SOUTHERN CALIFORNIA JOB MARKET : A SPECIAL REPORT ON EMPLOYMENT TRENDS : INDUSTRIES & OCCUPATIONS : HIGH TECH : JOB MARKET BEGINS TO THAW
Last month, when an Anaheim electronics manufacturing plant eliminated some overlapping jobs, a 30-year-old materials handler was one of the unfortunate workers receiving a pink slip.
But within a week--and even before his vacation and severance benefits had expired--the fellow had been hired to requisition supplies at a nearby competitor. “I didn’t even have to look all that hard,” he laughs.
Sheer luck? Probably not.
After two dismal years, Southern California’s high-technology job market has thawed and is starting to show signs of renewed life. Still, the experts caution, the news is nothing to get too excited about--yet.
“From all we can see, the market is getting better,” says Jeanette Garretty, vice president and senior economist for Bank of America in San Francisco. “Orders have picked up, and it looks like we’re going to see a few years of improved sales and profits.”
However, Garretty and other economists note that the immediate hiring sprees that such sales increases have sparked in the past aren’t likely to occur. Instead, explains Philip Vincent, senior economist for First Interstate Bank in Los Angeles, employment increases will probably be gradual, lagging far behind any sales and profit rises.
For example, despite what business leaders describe as improved order rates, total high-tech employment in Los Angeles County in July, 1987, stood at 143,000, compared to a monthly average of 143,500 during 1986. In Orange County, the same report from the state Department of Employment Development shows that the technology and aerospace employment total has declined in 1987 to 93,800 from 95,000 last year. (High-tech industries include computer hardware and software, telecommunications equipment, semiconductors and electronic instrumentation.)
Nationwide, the American Electronics Assn. reports that high-tech employment stood at 2.47 million earlier this year, about 70,000 less than the year before. But that level has held steady, association spokesman John Hatch reports.
“The industry is poised for a spurt,” he says. And new job growth isn’t very far off.
“Chief executive officers want to make sure that the order increases aren’t a temporary fluke before they commit themselves to increasing the labor force,” Garretty says. “They can’t afford to make any more mistakes, so they are postponing increasing their labor forces as long as they can.”
The reasons for the cautious revival in high-tech employment stem from the lessons that the industry learned in the severe decline of the last three years. When the downturn hit in full force in late 1984, the industry--from chip makers to computer systems houses--was caught at the height of an unprecedented boom and was unprepared for the steep and painful descent that awaited.
In the future, analysts foresee greater emphasis on automated manufacturing operations, continued exporting of assembly jobs to lower-cost offshore factories, and increased demand for improved employee productivity.
But while these measures will be used as buffers to moderate the once-wild peaks and valleys in employment levels, they cannot replace job growth entirely. In fact, analysts say that the latest job spurt is just now starting and should register in official tallies by early 1988.
Most often cited as evidence of the revived job market are the growing numbers of help-wanted advertisements in newspapers and trade journals.
Industry executives confirm the trend. For example, at AST Research Inc., an Irvine electronics maker, the job openings list posted in the main lobby has grown from 1 1/2 pages to nearly 2 1/2 pages since the beginning of the year. Employment at AST’s main plant, where the company recently began building personal computers, has jumped 50% to nearly 1,000.
Unlike previous upturns, the predicted job growth is more likely to be limited to specific industry segments than in previous years.
In addition to the aerospace industry, which remained fairly strong in Southern California throughout the high-tech crash of 1985-86, economists are predicting a strong market for computers, telecommunication equipment, electronic medical devices and software operations. The market is not expected to be as strong for generic computer chips and electronic instrumentation.
Throughout all segments of the high-tech industry, the No. 1 demand is still for software engineers, a job classification that has felt little, if any, effects of hiring cycles. Analysts say that they expect jobs for software engineers to increase 20% over the next few years. Computer scientists are close behind on the most-wanted list, followed by electrical engineers.
Renewed hiring is expected to be the most sluggish on the assembly line, where blue-collar manufacturing jobs have been automated or transferred offshore.
“We’re not going to get back the manufacturing jobs we lost in the last downturn,” says John Dean, who follows technology companies for Montgomery Securities in San Francisco. “There will be more invested in robotics and contract manufacturing offshore. We won’t have those fellows on the factory floor.”
New demand is also expected to be relatively light for non-technical staff and support jobs, the administrative positions that can often bloat a payroll and reduce profit margins.
In California, job opportunities are expected to be greatest in the southern half of the state, where a robust defense industry and a more varied economy have combined to resist the high-tech boom-bust cycles.
Unlike Northern California, where chip making dominates Silicon Valley, the high-tech communities of Ventura, Los Angeles, Orange and San Diego counties are home to a wider sampling of telecommunications, medical and electronics operations.
“When some parts move down, others go up,” says First Interstate’s Vincent. “It helps to have that variety.”
