Business analyst Mark Lacter joins KPCC once a week for an in-depth look at economic issues in Southern California.
Hosted by Steve Julian and Mark Lacter
Airs Tuesday mornings

Job numbers; cities and their economies

KPCC's business analyst Mark Lacter talks about how the job numbers are holding up in California; he also talks about the latest cities economic report by the U.S. Conference of Mayors.

Steve Julian: On Tuesdays we talk about the latest business stories with Mark Lacter. Mark, the unemployment rate in California last month fell to 11.1 percent. Are we seeing more jobs ALL across SoCal?

Mark Lacter: Not really Steve. Actually, the job market isn’t a very equitable place these days. The good news is that there actually is a job market: The state has added more than 350,000 jobs since employment bottomed out in California a little over a year ago. That’s a better growth rate than for the nation as a whole. But if you look at the jobless numbers for December, the unemployment rate in L.A. County was 11.6 percent; in Orange County it was 7.8 percent. Now it’s not unusual for Los Angeles to have a higher percentage of people being out of work: It’s a bigger, more complicated economy. But the difference is usually a couple of percentage points. Last month it was close to four points, which tells you a lot about how uneven this recovery has been.

Julian: We see these deviations all over the state?

Lacter: Yes. San Francisco’s unemployment rate for December was 7.6 percent – that reflects solid growth in the technology industry. Then you go to Riverside, where the real estate meltdown really took its toll – the jobless rate there was 12.5 percent, and in Imperial County, which has some of the highest levels of poverty in the nation, the rate was almost 27 percent. What these differences are really all about is demographics – and you can see that by just drilling down in L.A. County, where there are significantly higher jobless rates among Latinos, African Americans, and folks without a high school diploma.

Julian: On the other hand, if you’re white or Asian…

Lacter: …and have a college degree, have experience in areas like technology and health care, and are in your 30s, you are more likely to be holding a job, or if you happen to be out of work, you’re more likely to find a new one fairly quickly. These differences are always part of the economy, but they’ve been much more pronounced since the recession ended. The other point to keep in mind is that you can’t tell all that much about the health of the statewide economy by looking at the statewide unemployment rate, which as you mentioned was 11.1 percent in December. I know the number receives a lot of attention in the media, but there are so many other factors that determine hiring activity. And as we get further into the recovery, that’s an important notion to keep in mind.

Julian: L.A. Mayor Villaraigosa turned 59 yesterday… and didn’t sound very celebratory when he claimed, in Washington DC, that cities are getting short shrift.

Lacter: That’s right – he’s president of the U.S. Conference of Mayors, and that organization released a report saying that the vast majority of the nation’s metro areas have not recovered fully in terms of lost jobs. In the L.A. area, to give you an idea, just 100,000 jobs have come back since the recession – that’s only one-fifth of the number of jobs that were lost. Quite a ways to go. The mayor is looking for more help out of Washington – he’s especially interested in transportation funding so that work can begin on several mass transit projects, including the Westside subway extension, and that presumably would mean more jobs.

Julian: But is there really much, if anything, a mayor or a city council can do to suddenly create jobs?

Lacter: No, there really isn’t, Steve. There’s no big pot of money available – certainly not now – and even if there were one it’s not entirely clear whether the government is best-equipped to become a de-facto employer. Matter of fact, just yesterday the L.A. controller, Wendy Greuel, released an audit showing how the city didn’t even pursue more than $1 billion in federal stimulus money that it was eligible for. Turns out the various city departments couldn’t get their acts together in time to make the application deadline.

Julian: Does government have a role in growing the economy?

Lacter: It has a role in creating a better economic climate. But the heavy lifting of actual job creation is almost always handled more efficiently by the private sector – even if the pace may seem painfully slow, and painfully inequitable.

Julian: Mark Lacter is a contributing writer for Los Angeles Magazine and writes the business blog at LA