Los Angeles Ranks Among Worst Job Markets

Los Angeles County lost more net jobs than any large metropolitan area in the nation between 1990 and 2013, due to its high cost of living, unfriendly business climate and poorly educated workforce, a new UCLA report concludes.

“To put this in perspective, L.A. has gone 23 years without positive job growth,” wrote economist William Yu in the annual forecast of UCLA's Anderson School of Management, released today.

The county experienced a 3.1 percent decline over the period. Only two of the nation's 32 largest cities shrank their workforces during that time: Cleveland (-0.2 percent) and Detroit (-2.8 percent).

The starkly negative report on the economic health of the nation's largest county, with a population of 10 million, contrasted Los Angeles with nearby suburban counties and with other, more dynamic cities across the nation.

From December 1990 to December 2013, Orange County experienced 24.2 percent growth in payroll jobs, and Riverside/San Bernardino saw a 63.5 percent rise.

California's other large metro areas also far outperformed Los Angeles in job growth, including Sacramento (34 percent), San Diego (33.2 percent), San Jose (16 percent) and San Francisco (11 percent).

Meanwhile, many Sunbelt cities experienced more than 50 percent employment increases, including Las Vegas, Orlando, Phoenix, San Antonio, Houston, Dallas and Atlanta.

Part of Los Angeles' job decline can be attributed to national trends. In 1990, a fifth of the county's manufacturing positions did not require high skills and education. “Unfortunately, those jobs are now gone but less-educated workers … are still struggling to find a job,' the report said.

Meanwhile, the education level of Los Angeles' workers dropped due to an influx of low-skill immigrants in the 1990s and an exodus of high-skill workers, as the aerospace industry moved out of the region, according to the analysis.

The report noted that housing in Los Angeles and San Francisco is the least affordable among the nation's major cities, according to a National Association of Realtors index. One example: a median single-family house in Los Angeles costs $531,000, in contrast to $220,000 in Phoenix.

“For an employer considering expanding or establishing a business,” Yu wrote, “it is less likely that she will choose L.A. because it will cost her more in rent and wages compared to other cities with lower costs of living but not necessarily lower quality amenities.”

Similarly, Los Angeles' growth is hampered by the lack of an effective public transportation system.

“Los Angeles is the most congested city in the nation,” Yu noted. Traffic, he wrote, inflates the cost of business and “places an invisible ceiling on city growth in population, jobs, building and housing.”

Key recommendations included encouraging high-density, multi-unit residential housing; streamlining the development and regulation of housing projects, and encouraging alternatives to single-car commuting.

Much of the report dwelt on the influence that the quality of public schools has on the local economies. For instance, despite high housing costs, Yu wrote, San Francisco and San Diego outperform Los Angeles in job growth because their workforces are better educated. Orange County and Ventura County have better schools than Los Angeles, “so they attract higher educated parents,” the report said.

“Improve L.A.'s public schools,” Yu wrote. Focusing on early education, before kindergarten, he added, “will significantly increase the success of K-12.”

Overall, 46,795 more people left Los Angeles County than arrived between 2007 and 2011, the report said. That included a net outflow of 115,651 people who moved to the suburbs or to other regions of the U.S., and a net inflow of 68,856 international migrants.

Notably, about half of the net foreign migration came from Asia, and less than a third from Mexico and Central America.

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