Job Creation Needs to be a Top Priority

There has been a lot of information in the news lately about jobs. Let me share some statistics with you.

Last month, the Los Angeles Economic Development Corp. (LAEDC) projected that job growth in this county would result in 346,000 new jobs between 2015 and 2020. That is in addition to the 469,200 jobs created since the rebound began in 2010. L.A. County led the nation with the largest number of jobs created during that period, according to the Washington, D.C.-based Economic Innovation Group.

That sounds pretty good until you learn that most of the new jobs we are creating pay below the median wage (which was $32,537 in 2014). The LAEDC report showed that the largest growth area would be in office administrators and food servers, which will add 93,000 jobs. By comparison, the county will gain only about 19,000 production and engineering jobs. The LAEDC said that Los Angeles may face a “brain drain” if it can’t figure out how to create more lucrative and advanced jobs.

I’m sure that you have read that L.A. has the largest gap in the nation between wages earned and the cost of housing. This is simply unsustainable. If we are to have a healthy economy, we must provide jobs that can sustain singles and families.

Joel Kotkin reported in an article entitled “L.A.: City of Losers?” that although our industrial job count of 363,900 is still the largest in the nation, it is down sharply from 900,000 jobs just a decade ago. He said that although the L.A. region is the number one producer of engineers in the nation, as many as 70 percent are leaving town to find work.

There are a lot of reasons for the decline in industrial jobs. One sector particularly hard hit has been Aerospace. In 1990, there were 130,100 Aerospace workers in this county. By 2010, employment in that sector had plummeted to 39,100 in the aftermath of the Cold War. And, in a sign of the times, some firms picked up and moved to Washington, D.C. to be closer to their funding sources. These were a few of the factors that resulted in this precipitous drop.

Of course there are other reasons as well. Some manufacturing moved overseas. Environmental regulations, taxes and the high cost of housing have made it increasingly difficult for some manufacturing concerns to operate here. We are not viewed as business friendly as many other cities and states. Frankly, there are valid reasons for those views.

Despite the bad news, there are also some positive signs for us on the jobs front. One of our most important employment sectors, entertainment, was hemorrhaging jobs until the State passed AB1839 two years ago which raised the incentives to bring filming back to California. Reports that I am hearing are that studios and stages in Hollywood are back operating at full capacity – something not seen in many years. Local residents who were having to go to places like Georgia, New York and Louisiana have been able to return home for work. The filming incentives have worked marvelously and will translate into thousands of middle-income jobs.

And there are new creative industries where L.A. is excelling. Mayor Garcetti, when he spoke to the Chamber last month, noted that L.A. is number one in new tech and green jobs. We need to find more niches where L.A. can produce jobs that will enable our residents to have an acceptable quality of life.

Earlier this month, it was announced that a Los Angeles-based coalition, the Smart Manufacturing Leadership Coalition (SMLC) had made the winning bid for the Smart Manufacturing Innovation Institute, from the U.S. Dept. of Energy. The institute will pool more than $140-million in public-private investment from universities and manufacturers to develop smart sensors for use in advanced manufacturing. We need more wins like this.

There is nothing that will solve the entrenched problems of poverty and homelessness more than the creation of good-paying jobs. L.A.’s natural advantages, including our unparalleled weather, respected research universities and think tanks, and some of the most creative people on the planet can help attract business. However, there needs to be a concerted effort by local governments to make the creation of median-wage jobs a top priority, rather than an after-thought. The days are long gone when we could depend on the weather alone to bring good jobs here.

That means more than just giving lip service. It means identifying areas for potential growth, listening to business leaders and then following through on their suggestions of how to attract their industries, investing to create an infrastructure to accommodate those businesses, and changing perceptions that we are not business friendly.

It is a tall order in a county with 88 different cities, but wouldn’t it be amazing if all 88 cities were working together to attract these jobs? If they did, we’d have a lot more good news stories to write.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

One thought on “Job Creation Needs to be a Top Priority”

  1. Hi Leron,
    I agree wholeheartedly with your article and its objectives. You failed to mention one of the biggest problems with bringing new industries to Los Angeles though. The high cost of housing in our City and Hollywood with rental vacancy rates hovering around 2.7% here.
    The Hollywood and Los Angeles Chambers, two of the most forward thinking groups in Los Angeles, must get behind ending the down zoning by the City’s Planning Department and City Council of the last fifty years.
    The City’s boulevards and other major streets and all need to be upzoned, ASAP.
    The highest hurdle for job creators coming to Los Angeles is the lack of equitable housing for prospective new employers, their family’s and worker’s.
    The business community must be at the top of the list of who the City’s agencies involved in housing developments consults with.
    That a relatively small number of persons in this City have had a stranglehold on housing development for the last fifty years can be attributed also to the ever growing numbers of persons without homes that you mentioned above.
    Sincerely,
    Bobby Peppey

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