Southern California Employment Machine Idling


A map created by School of Business researchers shows year-over-year employment changes in Southern California by ZIP code

Increases in Employment only in LA, Orange, and San Diego County; Losses Everywhere Else; Government Jobs Account for the Biggest Losses

 Study finds year-over-year job growth idled in most areas of Southern California; significant growth only in small pockets of Los Angeles, Orange, and San Diego County; Inland Empire remains in the orange zone.

This month's employment report clearly indicates problems to be widespread not only in the Inland region. Even the core areas of Southern California, namely Los Angeles and Orange counties, where we saw somewhat promising job growth last month now show growth only in small pockets in these two counties, as researchers of the Institute for Spatial Economic Analysis (ISEA) at the University of Redlands, School of Business have found. Has employment growth stalled in Southern California?

The ZIP-code level analysis of populated areas reveals that the general pattern from the previous month has not changed: Areas in the vicinity of centers are faring slightly better than more peripheral areas; the coastal areas clearly outperform the inland region, although with shrinking “green” zones, that is, zones of significant job growth; the area to the northwest of Los Angeles still shows the highest increases year over year; and the periphery and areas between the centers are lagging behind, and, especially in the inland areas including Riverside, San Bernardino, and Kern County, are still losing jobs.

The two ingredients—job creation and the increasing buying power to help retail—are still the major reasons for the region with significant positive job growth. Some industries have started adding jobs, and in the areas where they are located, we see job growth. In addition, in the areas of job creation, there is money to spend; this helps retailers and other personal service providers to make an additional dollar, too. The two effects together form the basis for the job growth of a region such as the small pockets in the LA and Orange County. If the first of the two fails to provide a basis for the second, then regions can diverge, at least to a certain degree, such as the Inland areas. This month's observations are consistent with this story. While the maps – due to data limitations - only display changes in the private sector, additional government job losses account for the worse picture this month to a great extent. Except for Imperial County, all the other seven counties have posted significant job losses in the government sector.

 What the ISEA research has shown:

  • Among the eight counties in Southern California, only the areas around West Hollywood and Santa Monica in Los Angeles County have seen a somewhat significant job growth over the last year, with some ZIP-codes (shown in dark / green colors) posting gains of more than 3 percent. On the contrary, a small area around Rancho Palos Verdes has been less fortunate and shows a more than 3 percent job decline. Most locations have continued to post job losses or remain idling.
  • Orange County shows a patchy pattern with some light to moderate job growth in some areas along the coast and the area around Orange and Stanton. The small area to the south of Newport Beach and two small areas along I-5 have seen job growth in excess of 3 percent. Job growth in other areas of the county remains sluggish.
  • The two counties of the Inland Empire, Riverside and San Bernardino, still show decline in terms of employment changes. The situation is still not stable as we see few ZIP codes with positive job growth right next to those with negative job growth. Most areas in this region have seen 1 to 3 percent job losses with a few areas in excess of 3 percent such as east part of the Palm Spring and Big Bear Lake areas.
  • San Diego County has not changed much compared to the last month’s picture. Most areas in this county have seen moderate job growth.
  • Ventura County has seen improvement in some locations with moderate job growth.
  • Imperial County has changed to the neutral position. The observed year over year 1 to 3 percent job growth in El Centro seen last month has gone.
  • Kern County still remains in the position of shedding jobs in most regions except for the northeastern area of Bakersfield.

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 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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