Southland adding jobs at rapid pace but many have low pay, reports say
Southern California job creation has grown rapidly over the last two years, but the recovery has been dominated by lower-paying service jobs in retail and food services, according to new research.
That trend will continue without major shifts in education and workforce training, according to a series of recent reports commissioned by the Southern California Assn. of Governments.
In Los Angeles County, for example, projections show that more than 70% of total job openings through 2018 will be in occupations that require no college degree. Jobs expected to be in high demand for the county — cashiers, retail salespeople, and restaurant workers — all have median annual wages of $18,000 to $22,000.
“As an economic development plan, this is not a good strategy,” said Christine Cooper, a vice president at the Los Angeles County Economic Development Corp. “When we’re thinking about economic development and building prosperity for a region, the focus is not only on creating jobs in food services and in retail operations … it’s focusing on industries where we can sell our products outside the region, and bring new dollars in.”
Continued growth in the low-wage job market in Southern California is reflected in workers’ earnings: The median household income in Los Angeles County has continued to decline since 2010, weakening the purchasing power of families. Five of six counties in the region, excluding Ventura County, all have a lower per capita income than in 1990.
Job seekers such as Roderick McIntosh, 35, have seen firsthand how their pay has eroded.
The Air Force veteran has worked in the information technology field for more than a decade, handling network administration and communications for defense contractors and other companies in the U.S. and abroad. Despite having top-level security clearances, he has unsuccessfully searched for months for a local job in information technology.
He recently took a seasonal sales job at Bloomingdale’s at Westfield Century City.
“I’ve always known that there was a future in technology,” McIntosh said. “So it’s extremely disappointing to come here and not find anything.”
He said many companies in the field are more interested in hiring workers from India or China who have more education. He plans to begin studying computer science at El Camino College in January.
Experts said the concentration of job growth at the low end of the economy has been the result of steep declines in industries that have historically been pathways to the middle class. The manufacturing industry has undergone a decades-long transformation requiring fewer workers, and the construction industry has only recently begun to pick up.
But economists commissioned by the Southern California Assn. of Governments all pointed to bleak statistics on educational attainment in Southern California as a key driver of the low-wage cycle.
Only about 29% of Southern California workers older than 25 have a bachelor’s degree, compared with more than 43% of the San Francisco Bay Area’s workforce.
“You’re looking at a huge share of our adult population that is pretty much not qualified to work in jobs that can pay really well,” said John Husing, president of Economics & Politics Inc., who specializes in the Inland Empire’s economy.
Those stark differences in education are evident in poverty data: Nearly 18% of households in Southern California live below the federal poverty line, compared with 11.3% in the Bay Area.
“If we don’t have a workforce that can fill the needs of employers, they’re going to look elsewhere,” said Wallace Walrod, chief economic advisor at the Orange County Business Council. “
Boosting higher education attainment is a long-term struggle, but experts convened by the Southern California Assn. of Governments on Thursday pointed to five industries they believe could boost the incomes of lower-educated workers in the near future: healthcare, manufacturing, construction, logistics and real estate.
Construction has been the fastest-growing major industry in California over the last year, and logistics jobs tied to increased port activity have been the biggest contributor to the Inland Empire’s fast-growing job market over the last year.
Jobs in the healthcare industry can vary widely in quality: from high-end surgeons to nursing assistants who make less than $25,000 a year.
Husing, the Inland Empire expert, said the promise for better-paying jobs lies with the array of technicians in the healthcare field who read ultrasounds and heart monitors. The challenge for that sector is training.
“The difficulty is the supply chain of workers,” he said. “We’re just not set up to train them.”