Sporadic Recovery


ISEA Annual Percent Changes in Employment in Populated Areas by Zip Code, June 2011

Southern California employment growth is stalled, with Inland Empire still posting job losses;
San Jose and San Diego are the only bright spots on the map

ISEA study finds year-over-year job growth remains idle in most areas of Southern California and appears patchy in Northern California. Significant job growth is seen in San Diego County, San Jose and Santa Barbara areas and small pockets of Los Angeles and Orange; the Inland Empire, Fresno, north of San Francisco and some areas of Sacramento still record job losses.

This month's employment report expands our analysis to all of California. Aside from San Diego County, Southern California's year-over-year private sector employment growth has stalled or turned negative. Northern California appears more colorful on our maps—from red-orange Fresno, indicating year-over-year job losses, to idling yellow Sacramento to green San Jose, California seems to develop at very different paces. In Southern California, significant improvement in job growth from last month can only be found in Bakersfield and Ridgecrest. Most areas in Southern California remain stagnant, as researchers of the¬†Institute for Spatial Economic Analysis (ISEA) at the University of Redlands School of Business have found.

The ZIP code level analysis of populated areas in California reveals a colorful, highly fragmented picture— while some areas have seen significant job growth over the last year, other areas are still shedding jobs, and 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 month has again not changed significantly:

  • areas in the vicinity of centers are faring slightly better than peripheral areas;
  • the coastal areas clearly outperform the inland region, with shrinking green zones in L.A. and Orange, but expanding green zones, indicating significant job growth, in San Diego;
  • the area to the northwest of Los Angeles and close to downtown San Diego show 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 and San Bernardino— are still losing jobs.

Some positive changes from last month appear to be in Kern County (Bakersfield and Ridgecrest), Imperial County (El Centro), San Luis Rey and the aforementioned downtown San Diego, which have seen larger green zones.

In comparison, Northern California appears very patchy and Zip codes with positive job growth can be found next to those with negative job growth, indicating divergence across regions. The San Jose area and some areas in Sacramento and Merced have seen significant job growth of more than 3%. Santa Rosa, Redding, small areas in Sacramento and Visalia and the south have seen moderate job growth of 1 to 3%. Vacaville, the northwestern area of Sacramento and a small pocket in Fresno have all seen significant job loss of more than 3%. Regrettably, many areas in Northern California are still shedding jobs.

Two ingredients—job creation and the increasing buying power to help retail, leisure and hospitality—are often observed in tandem as indications of significant positive job growth in an area. This time around, retail was not helped in most Southern California counties by job gains in other sectors of the economy. Some industries have started adding jobs, and in the areas where they are located, we see job growth— but government job losses often likely watered down some of the positive effects of those gains, preventing trickle down effects into the retail sector. That leisure and hospitality has been able to add jobs in various counties (such as San Diego and L.A.) provides some hope. However, it is unclear how much of this job growth is based on tourism.

In Southern California, 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%. On the contrary, a small area around Rancho Palos Verdes has been less fortunate and shows a more than 3% 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 %. 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 employment changes. The situation is still not stable, with few Zip codes with positive job growth next to those with negative job growth. Most areas in this region have seen 1 to 3 % job losses with a few areas in excess of 3%, such as east of Palm Spring and Big Bear Lake. Noticeably, the observed year-over-year 1 to 3 % job growth in Victorville seen last month has gone.
  • San Diego County is the only somewhat bright spot in our analysis this month: Job growth has accelerated year over year in some areas, with significant job growth of more than 3% in San Luis Rey, downtown San Diego and to its north.
  • Ventura County has not seen any significant changes as compared to last month.
  • Imperial County has come back to see some improvement. The observed year-over-year 1 to 3% job growth in El Centro seen two month ago has returned.
  • Kern County also has seen some improvement in job growth, in Bakersfield and in Ridgecrest.

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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