LA's Missing Workers?
Quote of the Week
“I tend to think that most fears about A.I. are best understood as fears about capitalism. And I think that this is actually true of most fears of technology, too. Most of our fears or anxieties about technology are best understood as fears or anxiety about how capitalism will use technology against us. And technology and capitalism have been so closely intertwined that it’s hard to distinguish the two.”
Where are LA's Missing Workers
Behind Los Angeles County's low unemployment rate of 4.4% lies a mystery, LA's missing workers. Back in the fall of 2013 LA's labor force reached 5 million workers for the first time in its history. It ultimately peaking at 5,265,500, in February of 2020.
Today the number of workers is down to 4,927,700, which means there are approximately 337,800 fewer eligible workers since the start of 2020. At the same time there are approximately 470,000 jobs that remain unfilled.
At the national level new research from Raj Chetty pinpoints a lasting economic scar from the pandemic: Low-wage workers in high-cost areas aren’t returning to the labor force.
His tracker shows metrics like job listings, consumer spending and small business revenue surging back above January 2020 levels, but the US is still missing about a fifth of its pre-pandemic low-income workforce.
The good news is that some of those workers moved to higher-paying jobs, but, after adjusting for wage growth, researchers found employment for the poorest quarter of the workforce was still 13.5% below pre-pandemic levels at the end of 2021.
As I have pointed out in my past writings, Raj shows that the hardest-hit businesses were in the richest neighborhoods and region's with the highest-rent rates. In areas like Boston’s Back Bay, New York’s Upper West Side and Brentwood in Los Angeles, the pandemic and its aftermath have thrown into chaos the lives of millions of employees who once waited on the wealthy in restaurants, bars, gyms and hair salons.
Data does show that many Angelenos used this opportunity to head to states like Florida, Texas and Georgia for cheaper housing, jobs and to join family. California’s biggest recent population losses have been in Los Angeles County (113,048) and low and middle-income Californians are most likely to leave.
To reverse this trend, LA's leaders need to focus on a economy & jobs agenda that helps Angelenos get back into the workforce, starting with ways to incent, not tax, developers to build more affordable housing near good jobs. (See below LA's two main housing challenges)
And increase the region's labor force participation rate, which is the lowest it has ever been in three decades, especially for young men and women.
It is up to local government and businesses to creative a better strategy for bring workers back, and to implement policies and programs that support LA's growing small business community.
The good news is that the County's economy is diversified, with top industries ranging from logistics to entertainment to aerospace. And employment in certain industries - transportation, healthcare and construction, are growing year over year.
The challenge is more than 40% of LA County residents have not attained education higher than a high school diploma.
Some preliminary research shows that with the right skills, these Angelenos could access 32 in-demand occupations that pay a living wage and do not require advanced education. There are 250,000 jobs open now and pay a starting median salary of 35 to 50K. These include the following seven industries:
Business and Finance
Engineering and Architecture
Healthcare
Legal
Skilled Trades
Technology
Transportation
The LA Coalition has been working with McKinsey, and a number of Coalition members for the past year to address these challenges and we have narrowed our focus on advancing three initiatives:
Rapidly upskilling LA’s workforce via a Pay It Forward Fund
Enabling Angelenos to move into well-paying jobs via skills-based hiring
Retaining college students through paid internships, marketing, and other supports
If you would like to learn about any one of these please contact me at michael.kelly@thelacoalition.com.
Big-City GDP in 2023: Who’ll Grow, Who’ll Falter and Why
The UNC Kenan-Flagler Business School's American Growth Project recently projected that projecting for 2023 economic activity for the 50 largest Extended Metropolitan Areas in the U.S., more than half of these cities are expected to have positive GDP growth.
Cities at the top show strong economic fundamentals, such as emerging industries and positive migration inflow.
Despite the woes of the tech sector, San Francisco remains our fastest-growing city, with expected growth of 3.0% in 2023 – largely due to the power of productivity. Yet it is also experiencing one of the biggest slowdowns in the country, alongside other tech-heavy microeconomies such as Austin, Denver and our very own Research Triangle.
The not so good news...LA is pretty far down the chart.
The Power of Productivity: 2022's Winning Cities and Top Gainers, Ranked
Another report from the American Growth Project examined the productivity levels of the 50 largest microeconomies in the United States along with how those productivity levels have shifted during the last 15 years.
San Francisco was one of the most productive cities in 2007, though, perhaps surprisingly, Hartford was the nation’s most productive microeconomy at that time.
As the technology sector exploded during the next 15 years, the Bay Area’s productivity pulled ahead of the pack and now leads the rest of the country by a substantial margin.
Other findings offer important context and even run contrary to dominant media narratives. Cities commonly portrayed as being in a state of decline, such as New Orleans and several microeconomies within the Rust Belt, have transitioned away from less productive sectors toward areas such as technology and advanced manufacturing.
This sectoral shift has led to tremendous productivity gains for these cities, which may indicate that they are gathering momentum for a comeback. By contrast, cities such as Las Vegas and Tampa have struggled to recover from the damage wrought by the collapse of the housing sector and the COVID-19 pandemic, both of which have greatly hampered their productivity.
Good new...LA is showing signs of productivity growth.
Leadership in the Community
University leaders are convening for the L.A. Governance Reform Project to research and develop independent proposals for L.A. City structural reform.
Recent controversies at L.A. City Hall, including revelations surrounding the most recent redistricting process, have brought the need for structural reform to the fore. A team of leading Los Angeles university scholars, researchers, and leaders has come together to develop independent City of L.A. reform proposals that will advance transparent, accountable, and community-driven governance.
The LAGRP’s first task will be to produce policy recommendations for an independent redistricting process to be presented to policymakers in the coming months. Following the completion of this first stage of the LAGRP, the university team will turn to other areas, including but not limited to council expansion, ethics, and land use reform. The LAGRP will issue updates on its work in the coming weeks and plans to be in operation throughout 2023. The University Leadership Team members are:
● Fernando Guerra, Ph.D., Professor of Political Science and Chicana/o Latina/o Studies, Director, Center for the Study of Los Angeles, Loyola Marymount University
● Ange-Marie Hancock (Co-Chair), Ph.D., Dean’s Professor of Gender Studies and Political Science, University of Southern California (on leave)
● Boris Ricks, Ph.D., Associate Professor, Political Science Department, Director, Center for Southern California Studies, California State University, Northridge
● Sara Sadhwani, Ph.D., Assistant Professor of Politics at Pomona College, Commissioner, California Citizens Redistricting Commission, Senior Researcher, AAPI Data
● Gary Segura (Co-Chair), Ph.D., Professor, UCLA Luskin School of Public Affairs
● Raphael Sonenshein (Administrator), Ph.D., Executive Director, Pat Brown Institute for Public
Affairs, Professor of Political Science and Public Administration, Cal State L.A.