For the past two decades, California’s most populous city has not been creating jobs fast enough for all of its working-age residents. With its population expected to increase by more than 800,000 by the year 2020, the city needs to accelerate a pro-jobs strategy in 2014 to support growth opportunities for the region’s most competitive industries.
For decades, Los Angeles was California’s top job creator. Its human and natural resources, diverse economy, and creative and innovative spirit attracted people from around the world looking for an opportunity to achieve success regardless of their background or skill level. The region’s previous top employers were in aerospace, entertainment and manufacturing. Today, they are the federal, state and local governments, and the Los Angeles Unified School District. The recent report by the LA 2020 Commission only reinforces this concern.
The lack of private-sector job growth has caused Los Angeles to become the state’s leader in net domestic migration to states like Arizona, Nevada and Texas, according to the Great California Exodus Report issued by the Manhattan Institute. Throughout the past decade, these three states alone have seen an increase of more than $15 billion in new taxable income from relocating Californians, and since Los Angeles represents about one-third of California’s tax collections, this growing loss is the city’s loss. As noted in “What Brain Drain?” by the Milken Institute, we have been able to mitigate the loss of native Californians through the arrival of foreign-born workers. But with domestic visa programs a shadow of what they were pre-2001, many workers are forced to leave, and we often wind up educating and training our competition.
Mayor Eric Garcetti and the City Council’s strong leadership can turn this around by leveraging the city’s economic and workforce development tools, which include land-use and regulatory policies, business incentives, infrastructure, and workforce training policies and programs, to implement the following:
• Strengthen City Government’s Role to Foster L.A.’s Technology, Entertainment and Creative Environment. Los Angeles has long been an entrepreneurial and creative environment as well as a top intellectual capital and innovation center. City Hall’s economic development strategy should leverage its underutilized real estate assets to encourage private investors to develop industrial parks, and incubator and accelerator workspaces for the region’s most promising industry sectors – the creative economy, biomedical, bioengineering, digital media, advanced manufacturing, apparel, technology and entertainment. This should be done in collaboration with the region’s colleges, universities, foundations, non-profits, all leaders in research, academic and community programs, and workforce talent. The Governor’s Office of Business and Economic Development could lend a hand by supporting simple land-use approval and permitting processes for urban infill and transit-oriented projects, new tax increment financing programs and a lower threshold for local voter-approved bonds for much needed infrastructure investment.
• Develop Los Angeles as a Top Tourism and Convention Destination. The L.A. Tourism and Convention Board set a goal to attract 50 million total visitors by 2020. This would add $44.5 billion to the region’s economy and support more than 392,000 jobs. City Hall should continue to encourage private-sector developers to build more hotels around the Los Angeles Convention Center and develop additional backup plans, if the development of a stadium does not move forward, to upgrade the center’s facilities to attract larger conventions. L.A.’s congressional delegation should push federal officials to approve a 24-7 immigration and customs program at Los Angeles International Airport as well as stress the need to expedite the travel visa process for the rising population of Asian and Latin American travelers who have made Los Angeles their top travel destination.
• Invest in a World-Class Transportation System. Three significant transportation projects are critical to building L.A.’s economy: completing development of LAX’s ground transportation system, including separating the north runways and connecting L.A. Metro’s rail system to the airport’ terminals; approval of proposals from BNSF and Union Pacific to invest $1 billion in their rail facilities at the Port of Los Angeles; and accelerating the build-out of Metro’s 12 new public rail lines to connect the region’s neighborhoods and commercial hubs. These projects would be a catalyst for economic and social development, and they would significantly ease traffic congestion, spur trade activity, improve air quality and create more than 250,000 thousand jobs. Although costly, the potential impact not only on the local economy but also on long-term public revenues will far outweigh expenditures over the coming decades. Working with the city, L.A.’s delegations in Sacramento and Washington must step up efforts to eliminate unnecessary regulatory hurdles and fast-track California Environmental Quality Act approvals while advocating more innovative funding programs such as Metro’s America Fast Forward Federal Bond proposal and California’s Infrastructure Bank.
• Foster the Development of a Skilled Workforce. The region’s workforce development system needs to further adjust its programs and policies to better align with demographic shifts, technological advancements and global labor trends. The success of this effort remains tied to the region’s local universities, community colleges and private-sector industries, which all play a crucial role in rebuilding and expanding apprenticeship programs and the further development of LAUSD’s programs that focus on getting more students involved in science, technology, engineering, math and the arts.
L.A.’s most promising job-creating opportunities are right in front of us. With vision, collaboration and political will, Los Angeles will have a dynamic, competitive economy for years to come.
Michael Kelly is executive director of the Los Angeles Coalition for the Economy & Jobs. Kevin Klowden is director of the California Center at the Milken Institute.