L.A. County’s unemployment is at its lowest level since 1990, with an estimated 92,000 local jobs having been created this year alone.
But that does not begin to tell the whole story.
A look behind the numbers reveals a job picture that varies widely by geography and industry.
Some areas of the county, especially in coastal and upscale communities, have unemployment rates in the 2 percent range. Employers there are scrambling to find workers and “help wanted” signs are everywhere. But there are still pockets in L.A. that have double-digit unemployment, particularly in the poorer communities to the south and east of downtown.
Some industries (like construction, investment advisory services and software) are rapidly adding new jobs, while others (like aerospace, general manufacturing and motion pictures) are showing sluggish job growth or even contraction.
“There is a very mixed jobs picture in L.A.,” said Ted Gibson, chief economist for the state Department of Finance. “The focus of growth for the state has now shifted from the Bay Area to areas ringing L.A. But L.A. itself, which had the most severe problems during the recession, is growing right about the state average,” which is between 2 percent and 2.5 percent.
In times of rapid job growth, the fact that certain industries and areas grow faster than others may not seem so important. But the rate of job creation appears to have slowed in recent months.
For the 12-month period ended Jan. 31, the county’s overall employment base grew by 3 percent. But by October, even though the actual number of jobs in L.A. County topped 4 million for the first time since early 1991, the annualized growth rate had slipped to 2.3 percent.
Gibson and other local economists expect the job-creation rate to slow even further in 1999, as the effects of the Asian financial crisis continue to impact the region. With such sluggish overall growth predicted, areas and industries that have not benefited from the recent job boom risk getting left behind.
Perhaps no two communities better illustrate the disparities than Manhattan Beach and Bell Gardens. In Manhattan Beach, state figures show an estimated unemployment rate for October of 2.0 percent. That’s the second lowest of the county’s 88 cities neighboring Hermosa Beach has an unemployment rate of 1.6 percent and well below the 3 percent to 5 percent range pegged by most economists as the level of full employment.
(The state Employment Development Department, which tracks employment trends, does not actually count the unemployed at the city level every month; rather, it uses the 1990 federal census data as a base and extrapolates subsequent trends. This assumes there has been no substantial migration of businesses or residents into or out of a particular city.)
With such a low unemployment rate, employers in Manhattan Beach are having a tough time finding workers.
“We recently ran ads in La Opinion and two local newspapers and the response has been poor,” said Lynn Olson, co-owner of Manhattan Beach Bagel and Manhattan Bread Co. “This is a very, very tight labor market, much tighter than last year.”
Olson, who is chief executive of the Manhattan Beach Chamber of Commerce, said that other chamber members are also having a tough time.
“They are all having trouble finding people to delegate that work to. They are being forced to take on more of the work themselves, coming in on weekends and staying late at night,” she said.
In fact, labor markets are tight throughout the coastal regions, with places like Santa Monica, Culver City and Rancho Palos Verdes all having unemployment rates between 3 percent and 4.5 percent.
In Beverly Hills, chamber Chief Executive Rolfe Arnhym said the city’s labor market has become noticeably tighter in recent months.
“Normally at this time of year, all you hear about is how difficult it is for retailers to find people,” Arnhym said. “But this is not just about retail. The entertainment industry, the legal community, and other types of businesses all have entry-level worker positions that need to be filled.”
In Bell Gardens, the picture is quite different. The extrapolated EDD figures show an unemployment rate of 11.7 percent, second highest among L.A. County cities to Compton’s 12.5 percent. (Some communities within the city of L.A., such as the Florence-Graham area in South Central, have unemployment rates of up to 14 percent.)
Bell Gardens City Manager Nabar Enrique Martinez said the city’s job picture has not improved over the past year, noting that the Bicycle Club Casino, one of the city’s biggest employers, recently laid off some workers.
“Most of our businesses are service-oriented. They rely on the disposable incomes of the people who live and work here. And the income levels have not been rising, so it’s tough for them here,” Martinez said.
Part of the problem is that the available jobs are so far away from the available workers.
“Two-thirds of our population are tenants, many of whom are on the first rung of the economic ladder,” Martinez said. “They are highly migratory. The key question we are facing is, how do we get these people to the outlying areas like Thousand Oaks or the Westside, where the jobs are?”
No easy answers exist to that question, since many of L.A.’s unemployed are not able to afford their own cars and the area’s public transit system is so unwieldy.
The situation is only slightly better in the city of San Fernando, which has an unemployment rate of 8.4 percent.
After a late-summer slowdown in hiring, firms there have recently begun staffing up again, according to Scott Schmidt, who runs a job-match program for the Greater San Fernando Chamber of Commerce. However, the supply of new jobs is far less than the number of people seeking work.
“In any given week, about 10 to 20 job openings are posted with us,” Schmidt said. “But we usually have more than 100 people coming in and looking for jobs. And that doesn’t count those who don’t search through the chamber.”
Overall, the hottest sector of the L.A. economy is construction and construction-related services, like building supply stores. The construction industry has been growing at a 4.3 percent clip for the last 12 months, with the fastest growth rate (6.7 percent) being in heavy construction.
“In the last six months, we have experienced a great surge in work,” said Jerve Jones, chairman of Los Angeles-based Peck Jones Construction. “We’ve been in a hiring mode for the last seven or eight months, which comes after several years of downsizing.”
Ironically, Jones said, many of the people being hired are actually former Peck Jones employees who have since moved out of the area, to places like Las Vegas and Phoenix.
“We are trying to lure them back,” Jones said.
Just as hot as construction is the technology sector, specifically anything having to do with multimedia or the Internet. The state does not break out software or Internet-related jobs, but most of these positions are included under business services, a category that has a 6.7 percent annual job growth rate, three times the countywide rate.
The other tech categories are communications equipment, with an annual growth rate of 4.4 percent, and electronic components, which has stayed flat over the last year.
Don Baarns, who recently started Internet software company Baarns Consulting Group Inc. in the San Fernando Valley, said he is having trouble finding qualified workers to add to his staff of 11.
“Some lack technical training and others lack the business skills to compete,” he said.
Baarns is also president of the L.A. chapter of the Association of Internet Professionals, which just launched an online job bank a couple of months ago.
“We had over 100 companies post openings in the first three weeks,” Baarns said. However, far fewer potential employees have tapped the job bank, he said.
“There is an imbalance here: More companies are looking for workers than the other way around,” he said.
A different scenario is emerging in the entertainment industry, which for so long has been one of the main drivers of the local economy. The industry lately has been contracting, losing 1,700 jobs, or 1.2 percent of its total workforce, in the last 12 months.
“There has been a lot of consolidation at the studios and the whole industry has really been hurt by the Asian financial crisis,” said Ross DeVol, an economist with the Milken Institute in Santa Monica.
L.A.’s manufacturing sector also has been sluggish, adding only 10,000 jobs between October 1997 and October 1998, for a growth rate of 1.6 percent. Durable goods manufacturing, which includes those products designed to last more than three years (appliances, aircraft, furniture, etc.), has been especially hard hit, growing a meager 0.8 percent in the past year. Not surprisingly, aircraft manufacturing employment dropped by 1,200, or nearly 2 percent, over the last year.