The Economy and Poverty in Los
Angeles County
MENDing Poverty Conference
June 9, 2015
Robert A. Kleinhenz, Ph.D.
Chief Economist, Kyser Center for Economic Research, LAEDC
Outline
• U.S. Economy
• California Economy
• L.A. County Economy
• Income & Poverty in the County
• Conclusion
Kyser
KyserCenter
Centerfor
forEconomic
EconomicResearch
Research
U.S. Economy
Kyser Center for Economic Research
U.S. Unemployment Rate
15.0%
Seasonally Adjusted, May 2015: 5.5%
U.S.
Average 1990-Now
10.0%
5.0%
Jan-90
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
0.0%
Source: US Bureau of Labor Statistics
Kyser Center for Economic Research
Real Gross Domestic Product
Annual % change
12.0%
10.0%
GDP 15Q1: -0.7%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
2014
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
-6.0%
Source: US Bureau of Economic Analysis
Kyser Center for Economic Research
Key Sectors of Macroeconomy
 Consumer Sector
 Business Sector
 Government
 International Trade
Kyser Center for Economic Research
U.S. Economic Forecast
2012
2013
2014
2015f
2016f
Real GDP - Annual %
Chg.
2.3%
2.2%
2.4%
2.5%
2.8%
Nonfarm Jobs - Annual
% Chg.
1.7%
1.7%
1.9%
2.0%
1.7%
Unemployment Rate
8.1%
7.4%
6.2%
5.4%
5.1%
Consumer Prices Annual % Chg.
2.1%
1.5%
1.6%
0.3%
2.2%
Forecast Source: LAEDC (May 2015)
Kyser Center for Economic Research
U.S. Outlook – What to Watch
 Oil Prices
 Fed Policy
 Global Outlook
 Wage Gains
Kyser Center for Economic Research
Household Purchasing Power Falling
Median HH Income in Thousands of 2013 Dollars
60
56.9
56.4
55
51.9
50
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
40
1999
45
Source: Census Bureau
Kyser Center for Economic Research
California Economy
Kyser Center for Economic Research
Jan-90
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Labor Mkts in US & CA Nearly Healed
15.0%
Unemployment Rate
U.S.
CA
6.3%
10.0%
5.0%
0.0%
Source: US BLS, CA EDD
Kyser Center for Economic Research
California Adding Jobs Faster than U.S.
5%
YTY % change in nonfarm jobs, seasonally adjusted
4%
US
3%
CA
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
-6%
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
-7%
Source: US BLS, CA EDD
Kyser Center for Economic Research
California Economic Forecast
2012
2013
2014
2015f
2016f
Nonfarm Jobs annual % chg.
2.4%
3.0%
2.2%
2.2%
2.1%
Unemployment Rate
10.4%
8.9%
7.5%
6.7%
6.3%
Personal Income - annual
% chg.
7.1%
2.8%
4.7%
4.4%
5.1%
Total Taxable Sales - %
chg.
7.3%
5.8%
5.7%
4.2%
6.1%
Housing Permits thousands of units
57.6
82.3
85.3
110.0
135.6
Forecast Source: LAEDC
Kyser Center for Economic Research
Los Angeles
County
Kyser Center for Economic Research
Local Unemployment Rates
20%
Apr 2015
LA - 7.1%
OC - 4.1%
IE - 6.2%
20%
18%
16%
16%
14%
14%
12%
12%
10%
10%
8%
8%
6%
6%
4%
4%
2%
2%
0%
0%
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
18%
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
Los Angeles County Nonfarm Jobs
YTY % change in nonfarm jobs
Apr 2015: +109,600; 2.6%
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0%
-5.0%
-6.0%
-7.0%
-8.0%
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
LA County Nonfarm Employment
Millions of Nonfarm Jobs
4.5
4.23
4.19
4.0
3.95
3.89
3.91
2009
2010
2011
4.01
4.13
4.23
4.29
2014
2015
YTD
3.5
3.0
2.5
2.0
2007
2008
2012
2013
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
Job Trends by Industry – Los Angeles
YTY % change in nonfarm employment by industry, not seasonally adjusted
Apr 2015: +109,600 jobs, +2.6% YTY; u-rate: 7.1%
Construction
Educational Services
Wholesale Trade
Leisure & Hospitality
Information
Transportation, Warehousing & Utilities
Administrative & Support & Waste Services
Health Care & Social Assistance
Retail Trade
Government
Financial Activities
Professional, Scientific & Technical Services
Manufacturing
-2%
6.6%
6.6%
4.4%
4.3%
3.6%
3.5%
2.9%
2.6%
2.2%
2.1%
0.7%
0.1%
-0.1%
0%
2%
4%
6%
8%
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
Major Industries in Los Angeles County
TRADED INDUSTRIES
(Generate New Income)
•
•
•
•
•
•
•
International Trade
Entertainment
Business Services
Aerospace
Fashion & Apparel
Tourism
Knowledge Creation
LOCAL INDUSTRIES
(Circulate Income)
• Retail Sales
• Leisure & Hospitality
• Health Care/Social
Assistance
• Nonprofit Sector
Kyser Center for Economic Research
Container Throughput
San Pedro Bay Ports
Millions of TEUs
2014
2013
2012
2011
Year-toDate
2010
2009
2008
2007
2006
2005
11.8
2004
2003
11.8
15.2
4.7
4.6
'15YTD
13.1
14.1 14.0 14.1 14.6
14.3
14.2
'14YTD
15.8 15.7
Apr 2015 YTD: -3.1%
Sources: Ports of Los Angeles and Long Beach; forecast by LAEDC
Kyser Center for Economic Research
L.A. County Trans/Warehousing &
Wholesale Employment
Apr 2015 YTY:
340,000
Trans/Warehousing/Util. +5,600 jobs, +3.5%
Wholesaling +3,700 jobs, +3.1%
290,000
240,000
190,000
140,000
90,000
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
40,000
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
On-Location Film Production
Days by Type
60
Production Days, 1000s
50
40
30
20
10
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Feature Films
Television
Commercials
Other
Source: Film LA
Kyser Center for Economic Research
L.A. County Motion Picture & Sound
Recording Employment
160,000
Apr 2015 YTY: +3,700 jobs, +3.1%
140,000
120,000
100,000
80,000
60,000
40,000
20,000
Jan-15
Sep-14
May-14
Jan-14
Sep-13
May-13
Jan-13
Sep-12
May-12
Jan-12
Sep-11
May-11
Jan-11
Sep-10
May-10
Jan-10
Sep-09
May-09
Jan-09
Sep-08
May-08
Jan-08
0
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
L.A. County Manufacturing Employment
Apr 2015 YTY – Durable: +500, +0.2% | Nondurable: -900, -0.6%
500,000
Durable Goods
450,000
Nondurable Goods
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
Jan-15
Sep-14
May-14
Jan-14
Sep-13
May-13
Jan-13
Sep-12
May-12
Jan-12
Sep-11
May-11
Jan-11
Sep-10
May-10
Jan-10
Sep-09
May-09
Jan-09
Sep-08
May-08
Jan-08
0
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
Manufacturing Trends
Adding Jobs:
Losing Jobs:
 Metal Mfg
 Furniture
 Pharmaceuticals
 Miscellaneous
Durable Goods
 Machinery Mfg
 Petro-Chemical
 Food (slightly)
 Aerospace (slightly)
 Electronics
 Apparel/Textiles
Kyser Center for Economic Research
L.A. County Professional & Business
Services Employment
Apr 2015 YTY: +10,400 jobs, +1.7%
650,000
600,000
550,000
500,000
450,000
400,000
350,000
300,000
250,000
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
200,000
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
L.A. County Retail Employment
Apr 2015 YTY: +8,800 jobs, +2.2%
500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
Feb-15
Oct-14
Jun-14
Feb-14
Oct-13
Jun-13
Feb-13
Oct-12
Jun-12
Feb-12
Oct-11
Jun-11
Feb-11
Oct-10
Jun-10
Feb-10
Oct-09
Jun-09
Feb-09
Oct-08
Jun-08
Feb-08
0
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
L.A. County Leisure & Hospitality
Employment
Apr 2015 YTY: +19,700 jobs, +4.3%
500000
450000
400000
350000
300000
250000
200000
150000
100000
50000
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
0
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
L.A. Health Care and
Social Assistance Employment
Apr 2015 YTY: +15,900 jobs, +2.6%
700,000
600,000
500,000
400,000
300,000
200,000
100,000
Feb-15
Oct-14
Jun-14
Feb-14
Oct-13
Jun-13
Feb-13
Oct-12
Jun-12
Feb-12
Oct-11
Jun-11
Feb-11
Oct-10
Jun-10
Feb-10
Oct-09
Jun-09
Feb-09
Oct-08
Jun-08
Feb-08
0
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
L.A. County Construction Employment
Apr 2015 YTY: +7,800 jobs, 6.6%
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
0
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
Residential Building Permits
Issued in Los Angeles County
30
Multi-Family
Single-Family
Permits issued, thousands
25
20
15.2 13.7
16.3
15
10
5
18.7
12.9
12.6
10.3
11.8 11.9 10.1
0
'04
'05
'06
3.5
7.5
'07
5.0
14.6
16.0
8.0
8.0
3.6
4.3
4.7
5.6
'13
'14
'15f
16f
3.4
2.1
2.4
2.4
2.8
'08
'09
'10
'11
'12
Source: CIRB, California Home Building Foundation, forecast by LAEDC
Kyser Center for Economic Research
Home Sales & Median Prices
Los Angeles County
New and existing, single-family homes and condos
12,000
Sales
$ Thousands
$600
Apr. 2015: $485,000, +10.0% YTY, Sales: +6.0% YTY
10,000
$500
8,000
$400
6,000
$300
4,000
$200
2,000
Home Sales
Median Home Price
$100
0
$0
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
Source: CA Real Estate Research Council; DataQuick
Kyser Center for Economic Research
Homeownership Fundamentals, 2013
State
Current Median
Household Income
Median Home Price
Median Home Price
to Household Income
Housing Affordability
Index – Q1-2015
Homeownership
Rate
US
California
LA County
$51,939
$57,528
$57,480
$197,400
$407,150
$405,630
3.8
7.1
7.1
61
34
31
64.9%
55.3%
46.9%
Source: US Census, C.A.R.
Kyser Center for Economic Research
Apartment Rents – Southern California
Los Angeles
Orange
Riverside
San Bernardino
Ventura
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
14Q1
13Q1
12Q1
11Q1
10Q1
09Q1
08Q1
07Q1
06Q1
05Q1
600
Source: CA Real Estate Research Council
Kyser Center for Economic Research
Apartment Vacancy Rates –
Southern California
12.0
Percent vacancy, quarterly averages
8.0
4.0
1q06
2q06
3q06
4q06
1q07
2q07
3q07
4q07
1q08
2q08
3q08
4q08
1q09
2q09
3q09
4q09
1q10
2q10
3q10
4q10
1q11
2q11
3q11
4q11
1q12
2q12
3q12
4q12
1q13
2q13
3q13
4q13
1q14
2q14
3q14
4q14
0.0
Los Angeles
Orange
Riverside
San Bernardino
Source: CA Real Estate Research Council
Kyser Center for Economic Research
Income Fundamentals, 2013
State
Real Median Household Income
U.S.
California
L.A. County
$52,250
$60,190
$54,529
Income Distribution (Households):
< $10,000
7.6%
6.2%
6.9%
$10,000 to $24,999
16.2%
15.0%
17.1%
$25,000 to $34,999
10.3%
9.1%
9.7%
$35,000 to $49,999
13.6%
12.3%
12.4%
$50,000 to $74,999
17.9%
16.8%
16.7%
$75,000 to $99,999
11.9%
11.9%
11.6%
$100,000 to $149,999
12.7%
14.5%
13.2%
>$150,000
9.9%
14.3%
12.4%
Below Poverty Level
15.4%
15.9%
17.8%
Source: US Census
Kyser Center for Economic Research
More High & Low Income HHs
in L.A. County
U.S.
L.A.
County
<$24,999
23.8%
24.0%
$25,000 to $99,999
53.6%
50.4%
>$100,000
22.6%
25.6%
Total
100.0%
100.0%
Income Range
Source: US Census
Kyser Center for Economic Research
Educational Attainment, 2013
U.S.
California
L.A. County
Educational Attainment (Population > 24 yrs)
< 9th grade
5.8%
10.1%
13.6%
9th-12th grade
7.6%
8.2%
9.5%
High school grad
27.8%
20.8%
20.4%
Some college
21.1%
22.0%
19.4%
Associate’s degree
8.1%
7.9%
7.0%
B.A.
18.4%
19.5%
19.7%
Graduate degree
11.2%
11.5%
10.4%
Source: US Census
Kyser Center for Economic Research
Conclusion
Kyser Center for Economic Research
LA County Nonfarm Employment
Millions of Nonfarm Jobs
4.5
4.23
4.19
4.0
3.95
3.89
3.91
2009
2010
2011
4.01
4.13
4.23
4.29
2014
2015
YTD
3.5
3.0
2.5
2.0
2007
2008
2012
2013
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
LA County Nonfarm Employment
Millions of Nonfarm Jobs
4.5
4.18
4.0
440K Lost 12 Years to Recover
3.74
4.23
4.19
3.89
3.5
3.0
2.5
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015 YTD
2.0
Source: CA EDD, Labor Market Information Division
Kyser Center for Economic Research
Conclusion
• Economy Growing This Year & Next
• Real Household Income Falling Since 1999
• Higher % of Low Income HHs in LA County
• Educational Attainment Lagging in LA County
• Ed Attainment ->Incomes->Escape Poverty
Kyser Center for Economic Research
The Economy and Poverty in Los
Angeles County
Thank You!