Southern California is being battered by two distinct economy downturns, a local economic analyst argues, and in some important ways has not yet fully recovered from its early 1990s doldrums.
The Los Angeles Economic Development Corporation's Jack Ryser isn't optimistic about the near term prospects for our economy, as reported in the Los Angeles Times. Ryser
points out a startling fact: In Los Angeles County, according to state statistics, fewer people are employed now than were when jobs hit their high-water mark in 1990.
In March of 1990, he said, almost 4.2 million county residents had jobs. As of last April, the last month for which statistics have been released, a little more than 3.9 million Angelenos were employed. In the 19 years in between, the county's population grew by more than 1 million people, but job levels did not follow suit......
The slump of the 1990s differed from this one. Then, the dramatic downsizing of the aerospace industry, in Southern California in particular, joined with the 1992 Los Angeles riots and the 1994 Northridge earthquake to bring the economy to its knees and house prices to the basement. This time around, the death spiral has been broader, with a whole host of sectors collapsing. International trade dried up, slamming the state's ports; the movie industry took off for places willing to pay for glitz; and the bursting of the housing bubble and the credit markets leveled what was left.
Although Kyser predicts that a slow recovery will start before the end of the year, he remains troubled by what has yet to come back from the previous downturn. In short, manufacturing jobs.
In April 1990, according to state statistics, Los Angeles County had 824,700 manufacturing jobs. Now it has fewer than half that -- 400,600. ["State Needs to Bounce Back from Two Recessions," L.A. Times]
Later in the Times article, another analyst predicts service jobs for an aging population will be the next growth sector for employment in L.A., which may or may not make anyone feel better about the area's prospects.
The web site for Ryser's organization, the L.A. Economic Development Corporation.
From the Sacramento Bee, a fascinating and depressing interactive chart showing when economic analysts expect American metro areas to recover from the recession. According to it, L.A. is not expected to reach pre-recession job levels until 2014...or beyond.
The image associated with this post was taken by Flickr user RodneyRamsey. It was used under user Creative Commons license.
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If Los Angeles—and California as a whole, for that matter—truly is the canary in the coalmine of our nation, as many suggest it to be, then Brian Doherty’s article presents many a troubling truths about the future of our nation’s struggling economy. While our once proud manufacturing industry seems to be declining into an abyss, the ascension of both the financial sector and real estate market to national prominence has all too clearly displayed the fundamental shift of the US from a country that once produced ‘stuff’ to one that now almost wholly relies on its ability to manipulate symbols—whether that be currency or land—to our competitive advantage. No wonder the service sector is on the rise. If the business of making money has now been limited to the manipulation of money, doesn’t it seem we are doomed to become a nation simply cleaning the shoes and cutting the hair of our financial big wigs? More than all else, has this crash not signalized our dependence on these industries of empty value? Until the citizenry realizes that we cannot wholly rely on real estate and stock markets for economic growth, any talk of entering a new age in American history is just hot air.