LA County economy to add 234,000 jobs over next five years

Emerging industries such as healthcare and advanced transportation have joined entertainment and global trade as key drivers of economic growth and prosperity in Los Angeles County, bringing “unparalleled optimism and opportunity” to one of the most vibrant markets in the world, a new study shows.

The report, prepared for the Southern California Association of Governments (SCAG) by the Los Angeles County Economic Development Corp., shows employment in LA County growing by 65,000 jobs this year and 234,000 over the next five years. This will create a tightening in the labor market that should force wages up, particularly in those occupations requiring higher levels of educational attainment.

“The county has fully recovered from the Great Recession and is now seeing tremendous growth and opportunity,” the report said. “Los Angeles continues to be the creative capital of the world, with a growing emphasis on new and innovative industries.”

The bold outlook for LA County mirrors that of most of the six-county SCAG region, according to in-depth analyses by top economists to be released December 6 as part of the Ninth Annual Southern California Economic Summit at the L.A. Hotel Downtown. The Summit, co-sponsored by SCAG and the Southern California Leadership Council (SCLC), will feature wide-ranging discussions on the region’s future, including its growing role in the innovation economy and the impact of emerging technology in the area of transportation. More than 400 business and elected leaders are expected to attend.

“Southern California is one of the fastest-growing population and economic centers in the world, and the decisions we make now will impact us for generations to come. The Economic Summit is a great opportunity for stakeholders throughout our region to better understand the opportunities and challenges that are in front of us, and set the stage for what we believe is an extremely promising future,” said SCAG President Alan D. Wapner.

Duarte City Councilmember Margaret Finlay, SCAG’s immediate past president, said Los Angeles County is uniquely positioned to take advantage of a continued economic recovery.

“Ours is a region of innovation and opportunity – home to some of the most advanced businesses in the world and a place where highly qualified professionals want to be,” Finlay said. “We need to build on that, by making sure we’ve got the infrastructure in place and that the opportunities exists for upward mobility across the board.”

Healthcare is expected to drive the most new jobs (92,000) in LA County over the next five years, followed by hospitality and food services (32,000), information (26,000) and transportation and warehousing (25,000). Evolving or emerging industries include advanced transportation, biosciences and digital media.

The continued overall growth in employment has sharply reduced the poverty rate in LA County, from 19.1 percent in 2012 to 14.9 percent today. Even so, the highest number of job openings in the coming years will be in occupations that require a high school diploma or less and pay less that the county’s median annual wage of $40,340. The study further noted that one-fifth of adults with less than a high school education live below the poverty line.

“As with earnings, there is a strong correlation between lower levels of educational attainment and higher rates of poverty,” the study said.

Other potential challenges to the local economy include the possibility of a recession, a slowdown in global trade as a result of tariffs and protectionism, rising interest rates and a cooling of the Chinese economy.

“Most crucially, the largest overall risk to the Los Angeles and California economies is the failure to produce adequate housing supply to meet the needs of the growing workforce,” the report states. “High-density, transit-oriented housing should be a priority for the region to prevent firms and workers from leaving.”