Higher-wage industries boost hiring in L.A., but income growth lags

Higher-wage industries boost hiring in L.A., but income growth lags
A film crew sets up lights and cameras on the lawn of Los Angeles City Hall. Rising employment in the motion picture and sound recording segment is helping to improve the county's job situation. (Al Seib / Los Angeles Times)

California is "in growth mode from top to bottom," but the expansion is happening unevenly around the state, a report by Los Angeles research firm Beacon Economics found.

Employment in the Los Angeles area is expected to hit its prerecession peak by the middle of next year.


The unemployment rate for the Los Angeles-Long Beach-Glendale metropolitan area slid from 10% to 8.1% between the summers of 2013 and 2014 as the number of people unsuccessfully looking for work plunged 18.6% to 399,000, according to the report.

High-paying industries are ratcheting up their hiring, the report said. Local employers in the education and healthcare services, professional and business services and information industries added 52,200 jobs to payrolls in July compared with a year earlier.

Nearly two-thirds of workers in the Los Angeles information sector are in motion picture and sound recording, a subsector that added 7,400 jobs as the number of on-location film permitted production days surged 33.7%, according to the report.

Traditionally middle-class employment is also on the upswing. More building projects mean rising construction employment. And increased production and output in manufacturing -- a sector that is shedding jobs -- is indirectly supporting jobs in other industries, according to Beacon.

Employment in the Los Angeles area rose 1.6% in July from the same month last year and is expected to increase in similar fashion in the next two years.

But that's slower than the 2.1% increase statewide. In San Francisco, where Beacon expects the unemployment rate to dip to 4% by the middle of next year, nonfarm employment has risen 3.4% in the last year and is projected to swing up 3% for 2014.

Employment in San Francisco County has exploded past the record high set in December 2000, due largely to the tech industry.

San Diego County, up 2.4% this year, is also outpacing Los Angeles and is on track to see its jobless rate fall below 5.5% by this time in 2015. The county has experienced a building boom as the value of permits for new commercial structures jumped 72% year over year.

In Los Angeles, per capita income is on the rise, increasing 1.8% from the first quarter of 2013 to the same period this year and surging 12.4% over the last four years.

Angelenos are also spending more, with a bump in taxable sales receipts forecast.

But income expansion in L.A. lags the 3.6% year-over-year and 16.7% four-year increases statewide.

California is an increasingly expensive place to live. In San Francisco, an existing single family home costs $900,000 at the median, 1.5% above the previous record high set in 2007.

And even home buyers considering what had been less expensive markets are experiencing sticker shock. Homes in San Francisco, which had been selling for 68% more than East Bay properties, at the median, are now just 33% more expensive. In the Inland Empire, the median home price is up 16.5% year over year to $267,000.

The high cost of living has fueled recent calls to increase the minimum wage statewide and in various cities. Los Angeles Mayor Eric Garcetti is currently backing a proposal to raise the city's wage floor to $13.25 an hour by 2017.


The City Council approved a $15.37 minimum wage for large hotels, sparking vows Wednesday from the local hotel industry to fight back.

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