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Monday, Oct 2, 2023

INSIDE VIEW–Despite Current High-Tech Growth, L.A.’s Rocky Past Won’t Die

Dissed Again

Nearly a decade after the riots and the worst of the recession, Los Angeles continues to stand on the outside looking in. Despite a relatively robust local recovery and the lowest unemployment levels in nearly a generation, L.A. continues to rank near the bottom both in public perception and in most national rankings.

The most recent dissing came in Forbes magazine, which ranked L.A. 123rd out of 200 U.S. metropolitan areas as a high-tech growth center. All this despite the region having emerged as the third leading venture capital center in the country, with an Internet and high-tech infrastructure that, by such measures as the number of domain names or tech employees and companies, equals or surpasses virtually every other region.

The key to this peculiar dichotomy, notes Ross DeVol, top regional economist at the Milken Institute, lies in the region’s past. The massive aerospace recession that gripped L.A. in the early and mid-1990s stole away a large piece of its high-tech infrastructure. After stabilizing in the late 1990s, the aerospace decline now appears to be happening again. This, DeVol suggests, has eroded some of the growth numbers Los Angeles has enjoyed in other fields, notably in e-commerce and venture capital.

“Los Angeles still carries the baggage from the early 1990s,” DeVol notes.

A troubled recent past

But it’s not only the aerospace bust that leads to negative perceptions of Los Angeles. The 1990s legacy of riots, earthquakes and fires has resulted in a continuing loss, albeit at a slower rate, of educated, middle-class people. High-tech firms tend to cluster in places such as Austin, Texas; Boulder, Colo.; and San Diego that are more attractive to these kinds of people.

Indeed, even L.A.’s population growth largely consisting of immigrants may further exacerbate this problem. Many of the new immigrants, although often hard-working and family-oriented, do not have the kind of skills many information-age companies require. And as long as the education of their youngsters is in the hands of incompetents at the Los Angeles Unified School District, the hope for a turnaround remains somewhat doubtful.

“L.A. can’t come up in these surveys unless these people get skills, and although it’s politically incorrect to say this, the people coming don’t have them,” DeVol said.

One solution to this problem, of course, is a traditional one: Import the brains from somewhere, preferably where the weather and topography are not as attractive. Los Angeles, in fact, has always lived on such people look at the number of New Yorkers, Detroit natives and Chicagoans on the Business Journal’s recent Richest Angelenos list, for example.

In the 1930s and 1940s, key growth eras for Los Angeles, much of this fresh, aggressive population came from the Midwest. Some came poor and picked fruit, others were skilled, and many manned (and later womanned) the defense plants.

No state was better represented in this domestic immigration wave than Iowa. The transplanted Iowans once were so numerous that they used to call Long Beach “Iowa by the Sea.” In some cases, it wasn’t whether you were from Iowa, but what county. For generations, the Hawkeye state deposited much of its brain power, entrepreneurial savvy and muscle here.

But that’s no longer the case, suggests a disturbing recent survey in the Des Moines Register. The state, whose public education ranks near the very top in most national surveys, continues to lose its young, talented and aggressive population, but Los Angeles no longer looms large in their dreamscapes.

Anywhere but L.A.

Indeed, according to the Register poll, Iowa college students rank a lot of places higher than Los Angeles as preferred places to live and work. Some are more familiar Midwestern cities, such as Minneapolis and Chicago, both of which have developed fair information-age economies. But others high on the list are not exactly next door Denver, Seattle, New York, Portland, Ore. and Washington, D.C.

In contrast, only about 9 percent of these students rank Los Angeles as an “excellent” place to live and work. That puts the Big Orange on the level of such thrilling metropolises as Kansas City, St. Louis and fellow perceived dysfunctionals like Miami.

“Students are going to places where they perceive there’s a lot of opportunity,” observes demographer Bill Frey. “They go to places like Denver that have good media, even if there may be much more to do and more opportunity in Los Angeles.”

But this is not the worst of it. If other cities do as badly as L.A. in terms of “excellent” ratings, we stand virtually by ourselves as a place that is considered “poor” for human habitation. In fact, nearly one in five in the Register survey considered Los Angeles in the lowest possible category, worse than such troubled places as Washington, D.C., Miami and even that frozen center of urban civilization, Fargo, N.D.

Frey sees much of this as the work of the East Coast-dominated media. “A lot of it is what people read and see on television,” he suggets. “You live in Iowa and everything bad you see is happening in L.A. It makes the place less alluring.”

Put these two surveys together and you have a picture that isn’t very pretty. A Los Angeles that is unattractive to outsiders and unable to educate its native-born population is not likely to make it into the first rank of cities in the information age.

This issue of our adjustment to the information age not the Rampart scandal, promoting “ethnic diversity” or even dissolving the city should be the dominant one as L.A. leaders try to plan the future for the region in the new century.

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