As the national economy continues to wobble its way out of the Great Recession, employment numbers in Los Angeles County are on a slight upswing with jobless rates hovering around 9.4 percent at the beginning of the year. The state labor force actually grew last year by .7 percent, while the County saw an increase of 1.5 percent.
But what do these small numbers mean when, nationwide, three persons are competing for every one job? The decline in unemployment can be traced directly to Americans who have simply stopped looking for work; once someone stops their job search, the government no longer counts them among the unemployed. The Antelope Valley has traditionally seen regular job growth within its signature industry, aeronautics, but even famed Edwards Air Force Base has experienced drastic cutbacks as the demand for high-tech machinery has fallen off during the past five years.
The prominent companies which call Palmdale home—Lockheed Martin Aeronautics Company, Northrup Grumman Corporation, the Boeing Company, BAE Systems and AERO Institute—employ just over 18,000 persons (when including U.S. Air Force personnel), but this number appears misleading when considering Palmdale itself had an unemployment rate of 11.7 percent at year’s end, compared to 8.3 percent statewide and seven percent nationally.
The school districts, including Palmdale and Lancaster unified as well as Antelope Valley Union High School District, employ an estimated 5,000 persons. Other manufacturing outlets such as BYD, the Antelope Valley Solar Ranch One, the Palmdale Power Plant, Morton Manufacturing as well as Kinkisharyo have stepped into the void of late, trying to get persons back to work and give a boost to the local economy.
In the North Antelope Valley, the most common industry is educational services, followed by health care, public administration, transportation and construction. For men looking for work, the construction field appears to be the most accessible, followed by the transportation industry. Women in that geographic region significantly populate the health care profession, followed by educational services. But like the familiar story nationwide, these industries are still not hiring at a rate fast enough to return the economy to full vigor and strength. The reasons are myriad: “There’s not enough demand,” “There’s too much uncertainty,” “Workers are easily replaceable,” “Workers are too expensive,” “There’s not enough lending from banks,” “The deficit is too high,” “Too many regulations,” “Taxes are too high.”
With 14 million people still looking for work, while the stock market and financial institutions have seen record gains over the past two years, it has become a frustrating measure for the unemployed person to believe that “happy days” are just over the horizon.
“There’s no question that employers are being cautious about hiring, especially full time workers,” said Sung Won Sohn, economics professor at Cal State University Channel Islands. “They’re not certain the recovery is for real, so they’re taking their time. And because of productivity gain, they don’t need to hire as many people.”
Employers today are not hiring because they’ve learned new production techniques that require less personnel. Stock holders tend to like less personnel because profit margins steadily increase, provided the quality of the product and service to the community does not decline.
The aeronautics and construction industries have traditionally been the backbone of the Antelope Valley economy. The losses at Lockheed-Martin, Northrup, Boeing, et. al. are permanent and have been since the early 1990s. The local construction industry has been hit hard during the six-year economic decline, but there has been a rebound, according to David Weinberg, a California economist who spoke with the publication American Public Meeting Marketplace last summer. “Part of the problem is that there’s hardly any residential construction over the past seven years. Meanwhile, the population has grown steadily, credit standards and loosening, and unemployment in California is dropping faster than the rest of the country.”
Weinberg studied a two-man team, a real estate agent and a contractor, who held on to a small plot of land in Lancaster even after some of their other land investments had turned sour. After seven years, the vacant lot is getting developed with funding from private investors. The real estate agent told Weinberg that, sometime this year, he expects to sell out the 44 homes being constructed, his forecast based on current sales trends. “This activity is a sign that a new construction boom is coming to California,” Weinberg said.
The Bureau of Labor Statistics reported this month a slight decline in employment in the construction industry for December 2013 (-16,000), specifically jobs involving nonresidential specialty trade contractors who lost 13,000 jobs, reversing small gains made since Fall 2013. The Antelope Valley, since 2009 has felt the brunt of the state’s decline in construction which dropped off by 60 percent from 2005-2009; until then, the region was a mecca for new-home building and residential immigration from greater Los Angeles County, San Bernardino County and Ventura County.
Somewhat contradicting this report was the 2013-2014 mid-year economic forecast from the Los Angeles County Economic Development Corp. (LAEDC) which has predicted an increase in housing and construction, but conceded that improvement in the regional economy is uneven across counties and industries. While private-sector expansion is on the uptick, improvements on the labor front remain at a “lackluster” pace. The report indicated that housing starts are showing signs of life, and many planned infrastructure projects will come online. All told, the construction industry could add as many as 33,000 jobs by the end of 2017, producing an average annual growth rate of 5.4 percent.
“The private sector will build upon the gains of 2013 with nearly all sectors expected to demonstrate job gains this year and next,” said Robert Kleinhenz, LAEDC chief economist and the forecast’s lead author. But Kleinhenz stopped short of predicting a return anytime soon to pre-recession employment levels. “Los Angeles County won’t likely return to those levels until 2015 or 2016 at the latest,” he added. Kleinhenz found that the industry with the largest expected new job creation potential in L.A. County is the administrative support services industry, which is expected to add 63,790 jobs by 2017. Health care and social assistance positions will follow with about 61,610 expected jobs. Taken together, the report found, the top 20 industries locally are expected to add more than 350,000 new jobs through 2017.
The LAEDC study also found that almost 3,000 building permits were issued last year for single-family homes, representing a year-over-year increase of 16.3 percent. Nonresidential permits issued during the same period totaled just more than 2,000. The foreclosure crisis had blunted the demand for new home construction, the report found, but it has also attracted buyers looking for “bargains” in lower priced properties. Southern California’s housing market has posted double-digit gains since 2012, being fueled primarily by an influx of foreign money, tight inventories and the housing market’s ongoing recovery.
There has been good news regarding the Palmdale Power Plant which received high marks last fall from the LAEDC. “During construction alone, the project would directly support an estimated 800 construction trades jobs—many of which will be drawn from the local surrounding communities,” wrote LAEDC President and CEO Bill Allen in a support letter sent to city officials. “Once on line, the new power plant should sustain an estimated 35 permanent highly skilled, high-wage jobs, not to mention the indirect and induced job impacts of this project, which could be considerable.”
Municipalities within the Antelope Valley have tried to take advantage of the region’s Enterprise Zone which stretches more than 61 square miles primarily in Palmdale and Lancaster and in some unincorporated sections of L.A. County. This a state-designated area which offers tax incentives for businesses situated within its boundaries, allowing them to take advantage of a hiring tax credit, a sales and use tax credit, a business expense deduction, a net operating loss carryover and an interest deduction for lenders. More than 1,300 acres locally have been designated as a “Foreign-Trade Zone,” a classification that offers international traders opportunities for cost-saving business ventures.
The City of Lancaster is offering a “Job Search Boot Camp,” a series of workshops led by career specialist Joanna Mitchell. Offered six times through March in the eastern and western regions of the city, the workshops are designed to help participants break through whatever barriers they may confront in their job search. Workshops will take place at Lancaster City Park on February 19 (5 to 9 p.m.), March 1 ( 8:30 a.m. to 12:30 p.m.); at Skytower Park on February 8 (8:30 a.m. to 12:30 p.m.) and on March 13 from 5 to 9 p.m.
“From effective job search techniques, to interview skills, the Job Search Boot Camp will provide participants with the ‘edge’ they need when searching for a job, including how to break into the ‘hidden’ job market,” Mitchell said. You may register online at: cityoflancaster.org/recreation, or call Parks, recreation and Arts department at (661) 723-6077.
Palmdale’s South Valley WorkSource Center (SVWSC) is continuing its campaign to place more local residents onto the work rolls. On Wednesday it hosted a special recruitment program for the rail manufacturing company Kinkishayro, expected to go on line in Palmdale later this year. The SVWSC team was there to recruit “production material planners” and “quality control inspectors.” For more details about these employment possibilities, call the SVWSC at (661) 265-7421. Also, the City of Palmdale will host “The Edge: Get That Job Part 1,” an interview preparation skills seminar on February 3 from 7 to 8:30 p.m. at Marie Kerr Park Recreation Center, 2723 Rancho Vista Blvd. A second seminar will take place on February 10. The seminars are $20 each and additional sessions will take place through April 28. For more details, call (661) 267-5611.
