LA Daily News reported on LAEDC CEO Bill Allen’s analysis of the economy at the Pasadena Business and Economic Summit, hosted by Pasadena Chamber of Commerce on October 24th. Read the full article summarizing the economic analysis at LA Daily News / Pasadena Star News HERE.
LA County’s economy is growing, but many of the job gains are low-wage positions
Los Angeles County’s economy is steadily growing, but income equality is worsening and many of the jobs the region has gained are low-wage positions.
That was a key takeaway from a presentation offered Tuesday by Bill Allen, CEO of the Los Angeles County Economic Development Corp. Speaking at the Pasadena Business and Economic Summit 2017 at the Pasadena University Club, Allen offered an outlook for the region that was encouraging, yet fraught with challenges. The event was sponsored by the Pasadena Chamber of Commerce.
Allen noted that the county’s gross domestic product — or total value of its goods and services — is estimated to be $751 billion this year, up from $556 billion in 2009. The region’s unemployment has also fallen dramatically. The jobless rate for September was 4.8 percent, well below the 13.2 percent spike that was seen in July 2009.
Moreover, all of the jobs that the county lost as a result of the Great Recession were recovered by 2015, Allen said, and wages have risen. When inflation is factored in, L.A. County’s median annual household income has declined. It was $61,333 last year, down from $64,127 a year in 1990.
“It’s a problem we have to deal with when the top 10 percent of our wage earners see their incomes grow when adjusted for inflation, while the vast majority see themselves falling behind,” he said. “We’ve added a lot of jobs back since the recession, but they’re low-wage jobs. And housing affordability continues to be a significant challenge.”
Allen displayed a chart showing that L.A. County has lost 90,000 manufacturing jobs since the recession began in late 2007. Those jobs paid an average of $52,000 a year. Meanwhile, the county added 90,000 jobs in the food service industry which pay an average of just $20,000 a year.
Allen also spoke of the “new economy” that leans more heavily on workers with higher levels of education. Employees in L.A. County with graduate degrees earned a median income of $71,716 a year in 2015, he said, while others with a high school or equivalent education earned a yearly median income of $27,063. Those with bachelors degrees earned an annual median income of $51,969.
Allen noted that people with higher levels of education are less likely to lose their jobs as a result of automation.
“Our unprecedented economic transition that’s going on nationally, globally and of course here in L.A. County and in Pasadena is requiring higher education and skill levels,” he said. “It’s the great transition from an industrial economy to a more knowledge-based, innovation economy.”
The LAEDC has developed a strategic plan that focuses on key industry clusters that are both primed for growth and also display the region’s areas of specialization. They include aerospace, the bio-medical field, entertainment, information and communications technologies, health care services, professional and technical business services and shipping ports and their supporting transportation activities.
“We need to constantly upgrade our skills to be able to compete in the 21st Century,” Allen said.
Eric Duyshart, Pasadena’s economic development manager, provided an update on new commercial developments in the city. He highlighted several, including ArtCenter College of Design‘s planned south campus and Huntington Medical Research Institutes‘ plan to combine its labs into a new facility on South Fair Oaks Avenue.
Tuesday’s summit also featured a panel discussion with Phil Hettema, president and creative executive of The Hettema Group; Don Lewis, CEO of EMR4Doctors.com; and Michael Shanklin, CEO of the Kidspace Children’s Museum in Pasadena.
They spoke of balancing ever-advancing technologies with consumer expectations. Hettema, who has worked in the theme park industry for 40 years, leads a team of experienced designers, architects and media producers.
“There really is a drive toward a more customized experience,” he said. “We work on the cutting edge of technology with virtual reality. But the bottom line is that anything we design will be obsolete within two years — guaranteed because it’s just moving so fast. So if we design a story first and create a great experience and a great way for people to connect with each other, even after the technology changes that will still be a great experience.”
Shanklin said Kidspace operates on a “kid-driven” principle that encourages learning in a hands-on environment.
“When a parent or caregiver sees that spark in a child’s eye, that child is immersed and they lose all sense of time,” he said. “We want to help that parent or caregiver define and nurture that, because when you are doing something you love you’re intrinsically motivated and you just drive — you go.”
Read more by reporter Kevin Smith: http://www.dailynews.com/author/kevin-smith/