Public Sector Outworked Private in Job Creation

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Over the past year, Los Angeles County’s biggest private-sector employer, Kaiser Permanente, saw its local workforce shrink by a couple of hundred employees. Meanwhile, the largest public employer – Los Angeles County – grew its ranks by more than 1,800.

That’s illustrative of a trend throughout the Business Journal’s lists of the largest public- and private-sector employers in the county: Over the past year, public-sector employers have been hiring workers at a faster pace than private-sector employers.

The 25 largest private-sector employers on this year’s list added 3,561 jobs over the past year, an increase of just 1 percent. Meanwhile, public-sector employers, including cities and school districts, swelled their ranks by 16,533, an increase of 4 percent.

That doesn’t surprise Gary Toebben, president of the Los Angeles Area Chamber of Commerce. He said private employers are more likely to add jobs only after they’ve tried to increase the productivity of existing workers. What’s more, he said this year’s figures continue a long trend of faster employment growth among public employers.

“The general trend for several decades has been that large governmental entities added a higher percentage of new jobs than the largest employers in the private sector,” he said.

What’s more, he noted that the largest employers, whether public or private, account for only a fraction of the county’s overall employment – and an even smaller proportion of hiring activity. So while the biggest private employers aren’t hiring at a brisk pace, that’s not necessarily the case for smaller firms.

“The largest number of new jobs in the private sector are usually created by small and medium-sized businesses,” he said.

Indeed, figures released earlier this month show the county’s unemployment is now down to 7.1 percent, down from 8.1 percent in July of last year.

Economist Christopher Thornberg, founding partner of L.A. consulting firm Beacon Economics, said rising local employment figures point to momentum in the local economy.

“Opportunities in Los Angeles County are the best they have been in 20 years,” Thornberg said. “The economy is doing great and we’re filling in a big part of the hole left by the Great Recession.”

What’s more, Thornberg said Angelenos shouldn’t be concerned by the fact that government payrolls appear to be growing faster than private-sector ones.

Over the past year, government payrolls in the county gained 14,500 jobs for a growth rate of 2.8 percent. That’s a slightly faster clip than the 2.6 percent growth rate for all jobs in the county over the past year.

As government budgets have stabilized, agencies have been able to bring back positions cut during the recession and ensuing budget crisis, accounting for some of the public-sector growth.

“The private sector is still growing at a pretty healthy rate and is only modestly behind,” Thornberg said. “These are encouraging numbers.”

Movers

The biggest rise in private-sector employee numbers came from AT&T Inc. The Dallas telecom giant’s local head count jumped to 11,700, up from 8,900 last year. But that leap came thanks to the company’s July acquisition of El Segundo’s DirecTV, which added 2,800 Los Angeles County employees to AT&T’s ranks.

UPS also added a bevy of workers and climbed up the local employer charts. It ranks No. 9 this year with 10,768 workers. Last year it ranked 13th with fewer than 9,000. The continued growth of online shopping has been a boon for the Sandy Springs, Ga., company, which delivers more than 15 million packages a day to customers in 220 countries.

The biggest drop in employee numbers among the county’s biggest private employers came from Albertsons Cos. Inc., which operates under the Albertsons, Vons and Pavilions brands here. The grocery chain cut its workforce from 11,211 to an estimated 10,200.

That’s likely thanks to the sale of several of the chain’s grocery stores to Washington state chain Haggen. Federal regulators ordered Albertsons and grocer Safeway to sell off stores to a competitor as part of a merger that closed in January.

Burbank entertainment giant Walt Disney Co., , with an estimated 10,200 local workers, remains the largest local employer in the entertainment industry well ahead of Warner Bros Entertainment Inc., which employs 7,400.

The largest public-sector employer in the region, with 105,503 local workers, remains Los Angeles County. In second place is Los Angeles Unified School District, which has 59,563 employees. The district was one of the few public-sector employers to cut its head count. The district now employs 59,563, down about 600 from last year.

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