CSUB talks economic challenges and how to recover


Chase Anderson, Reporter

CSU Bakersfield held a discussion led by Dr. Aaron Hegde, Economics department chair, that delved into the economic challenges that the country is facing due to COVID-19 and steps that the president can take to being to overcome Friday, Oct. 30. 

This discussion is held only during election time with the goal of sharing information and analysis on economic issues that are going to be of importance for President-Elect Joe Biden to address in his coming term.  

The first presentation was given by Mark Evan, retired chair of the Econ. Department, which covered COVD-19 and the effects that it has had on the economy. Evans began his discussion with basic information on the epidemiology, how the virus is being studied and controlled, of COVID-19 with the focus of herd immunity which looks at the percentage of the population where there is the peak number of cases.  

Evans explained this herd immunity becomes important when introducing a vaccine as once herd immunity, or a peak, is reached the overshoot, extra outlying cases, becomes very low. Evans then provided three different scenarios from a study done by the University of Washington that examined the effectiveness of facemasks. The first scenario was based on the continuing to loosen social distancing policies, the second was 95% of people wearing masks in public settings, and the third was 95% of people wearing masks and practicing proper social distancing guidelines while in public.  

“If you’re reopening but everybody is wearing a mask you’ve prevented more than half of the deaths…masks in terms of the basic health appear to be very important,” said Evans. 

Evans spoke on how mandates have impacted consumer spending from a study that showed social distancing mandates have accounted for only 7% of the 60% decrease business has seen in customer traffic and also showed that customer traffic was slowed in response to high death counts before these mandates were implemented, returning to normal when mandates were lifted.  

Dr. John Deal was next to present on the challenges that are currently being faced in international trade. The deal opened by presenting a comparison of the conventional approach versus the Trump Administration’s approach. The conventional approach values an emphasis on multilateral trade agreements working with global institutions and an effort to reduce barriers to trade. In opposition, the Trump Administration’s approach focuses on concerns over trade deficits and the growing influence of China and utilizing the threat of trade barriers as a bargaining tactic. 

The first issue Deal covered was that of trade balances as there has been a negative trade balance since the mid-1970s. This has a mixed impact where it creates cheaper goods for U.S. consumers but presents possible negative impacts on employment due to outsourcing. The second issue to be discussed was that of trade barriers which Deal explains is something used to protect domestic producers from foreign competition. 

In 2018 and 2019 the U.S. set additional tariffs, taxes placed on imported and exported goods, on exports such as steel, aluminum, and other manufactured goods. This created retaliatory tariffs to be put on the U.S. by many countries and was mainly seen in agricultural productsTo make up for this impact on agriculture 

“The Trump Administration provided direct payments to farmers so they wouldn’t be so upset, again this had a significant impact on the budget deficit and were still doing that to compensate for the damage that has been done,” Deal said. 

It as well increased the input costs for steel and aluminum that studies showed created a reduction in manufacturing jobs by an estimated 75,000.  

The challenge Deal stated that is presented to President-Elect Biden is reversing the damage to relationships with allies from the trade wars created by the Trump Administration and addressing other various problems that have existed such as unfavorable trade balance, inequities in trade agreements, and the rising competition with China. 

Hegde was the next presenter that tacked the issue of immigration in which he presented in two divides: the documented and undocumented. The most utilized route of immigration is through family reunion or being sponsored which accounts for two-thirds of documented immigration with the remainder obtaining a work visa or refugee. Undocumented immigrants typically are those that have come over with documentation but lose it as it expires, with the most widely talked about and publicized being those who crossed borders without documentation. The main way that documented immigrants come to the U.S. is through an H1B Visa for school.  

There have been changes in this type of visa very recently as currently 85,000 new H1Bs come in every year and the applications are not being processed in a timely manner. Higher salaries are being required to be paid to those who obtain work through this type of visa with the assumption being that these individuals take away jobs from Americans applying for the same positions because they are willing to work for lower pay.  

“In the literature, there is not a whole lot of evidence to support that…consistent evidence is lacking,” Hegde said. 

In the trend of immigration to the U.S., the majority of undocumented immigrants used to be those from Mexico, due to its location and lax border control, but since 2007 that trend has actually decreased as Hedge explained that in terms of undocumented immigration those from other counties now make up a larger population than those from Mexico.  

Challenges of immigration that now faces the President-Elect are matters of addressing those overstaying their visas, policies on undocumented benefits, DACA policies, and the pathways provided to obtaining documentation.