News

California Job Growth

ISEA_Report

By Bing Bai and Johannes Moenius, University of Redlands School of Business faculty members

ISEA study finds year-over-year job growth still slow, but geographically more widespread. Significant job growth is seen in northern cities such as San Jose and regions such as Tulare and Kern County. More modest— but also more geographically widespread— improvements can be found in Los Angeles, Orange and San Diego County while Inland Empire job numbers roughly remained constant year over year.

August 19, 2011—This month's report actually has one piece of positive news: though the recovery is still too slow to make up for the job losses during the last recession, year-over-year job growth actually became more geographically dispersed. While last month's report saw job growth only in small pockets of California, this month in some sense shows the reverse— substantial job losses are concentrated in small areas (like Napa and Fresno) while job growth was more widespread.

Researchers of the Institute for Spatial Economic Analysis (ISEA) at the University of Redlands School of Business note that this observation, if repeated in future reports, could prove important for the development of jobs in California. Only if the recovery becomes more broad-based, both in terms of industries as well as in terms of geographic spread, will this recovery take hold and be tangible for the people living in the Golden State.

The ZIP code level analysis of populated areas in California still remains a colorful, fragmented picture— while some areas have seen significant job growth over the last year, other areas are still shedding jobs. In addition, areas with job growth can neighbor those with job losses, as a closer inspection of the Sacramento area shows.

In Southern California, the general pattern of the previous months can be observed again, however, with some changes in local performance:

  • areas in the vicinity of large cities are faring slightly better than peripheral areas;
  • the coastal areas clearly outperform the inland region, with expanding green zones in L.A. and Orange;
  • the areas to the northwest of Los Angeles, close to downtown San Diego and, to our pleasant surprise, Bakersfield show the highest increases year over year;
  • the periphery and areas between large cities are still lagging behind— especially in the inland areas including Riverside and San Bernardino— but job losses are much less widespread.

Some positive changes from last month appear to be in Kern County (Bakersfield), Orange County, Los Angeles County, Ventura County and Inland Empire, which have seen larger green zones.

Interestingly, fragmentation of job growth is larger in Northern California than in Southern California. ZIP codes with positive job growth can be found next to those with negative job growth, indicating divergence across regions. However, we have seen a slight improvement in the San Jose area with more dark green patchy areas meaning significant job growth of more than 3%. Regrettably, many areas in Northern California are still shedding jobs.

In Southern California, the ISEA research has shown:

  • In Los Angeles County last month we saw somewhat significant job growth in areas around West Hollywood and Santa Monica as well as in areas around Pasadena and San Fernando with some ZIP codes (shown in dark /green colors) posting gains of more than 3%. A few locations such as Littlerock, Palmdale, and Central L.A. areas have stepped out of idling status compared to last month.
  • In general, year-over-year job growth in Orange County has improved this month, where we have seen some light to moderate job growth in most areas. Small areas in Orange, Portola Hills and to the southeastern areas of Portola Hills have seen job growth in excess of 3%.
  • The two counties of the Inland Empire, Riverside and San Bernardino, still remain sluggish in employment changes though most areas are now idling (-1% to 1% job growth) compared to the 1% to 3% job losses of last month. The areas with significant job losses in excess of 3%, such as east of Palm Spring and Big Bear Lake, are gone. Noticeably, a small area near Glen Avon has observed more than 3% of year-over-year job growth for the first time.
  • San Diego County displays the same pattern this month: job growth has accelerated year over year in some areas, with significant job growth of more than 3% in small pockets near downtown San Diego and the northeastern area. The only difference we have seen this month is that the significant job growth areas in San Luis Rey and the north area to downtown San Diego have gone.
  • Ventura County has stepped out from its idling status with light to moderate job growth (1% to 3%, light green) compared to last month.
  • Imperial County has not seen any significant changes as compared to last month.
  • The significant change in Kern County has been observed in Bakersfield where we have seen more than 3% job growth this month.

The researchers combined today’s data release on employment by industry from the California Employment Development Department with business pattern data by ZIP code and industry data from the U.S. Census Bureau to arrive at their projected values. The researchers point out that, given the data available to them, their projected values are only rough approximations of the true values, and that accuracy is higher for counties with larger populations. Despite those shortcomings, the observed patterns should still be helpful for decision makers in politics, businesses and organizations to determine where to best direct their efforts.

 


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