Los Angeles County may be the sleeping giant of the state's economic recovery. But don't tell that to officials of the roaring San Gabriel Valley.
In a new report that confirms what many have suspected about this Los Angeles County subregion, researchers found that the San Gabriel Valley weathered the 1991-94 Southern California recession with no net job losses. By 1996, the report says, the area was well on its expansion mode, adding nearly 13,000 jobs that year. By comparison, Los Angeles County as a whole, despite gaining momentum in recent months, still remains about 188,000 jobs short of its peak employment in mid-1990.
The San Gabriel Valley--an area of 1.8 million people who live in a vast region stretching from Pasadena to Claremont--doesn't have much of the glamorous entertainment industry or quite the high-tech prowess of Orange County. But it didn't rely as much on aerospace, and it is highly diverse in population and industry, and very entrepreneurial and trade-oriented.
According to the report, prepared by Berkeley-based Applied Development Economics with state data, the San Gabriel Valley added about 4,900 firms between 1991 and 1996. The report analyzed figures through 1996, but leading regional economists such as Jack Kyser say the San Gabriel Valley has continued to outpace the county in job formation since then.
"The thing that grabbed everybody about this report was the growth in employment," said Nicholas Conway, executive director of the San Gabriel Valley Council of Governments, a 3-year-old group that funded the study. The council represents the 30 incorporated cities in the valley, from Pasadena and Pomona (each population about 140,000) to Bradbury (the smallest with about 800 people).
But for all the good news, the report also highlights a worrisome trend in many areas of the state: a general decline in real earnings. In the San Gabriel Valley, real payroll incomes dropped in more than half of 29 towns studied, and the biggest declines occurred in Rosemead (-$7,524) and La Puente (-$6,869). But earnings also fell in high job-growth areas such as South El Monte, Arcadia and Alhambra. As the report notes, this is partly because new firms hire new employees, who are generally paid less than experienced workers.
But another major factor is that many of these new jobs have come in low-paying sectors such as retail and garment. In the valley, the fashion industry cluster--makers and wholesalers of apparel, textile and leather goods--added 550 firms from 1991 to 1996. Six cities, led by South El Monte, created almost 5,500 apparel jobs during that period. At the same time, real earnings in this industry fell from $17,661 in 1991 to $14,307 five years later.
Overall, average payroll wages in the San Gabriel Valley stood at $28,288 in 1996, compared with $34,310 for all of Los Angeles County.
On a more positive note, Pomona, the one San Gabriel Valley town that took a big hit from aerospace's decline, losing thousands of jobs when General Dynamics Corp. left, pretty much made up all the losses by 1996, thanks partly to growth in medical services and high-tech equipment firms. Average payroll wages in Pomona were down just $600 in 1996 from 1991.
Besides apparel and food processing, the report examined five other industry clusters in the area--health-care technology, high-tech equipment, industrial machinery, information and research service, and metalworking. A region is said to have an industry cluster when it reaches a critical mass of firms, employees and support businesses such as suppliers, business associations and training schools for those jobs. The report states that these seven clusters accounted for nearly a quarter of the growth of businesses from 1991 to 1996.
Conway and other officials in the valley say they will use the report to help build these industry clusters, track changes in the area's economy and lobby for their share of public funds to address major gaps in transportation and housing needs.