Labor market risks of a magnitude 7.2 earthquake in the San Francisco Bay area: an update and extension

The Hayward Fault runs directly through the heavily populated Alameda, Contra Costa, and Santa Clara counties. These three counties, and nearby San Francisco County, are the four most exposed counties in the region, in terms of potential damage, from earthquakes occurring on the Hayward Fault. The fault underlies a populous urban area, principally in Alameda County, and extends 74 miles along the eastern San Francisco Bay. Five other counties—Marin, Napa, San Mateo, Solano, and Sonoma—are further from the Hayward Fault but would still suffer some damage from an earthquake originating from the Hayward Fault. Combined, the 9 counties cover a 7,200 square-mile area and contain 6 million inhabitants, 320,000 business establishments, and 3.6 million jobs. As reported in a previous article, the Hayward Fault is known to generate a damaging earthquake every 150 years. The last event, which occurred in 1868, is now known as the “Hayward Earthquake.”

The magnitude 7.2 earthquake scenario used in this analysis is a more powerful hypothetical natural disaster scenario than the magnitude 6.9 event analyzed in the 2007 BLS article and the magnitude 6.8 event explored in the 2016 BLS article. While a nominal increase of 0.3 or 0.4 magnitude may not seem large, such a slight increase represents roughly double the geographic area of a magnitude 6.9 earthquake, with 2.8 times the strength. Thus, care should be taken when comparing nominal values from this analysis to previous articles, especially if one does not consider natural population growth, consequent employment growth, and inflation. In addition, the wide difference in strengths from slight changes in magnitude should warn readers that earthquakes at a magnitude of 7.2 do not cause uniform damage across the affected areas. In other words, the actual losses of a Hayward Fault earthquake may be less, or greater, than the estimates in this scenario. Still, while the Hayward Fault presents the clearest threat, it is not the only potential source of an earthquake.

In addition to the Hayward Fault, multiple fault lines, including the San Andreas Fault, the Calaveras Fault, and the San Gregorio Fault, run through or are adjacent to the bay area. An earthquake originating from any of these fault lines could also cause significant economic losses. Figure 1 showcases the geographical location and the respective probabilities that each of these fault lines could be an earthquake originator.

Of the multiple fault lines shown above, the most noteworthy is the San Andreas Fault line. While the San Andreas Fault line only has the third-highest probability of being the source of an earthquake, it runs through the San Francisco Peninsula rather than through the East Bay.

Would an earthquake along the San Andreas Fault line have more severe consequences than one originating from the Hayward Fault line? This article analyzes and compares potential economic damage for earthquakes originating from the Hayward and San Andreas Fault lines.