Big data is coming to economic development efforts for Los Angeles City Council districts, thanks, in part, to the Los Angeles Area Chamber of Commerce.
Councilmembers have had a tough time getting a detailed inventory of employment and business trends in their districts until now. They often have relied on anecdotal information and visits with individual businesses, supplemented with scattered bits of citywide or countywide economic data.
Next week will yield the first in-depth economic profile of a city council district commissioned by the chamber. The report is slated to be officially unveiled as part of the chamber’s annual lobby day.
The district chosen – No. 10, represented by City Council President Herb Wesson − slices through parts of central and South Los Angeles and Koreatown, generally straddling the 10 freeway.
“Economic development efforts have been largely in the realm of ‘witch-doctory’ for a long time,” said Christopher Thornberg, economist and co-founder of Westchester-based economic consulting firm Beacon Economics, which compiled the Council District 10 report for the chamber. “It’s been a bunch of folks who were well-meaning but didn’t have the data to test their hypotheses because highly localized data has been so hard to come by.”
Thornberg said his firm’s report is the first attempt he is aware of to bring big data techniques to such a granular level in any major metropolitan area in the nation. The 37-page report drew on data from the U.S. Census Bureau and other federal agencies, as well as the state Employment Development Department and, for the first time, the Los Angeles city Economic and Workforce Development Department.
Among the report’s various findings is an average wage of $45,859 for workers in Council District 10 last year compared with $65,651 average in the rest of the city.
Also noted: the size of businesses in the district skewed significantly smaller than the rest of the city, with 30 percent of employees working at firms with fewer than 15 employees, compared with 22 percent for the rest of the city. The report found that 14 percent of employees in the district work at firms with more than 150 employees, compared with 31 percent for the rest of the city.
“Reports like this should help decision-makers in council districts understand better the economic base in their districts and find out with real data which policies and projects are succeeding and which are not,” Thornberg said.
Deeper dive
Beacon has for the past decade compiled annual reports for the chamber, giving broad two-page employment overviews for each council district. Those reports were unveiled at past chamber lobby days at City Hall, and councilmembers often claimed bragging rights if their districts gained the most jobs over the previous year.
Last year, though, Beacon launched this more detailed data gathering effort at the urging of then-chamber board chairman Steve Nissen, senior vice president of legal and government affairs for NBCUniversal, which has footed most of the bill for this report. Thornberg said the report cost “significantly less than $50,000.”
Maria Salinas, the chamber’s new chief executive, said having such a detailed data trove for a specific council district will help lawmakers and others there make more sound choices on policy and economic development matters.
“Having such timely data about economic factors within their districts will enable councilmembers and other decision-makers to be more informed about the decisions they make,” she said.
Salinas noted decision-makers beyond City Hall – especially members of neighborhood councils and planning boards – could tap into the data to help when considering the merits of development projects.
Thornberg added that having such detailed data on hand means councilmembers won’t have to rely as much on the current practice in economic development decisions of responding to whichever side “tells its story the loudest.”
Salinas said that by presenting this report to the full City Council on the chamber’s lobby day next week, she hopes other councilmembers will express interest in similar deep-dive reports in their own districts. That rollout will also depend on the chamber’s ability to convince major businesses in those districts to help foot the bill.
Economic challenges
The Council District 10 report paints a mixed picture, according to Taner Osman, the Beacon research manager and the report’s principal author.
“The good news is that employment levels in the district have surpassed their pre-recession peak and that employment growth has been faster than in other districts,” Osman said, noting private-sector employment in the district topped 66,800, about 5,000 jobs more than in 2007.
The more challenging news, he said, is that the growth has been concentrated in a few lower-wage industries, such as leisure/hospitality and retail. Higher wage industries in the district, such as entertainment and professional/scientific services have either grown more slowly or registered drops in employees over the past decade.
“Income levels and wages paid by employers are lower than the rest of the city, and that presents a challenge to policymakers,” he said.
Wesson said after reviewing the report that it points to the need to diversify the job and industry mix in the district. He pointed to recent trends on the western edge of the district, bordering Culver City.
“We’re seeing an uptick in investment from the movie and computer coding industries in that area,” he said. “Maybe not enough yet to really move the needle throughout the whole district, but it’s happening.”
