Shift in L.A. jobs

There are two basic types of jobs: the payroll kind, where you have steady employment at a single company and receive the requisite benefits; and the non-payroll kind, usually involving freelancers, independent contractors and laborers who go from job to job and don't receive benefits. It's the second type - often lower paid and less stable - that, for better or worse, has become an increasing part of the L.A. workforce. The Business Journal's Howard Fine looks into the numbers in this week's issue:

If you include the number of informal jobs, the number of people with jobs in Los Angeles County has trended up modestly over the past 20 years, topping out in 2007 at 4.7 million, about 400,000 jobs more than the 1989-90 payroll employment peak. Even with the deepest recession since World War II pushing the county's unemployment rate past 11 percent, the overall employment level in June was still about 120,000 above the 1989-90 peak.

The problem is that government relies on business and payroll taxes. If the payroll portion of the workforce is not growing it will create shortfalls in tax revenues (keep in mind that the population keeps getting larger, so there is more demand for services). There's a good bet that whenever hiring does pick up it will involve a lot of these non-payroll jobs.

Over the last 20 years, much of the county's job growth has come from the so-called "informal economy," in which workers are not put on company payrolls. These include sole proprietors and consultants, independent contractors and those who get paid in cash. These workers are not counted in the closely watched payroll job figures. But they show up in household survey data, in which L.A. County residents are asked if they have jobs.

Many of these workers also show up in another measure of the local economy: the number of "nonemployer firms" that do not have payrolls. In 2007, the U.S. Census Bureau classified 842,000 entities in Los Angeles County as nonemployer firms, up nearly 50 percent from 1997. Nationwide, the growth rate for that period was about 35 percent, indicating that the county is one of the major hotspots for these types of businesses.