Sacramento is forever comparing itself to Los Angeles and San Francisco. When it comes to creating good jobs, California’s capital is in the middle – its record not as good as the City by the Bay, but better than the City of Angels.
As part of its series of reports to call attention to the “two-tier economy” emerging in our state, the California Center for Jobs and the Economy did a deeper dive into state numbers for Los Angeles County and the Bay Area, the state’s two biggest job centers.
It found an “economic tale of two regions.” In Los Angeles, the base of private, non-farm jobs shrank between 1990 and 2013 before growing slightly last year, and came nowhere close to keeping up with population growth. In the Bay Area, growth rates in those jobs topped 20 percent.
The center – the research arm of the nonpartisan California Business Roundtable of major corporate executives – argues that at least some of the difference is due to state government regulation and taxation.
Silicon Valley’s economy is based on high-tech industries that have been less regulated, while L.A. has a more traditional mix of industries where the state has had a heavier hand.
At my request, the center ran similar numbers for Sacramento County. What they show is that we’re faring better than L.A. but not as well as the booming Bay Area, and that our overall growth rate for non-government, non-farm jobs isn’t keeping pace with the growing population.
Between 1990 and 2014, the number of these private-sector jobs per 1,000 people dropped by 7.5 percent in Sacramento, compared to a 11 percent decline in Los Angeles County and a 1 percent increase in the Bay Area.
All three areas, however, are in the same unhappy boat in terms of jobs added during the excruciatingly slow economic recovery not being as good as the ones lost during the horrible recession.
The proportion of jobs that pay middle-class wages, particularly blue-collar jobs, plummeted between 1990 and 2014. At the same time, the number of low-wage jobs increased sharply (partly because live-in health care providers, often relatives, are now counted). That trade-off is increasing inequality and is not good for the American dream.
The inequality trend is particularly bad in the Bay Area, where there are now fewer middle-class jobs than high-wage or low-wage jobs. In past economic recoveries, back office, support and other middle-class jobs were created, the center says. In this boom, job growth is at the extremes – high-wage jobs in new industries and low-wage service jobs.
There’s some bitter truth in the caricature of millionaire high-tech execs and minimum-wage baristas serving their no-foam lattes.
On this measure as well, Sacramento is in between. Its drop in middle-class wage jobs and rise in lower-wage ones hasn’t been as bad as Los Angeles, but Sacramento’s increase in higher wage jobs doesn’t match the Bay Area’s.
Being in the middle is not the worst thing in the world. It could be a lot worse. It makes you thankful for what you have, and gives you a goal to shoot for. If that’s how Sacramento leaders take on the job-creation challenge ahead of them, it just might work.
By the numbers
Distribution of private, non-farm jobs by wage level, 1990-2014:
- Higher wage, 28.4% to 33.1%
- Middle wage, 37.3% to 27.6%
- Low wage, 26.7% to 30.1%
- Higher wage, 27% to 29.9%
- Middle wage, 28.7% to 21.8%
- Lower wage 34.2% to 35.7%
- Higher wage, 28.1% to 27.7%
- Middle wage, 41.3% to 29.3%
- Lower wage, 23.3% to 32.5%
Source: California Center for Jobs and the Economy