Propel L.A. final report on LA County Strategic Plan for Economic Development shows progress on 7 goals, but equity lagging

 

The economic crisis caused by COVID has revealed a number of stark truths about diminishing economic inclusion and the income divide in LA County, but before recovery planning is complete, it is important to look at the goals our region had set leading up to the crisis, and take stock of how well those strategies worked.  In a new “Final Report” published by LAEDC about the 2016-2020 Strategic Plan for LA County Economic Development, implemented as “Propel L.A.”, the past five years of data were compared to the goals that our region’s communities collaboratively created to drive intentional focus and specific actions from 2016-2020 to drive desired outcomes.  The Strategic Plan was an effort to bring together business, education, government, labor, environmental, faith based and other community voices to define priorities, and the work on those priorities was collaborative with Propel L.A. championing continued action.  LAEDC led the public sessions and consensus-building process to publish the Strategic Plan, and it truly is, “by the people and for the people.”

The report finds that the Greater LA economy made significant progress in the five years leading up to 2020, with decreases in poverty (2.5%) and unemployment (2.2%) , increases in educational attainment (3% more Bachelors, 2.5% more HS degrees) and an increase in median income for area residents ($7,000), with fewer barriers for justice-involved people, jobs growth in the well-paying industries of LA County, with many more positive measures.

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Progress was measured across the seven goals chosen by the region’s people:

  1. Invest in our people to provide greater opportunity
  2. Strengthen our leading export-oriented industry clusters
  3. Accelerate innovation and entrepreneurship
  4. Be more business-friendly
  5. Remove barriers to infrastructure development, financing, delivery
  6. Increase global connectedness
  7. Build more livable communities

However, the regional economy failed to lift more people into prosperity, inadequately solved issues of equity and the growing wealth gap, and a rise in homelessness coupled with a deepening lack of affordable housing were evidence that many of Propel L.A.’s goals were not achieved; and additional measures showed where the region has lost ground.

Unemployment declined steadily from 2015-2019, improved by national economic trends but also by the local, intentional actions in support of the LA economy as outlined in the Strategic Plan.

Poverty rates declined across LA County from 2015-2019.

High school dropout rates have been decreasing, which is the first step towards greater earnings and opportunity for residents.

The percentage of county residents with a bachelor’s degree or higher went up from 29.9 percent (2014) to 32.5 percent (2018).  The percentage of residents with less than a high school education went down from 23.2 percent (2014) to 20.6 percent (2018).

Education level translates into higher earnings, so this is important for LA County standards of living.  A more educated workforce also attracts better paying jobs/employers.

The report’s findings utilize data through 2019, and many of the troubling outcomes were further amplified by the COVID crisis, during which our region’s lowest earners suffered greatest economic setbacks, people of color saw greater hardship and loss of jobs and businesses, and lack of internet access deepened the digital divide and further dimished opportunity for more widely shared prosperity.

The report also helps us understand what tools we have to change our future and help more people realize the LA Dream, such as the connections between education and earnings, the opportunity for LA’s key industries to create more inclusive career opportunity and support greater diversity, the role entrepreneurial assistance to improve inclusion. The report provides a raw assessment of where things have worked and where we have fallen short collectively as a community. In addition to helping us assess progress on equity and more widely shared growth, the report also helps us evaluate progress on resilience and sustainability.

Is LA County attracting the employers that will create jobs?  Generally, the number of businesses in LA County grew, creating more jobs.

A decline in the largest category of businesses is notable and reflects a concern about business-friendliness for large companies that can locate anywhere.

LAEDC is studying the impacts of the COVID crisis on business closures, and a significant percentage of businesses have shuttered in the county.  Therefore we can expect this chart to look dramatically different once 2020 data is available.

The progress made in the county during the Strategic Plan period to increase global networks, interactions, linkages, and transactions was significant. Between 2015 and 2019, the number of foreign-owned and/or -affiliated firms grew by 17 percent, from 4,367 firms to 5,113.  International business have recognized they need to be in Los Angeles, which has positive benefits.  For example, the number of workers employed by those firms also grew by double digit percentages: up 14 percent, from 177,427 jobs to 202,431 jobs (peaking in 2016 with 212,512 jobs), during the same period, as did the wages paid to those employees, which rose an astounding 52 percent between 2015 and 2019. (Exhibit 22) One signature example of the importance of foreign direct investment was the attraction, groundbreaking, and now scaling of the BYD electric bus and truck factory in Lancaster, which has created many hundreds of well-paying union jobs.

Los Angeles County continues to face a lack of housing availability at all price levels, and apartment rental costs have climbed across this period as well.