It might not seem that way in many parts of town, but payroll jobs grew 3.8 percent in 2012, which is the sharpest increase since 2005 and nearly double the national rate, according to Beacon Economics. But the gains were concentrated in only four of the city's 15 council districts, and that, along with a 2.3 percent drop in wages, would suggest an economy that's badly splintered - even more than usual for L.A. From the Business Journal:
"This is very much a good news/bad news report," Beacon economist Christopher Thornberg told city councilmembers Wednesday. "Overall, the city economy is improving, but the growth is very uneven and has not spread to all parts of the city." Thornberg said construction activity is one of the bright spots, with permits for multifamily units jumping 28 percent last year to 6,766 units and the total value of all building permits rising more than 20 percent to $2.9 billion. Consumer spending in the city was strong last year as sales tax receipts rose 5 percent to $452 million.
In this week's Business Update on KPCC, and also in Los Angeles magazine this month, I point out that the improving numbers belie the long-running myth that L.A. is a bad place to do business. Far from it. From KPCC:
Mark Lacter: If anything, city officials have been too accommodating. Frankly, the anti-business rap never made much sense when you consider the thousands of companies that start up here each year. A study by the accounting firm PricewaterhouseCoopers ranks L.A. particularly high when it comes to ease of doing business, which runs counter to the conventional wisdom.
Steve Julian: You're not saying it's truly easy, are you?
Lacter: Easy, no. There certainly are plenty of reasons for business owners to pull out their hair. And those hassles, along with an unemployment rate that remains quite high, has given developers and other businesses the leverage to ask for various giveaways. All they have to do is say that their projects will generate more jobs, and city officials tend to respond favorably. And, by the way, job creation doesn't always determine economic growth, certainly not in the short term.
Julian: We all remember during the mayoral campaign, candidates were talking about how their policies would lead to lower unemployment...
Lacter: ...right, almost like they could pick up jobs in the produce section at Ralphs. Well, it doesn't quite work that way. Thing is, the city of L.A. doesn't need to cut so many deals - the local economy is rich enough and broad enough to keep prospering. Which is why city officials might want to lay off the incentives, and focus on the basics - public safety, transportation, parks, libraries. Do that right, and the business climate will take care of itself.