Bright Future for Southland Seen
Taking issue with doom and gloom projections about Southern California’s economy, several economists and business leaders said Monday that prospects for job and business growth remain bright once the recession ends.
Among the engines that will drive the local economy are increasing international trade, particularly with Mexico and Asia; the burgeoning of small businesses, especially in high-tech fields, and the continuing influx of immigrants from the rest of the nation and the world.
Speaking at a conference titled “The Next L.A. Economy,” the business leaders criticized the news media for focusing too heavily on job losses and not enough on job creation.
Stephen Levy, director and senior economist with the Center for Continuing Study of the California Economy in Palo Alto, said the current economic situation is analogous to that of the late 1960s and early ‘70s.
“We’re in a very deep recession, compounded by structural change--meaning defense cutbacks and financial sector mergers,” he said in an interview. But that doesn’t mean, Levy added, that “the basic underpinnings of the economy are falling apart.”
Said Levy: “There are these three large areas of opportunity, though that’s not the same thing as success: trade, technology and tourism/entertainment.”
Philip M. Burgess, president and senior fellow at the Center for the New West in Denver, used an analysis of jobs statistics from 1988 to 1990 to challenge what he termed myths about job creation in the state--and to suggest policies to preserve jobs in the future.
For one thing, he said, three sectors accounted for nearly 70% of new jobs in Los Angeles and two out of three new jobs in the state: services, manufacturing and wholesale trade.
Surprisingly, by a ratio of 6 to 1 in the state and 4 to 1 in Los Angeles, the new service jobs were not low-paying “burger flipping” jobs, but high-wage business and professional positions in such fields as computer programming and health care administration.
New jobs were also created by manufacturers, contrary to popular belief. One in five new jobs in Los Angeles were generated in this sector, Burgess said.
Other experts, however, expressed growing concern--in light of the planned shutdown of the General Motors plant in Van Nuys and continuing cutbacks in defense--about the loss of higher-paid manufacturing jobs during the recession.
Burgess said his data supports the argument that small, locally owned business accounted for the vast majority of new jobs. In the Los Angeles Basin, nearly 90% of all new jobs were created by companies with fewer than 100 workers. That included small manufacturers, which accounted for nearly 40,000 new jobs during the period in the L.A. Basin.
Burgess cited the data to suggest that business policy in the state should promote education, capitalize on links with the global economy and focus on helping existing business remain and expand.
Futurist Alvin Toffler also emphasized the need to preserve the region’s technical advantage.
“L.A. has a fantastic pool of scientific and technological knowledge, which is in danger now of being dispersed and broken apart, and that’s in the defense industry,” Toffler said in an interview. “We should have a brain drain policy. We should try to keep them here any way we can.”
The conference at the Bel Age Hotel in West Hollywood was sponsored by the New Vision for Southern California Council, a coalition of businesses and other groups.
