fact that there has been a decrease in the supply of resources. All in all, wildfires negatively affect the economy of Northern California.
ReplyDelete