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Wednesday, Feb 28, 2024

Manufacture

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By BENJAMIN MARK COLE

Senior Reporter

After nearly a decade of getting hammered, industrial employment in Los Angeles County appears to be building again.

Total manufacturing employment in February reached 653,000 in the county, up 2.4 percent from a year earlier, according to state statistics.

The revival of factory employment in Los Angeles County is unalloyed good news for the local business scene, economists say.

In general, each factory job creates another one to three collateral jobs in warehousing, trucking, administration and other fields, say economists.

“That is what we economists call the ‘multiplier’ effect,” said Esmael Adibi, economist with Chapman University in Orange County. “Manufacturing jobs are basic to the economy.”

Further, when factory output goes up here, goods are exported to other regions and countries. That brings money here, in the form of factory worker wages, and owner’s profits.

In turn, workers and owners spend on rent, housing, groceries and other goods and services, boosting the whole economy.

Some local manufacturers are reporting their best years ever, after the defense-related slump in the early 1990s.

George Industries Inc. in east Los Angeles is perhaps typical. The 45-year-old company prospered for decades as a finisher of aluminum products, primarily in defense-related work.

But in the early-mid 1990s, it found business waning for its services, including its mainstay work, the anodizing of aluminum, said George Gering, company founder and president.

It sought broader markets, and began anodizing aluminum shell flashlights, and sporting goods, such as tennis racquets and bicycles.

This year, “business is up 25 percent from last year, and last year was a record year,” said Gering. He has hiked employment to 365, from 300 in the early 1990s.

Another positive is that aerospace employment, crunched hard in the 1990s as the Pentagon cut back, has flattened out and there may even be some minor good news ahead, say economists.

“Defense industry spending cutbacks, which started in the late 1980s, hit us disproportionately hard. But now the spending on equipment is building up,” said Adibi.

Some observers are not thrilled with the relatively heavier weighting of non-durable goods manufacturing to durable-goods manufacturing jobs that has occured in Los Angeles County in the 1990s.

(A durable good is one expected to last three years or more, such as a toaster, and a non-durable is a product expected to wear out or be consumed, such as clothing or food.)

In 1987, a full two-thirds of factory jobs in the county were in plants producing durable goods, but now just over half of the factory jobs are in durables.

In general, durable-goods manufacturing jobs such as aircraft, automobile, and equipment require more skill and pay more than jobs in non-durables, which include apparel and food processing.

In Los Angeles County, the average durable manufaturing job pays $13.75 an hour, compared with $10.73 in non-durable manufacturing.

In aircraft factories, the typical production job pays $21.52 an hour; in a garment shop, the reported average wage is $7.65, according to the state Employment Development Department.

“You don’t have to put a fine point on it. We have lost aerospace jobs, and we are adding apparel jobs,” said Goetz Wolff, professor at the UCLA School of Public Policy. “And apparel jobs pay far less.”

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