Gearing Up or Grinding Down?

Rust or Restoration
Rust or Restoration

It's hard to tell which way the county's economy is going, although a new report from Beacon Economics wants to be encouraging (covered here, here, and here).

The state and local economies are improving in a patchwork sort of way, the report finds, but the report's authors are nervous about contrary forces. They even finger the apocalyptic ranting that some political campaign advisors have embraced:

Having unleashed rightist mad dogs against a Democratic sweep in the 2008 elections, perhaps some pundits have begun to worry that preaching the end of days might lead to Harold Camping-style disillusionment or become a self-filling prophecy. Neither is good for business, it seems.

Believing that the future will be less bleak depends on where you are in the county's economy. Entrepreneurs - ever optimistic - started up almost 22,000 small businesses between 2007 and 2009. (And small is small indeed, with less than five employees.)

Middle managers saw the number of medium- and large-size businesses decline, along with their job prospects.

Production line workers had even fewer options. Manufacturing output went up significantly between 2009 and 2010, but only because of more automation and longer hours, and not because of increased employment. Since the county's industrial base is weighted heavily toward traditional manufacturing, employment numbers here will lag, and it's very likely that lost jobs in traditional manufacturing are gone forever.

Los Angeles County lost over 323,000 jobs in all employment sectors between 2007 and 2009 and recovered less than 8,000 in 2010.

The report gives this rotten situation a certain spin:

The woods are, in fact, dark and deep. And for many of the unemployed, there are no alternatives. Job retraining is a hollow offer for the vast majority of poorly educated and older workers. Many have left the county since 2007, preferring genteel poverty in a state where the cost of living is lower. Their disappearance contributed to the continuing decline in the non-Hispanic white population in Los Angeles County.

On balance, tourism, goods movement, and retail sales are doing ok, according to Beacon Economics. Home prices and job creation and employment mobility aren't doing well at all.

The bottom line? If you have a job, keep it. If you assemble something with your hands, worry about your job evaporating. If you're unemployed, maps to South Carolina and Kansas are available. If you're graduating from college, you might find a part-time job as a hotel desk clerk. (It would be helpful if you spoke Mandarin.)

And if you're a hopelessly optimistic entrepreneur, there are lots of empty storefronts available where some other little guys recently went bust.

The image on this page was taken by flickr user dmpop. It is used under a Creative Commons License.