Recession Undercuts the Boom Years of the ‘80s : Economy: Report shows 68,300 jobs were created in the South Bay between 1983 and 1989. But since the new decade, nearly the same number have been lost.
The job growth experienced in the South Bay during the booming 1980s has been virtually wiped out by the current recession, which has hit the area’s manufacturing work force the hardest, according to a regional economic report that will be unveiled today.
About 68,300 jobs were created in the South Bay from 1983 to 1989, thanks to the economic expansion, but an estimated 63,100 positions have been lost in the years since then, according to the study prepared by The Planning Center in Newport Beach and Stanley Hoffman Associates in Los Angeles. More than half of the job loss occurred in the manufacturing sector, the study says.
Today, the South Bay’s total employment is an estimated 368,600, only 1.4% higher than the 363,400 recorded in 1983.
The job growth between 1983 and 1989 was 19%, according to the report. But in the past four years, the South Bay has lost about 15% of its work force. Los Angeles County as a whole has lost 10% of its jobs during the same period, the study says.
The report was sanctioned by the South Bay Cities Assn. and will be submitted to the Southern California Assn. of Governments, which is preparing a plan to tackle a host of problems, such as traffic congestion, air quality and affordable housing.
The South Bay association, a collection of the area’s elected officials, will have a workshop on the study at 5 p.m. today at Torrance City Hall to gather public comment. Economic issues are expected to dominate the session.
Although many of the findings confirm what civic leaders already suspected, the study is one of the few reports to break out data solely for the South Bay.
“Everyone knows it’s bad,” said economist Stanley Hoffman. “What these numbers show is the magnitude of the impact and the vulnerability of the industries to nationwide decisions.”
Indeed, among manufacturers, the bulk of the job losses were in instruments, electronic components, and missiles and space vehicles. Aircraft production jobs increased overall in the past 10 years, but all the gains were made before 1989.
“It’s pretty shocking,” Hoffman said. “These are the high-value, high-paying positions.”
Federal government decisions to reduce defense spending, however, are only part of the problem, business leaders say.
“The regulatory climate in California, the cost of living, the cost of land, and taxes are causing businesses to consider leaving,” said Walt Dougher, a Southern California Edison executive and vice president of economic development for the South Bay Assn. of Chambers of Commerce. “We have a long tough, haul ahead. It’s a very competitive situation we’ve gotten ourselves into.”
Although 12,300 manufacturing jobs were created in the South Bay during the robust economy of the mid-1980s, almost three times that number have been lost since then, according to the report. The South Bay had 86,700 manufacturing jobs in 1993, compared to 119,400 in 1989.
Apparel makers were the only manufacturing group that posted gains since 1989--a total of 262 additional employees. But those positions are among the lowest-paying.
There were signs, however, of job growth outside of manufacturing. Business, financial and transportation jobs have increased since 1983, and there was a modest rise in the number of health care employees.
But the biggest growth outside manufacturing has been in the retail sector, which added 8,000 jobs in the past decade. That came even though taxable retail sales fell from $6 million in 1981 to $5.1 million a decade later, with the figures adjusted for inflation in 1991 dollars.
“It’s not unlikely to have some employment growth but find that people are spending less,” Hoffman said. “It’s a situation where we do know that fewer big-ticket items are being sold, whereas fast food did just fine.”
Hoffman’s report projects employment in Los Angeles County to grow 37%, from 4.1 million jobs to 5.6 million jobs, by the year 2010. That assumes there will be a strong recovery by the end of the decade, with much of the job gains in service professions such as communications, real estate and trade.
Because the South Bay depends more heavily on manufacturing, the region would expand its job base at a slower rate, 32%, an increase of about 116,700 jobs, according to the report.
“In order to achieve the higher employment levels, a structural shift in the South Bay’s economy will have to take place,” the report concludes.
It is doubtful that a single industry would evolve to replace the defense-related work force. But efforts are under way to attract about 700 of downtown Los Angeles’ garment wholesalers and independent sellers to a proposed showroom complex in Hawthorne. If it happens, supporters hope that more than 1,200 apparel manufacturers would want to relocate to the South Bay as well.
Meanwhile, South Bay city leaders are preparing a strategy for luring back high-paying jobs. The elected officials are expected to concentrate on attracting businesses in entertainment, tourism, high technology and transportation, an industry that could benefit from renewed public spending on projects such as the Green Line and advanced-technology buses. The final report from the association is expected to be completed in September.
“People may have had an individual attitude like, ‘It’s not my problem; it’s not in my city,’ ” said Inglewood Councilman Garland Hardeman, president of the association. “Now it’s not just a sub-regional issue, but a regional issue. It kind of brings us all to the table.”
The report also showed that South Bay residents’ income grew at a much faster rate in the 1980s than did the income of county residents as a whole, even after adjustments are made for inflation. Per-capita income grew at an average rate of 1.8% per year, from $17,488 in 1980 to $20,832 in 1989. In Los Angeles County, it rose an average of only 0.9% each year, from $14,734 to $16,149 over the same period.
Perhaps not surprisingly, the greatest income growth came in Rolling Hills, Palos Verdes Estates and Manhattan Beach. Per-capita income fell in two cities, Hawthorne and Inglewood.
South Bay’s Roller Coaster Economy South Bay employment grew in the 1980s, but an ensuing slump erased most of the gains.
Total number of jobs Change 1983 1989 1993 1983-93 South Bay 363,400 431,700 368,600 +1.4% Los Angeles County 3,893,100 4,586,800 4,111,000 +5.6% Southern California 5,571,100 6,915,500 6,365,000 +14.3%
Source: Stanley Hoffman Associates Inc., County Business Patterns, California Employment Development Department.