What is the value of a new job? It’s a pertinent question, given the coming transition to welfare reform and doubts about whether the city is generating too many of those “hamburger flipper” jobs.
One new job in Los Angeles County generates $4,753 in tax revenues for local government and schools, and $1,969 for the state government.
These are conservative calculations based on an “average” job, so for higher-skilled, higher-wage activities there would be a bigger dividend.
Conversely, the cost of losing one job in the county would be higher, since these tax revenues would disappear and increased demand would be placed on social service providers.
Creating new jobs in Los Angeles County is very important, because we are still 300,000 jobs below our previous peak. This is an important point to acknowledge, because California’s economy is really rolling which might give people the idea that we can throttle back on economic development activity.
But the bottom line is that economic development is still a critical activity for all areas in California. County and city governments face ongoing budget shortfalls, we still have not felt the real impact of welfare reform, and “business raiders” from other states are still busy prospecting in the Golden State.
Moreover, the turmoil in the business world will cost us more jobs in the future (witness the battle for Great Western Bank).
So we (all cities in the county) need to constantly review our business environment, and improve the product. We need to create a broad range of jobs, to accommodate all segments of our population.
We also have to aggressively tell the “true” story about Los Angeles County, and its rich potential. And we have to quickly create those 300,000 jobs.
Since one job equals $4,753, this would yield about $1.5 billion in sorely needed revenues for local government and education, and this would go a long way in solving many of our current problems.
Jack Kyser is chief economist with the Economic Development Corporation of Los Angeles County