State Expected to Outpace U.S. Economically

California will post better numbers than the nation as a whole by 1995--more jobs, more people and more housing. Despite that growth, however, the state may not grow more prosperous at the rate of previous years, according to a report by the Center for Continuing Study of the California Economy.

What’s more, unplanned growth that doesn’t take into account infrastructure and labor training needs could ruin the state’s competitive advantage, warns the study, which will be released today by the private, independent Palo Alto-based research group.

The six-county Los Angeles Basin will continue to step along at about the same pace as the state despite a projected decline in aerospace jobs. San Diego County will grow more quickly than most other parts of the state.

“California is fairly well positioned in terms of its geography, its market size and its industry mix” to outpace national increases in jobs, population, households and housing units, said Stephen Levy, director and senior economist for the research group. However, he added, “our competitive stand is not inevitable or forever.”

15% Population Gain Seen

Between 1987 and 1995, California will see a 16.9% jump in total jobs to 15.3 million. The total number of U.S. jobs is expected to rise only 9%.

California’s population is projected to increase 15%, compared to 6.7% for the nation as a whole. The number of California households will rise 21.1%, while U.S. households will increase 12.1%. Total personal income in California will jump 29.6%, compared to 21.4% nationwide.

The Los Angeles Basin--defined by the center as Los Angeles, Orange, Riverside, San Bernardino, Ventura and Imperial counties--will stick close to the California average for growth between 1987 and 1995.

Jobs in the region are predicted to increase 16.2%, households will grow 22.3% and total income will rise 28.7%.

San Diego County will push ahead of many other regions in growth by 1995, with jobs increasing 22.8%, households rising 19.9% and total income jumping 34.1%.

In Los Angeles and California, job growth will come mainly from the service and wholesale-retail trade sectors. In Los Angeles, service and trade will account for more than 70% of the new jobs, the study projected.

Income growth is less assured than the growth in jobs and households and is tied to how well the nation handles a number of economic issues, including the budget and trade deficits and business investment, Levy said.

Future increases in income also require a significant improvement in productivity.

“We made ends meet in the 1980s not by having rising real wages but by putting up more . . . work” as more and more people entered the work force, Levy said. “You can’t do that forever. You run out of people to put in the labor force.”

Growth in per-capita and household income probably will slow in California. Per-capita income could range between $19,135 and $21,088 in 1995 depending on productivity growth. It stood at $17,800 in 1987.

All this projected growth poses several challenges to the state, the study said. They include:

- A potential mismatch between the skills needed by industry and those possessed by the state’s labor force.

- Infrastructure needs that will exist even if the growth rate were much slower than expected. Schools, roads and the handling of society’s wastes are only a few of the needs facing the state.

Despite recent losses to other areas of the country--California missed out on the Sematech high-tech consortium, which went to Austin, Tex., and the supercollider--”measured by gross economic indicators California has not fallen behind other regions,” the study said.

“While the California economy is well positioned to contribute to the nation’s economic growth, the state’s growth cannot be taken for granted,” the study concluded. “If Californians cannot reach a consensus on maintaining and strengthening the state’s public investment facilities (schools, roads, etc.) through adequate funding, then California may slowly lose economic advantage to those who do.”

CALIFORNIA’S CHANGING ECONOMY

Growth or decline in the number of people employed in major sectors of the state’s economic base; figures in thousands.

1979-86 1986-95 Basic services 286.3 362.9 High technology 118.0 53.4 Diversified manufacturing -57.2 37.4 Basic transportation -6.4 15.3 Natural resources 65.4 -1.4 Aerospace 61.7 -21.1

Source: Center for the Continuing Study of the California Economy