Opinion + Voices

Forecast director: L.A. has three big problems

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Edward Leamer

Edward E. Leamer is director of the UCLA Anderson Forecast and the Chauncey J. Medberry Professor of Management at the UCLA Anderson School of Management. This op-ed appeared on April 17, 2014, in the Orange County Register.

This weakness in job formation isn't going away. The recent modest economic bounce described by the latest UCLA Anderson Forecast doesn't mean the long-term jobs crisis is solved. We are just getting back some of the jobs we lost in the 2008-09 recession. We have to find a way to grow our jobs again on a sustained long-term basis.The United States has had 25 percent growth in payroll jobs since 1990. Can you name the three major cities that had job declines over that same period? You might find it easy to think of two: Detroit and Cleveland. The third, and actually the worst of the three, was Los Angeles, which lost 3.1 percent of its payroll jobs over those two decades.

Even in California's most successful cities, San Francisco and San Jose, there has been little or no overall job growth in the last decade, and the substantial progress up north has supported jobs and income for the few, not for the many. That tells us something important. In the 20th century, progress was widely shared across skill and education levels, but in the last couple of decades, progress has been distressingly uneven, focused on the 1 percent, an economic reality that is poorly suited to the uneven character of our workforce in Los Angeles.

Los Angeles thus has two problems that require two kinds of treatments. We need to find ways to create and retain or attract the entrepreneurs, the innovators, the creative types who are driving economic growth in the post-industrial world in which we live. And we need to make the investments in knowledge and skills that are the foundation of good jobs for the rest of the hard-working people in Los Angeles.

Our number one problem is surely a failing public school system. The number two problem is city and state governments that say “go away” to the businesses that create jobs. In addition, traffic congestion and inadequate quality-of-life infrastructure largely offset our number one asset: Southern California sunshine.

We have our own Silicon Beach in Santa Monica and Venice, in part because the one thing we could not pave over was the ocean. But we did manage to pave our river. We need to take Los Angeles back from the automobile, reduce traffic congestion, repair sidewalks and in general, develop pleasant places where folks can enjoy the balmy winters, take a walk, ride a bike and in general, enjoy the local environment.

Education is critical. Detroit and Cleveland have rusting factories, but in Los Angles the rust problem is in our K-12 school system. That's our number one problem. Effective educational institutions both create and attract the innovators and also help prepare the broader productive workforce of tomorrow. A 21st century workforce needs to compete in a globalized technology-intensive world, where robots and microprocessors are doing more of the work, becoming more economically attractive as they work for low wages, put in long hours in crummy working conditions and never join unions.

While K-12 is struggling, Los Angeles is blessed with some of the best universities in the world. In addition to training the innovators of the future, our universities support the neighborhood cultures that help attract talent from other regions. But our current higher education is hopelessly overpriced. That's another subject for another time.

There is much to be done to get Los Angeles moving in the right direction, but with the combined and committed effort of business, government and education, we will be able to get the job engine growing again.

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