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ALL WORKED UP
Things are looking better for San Diego’s job market, but certain sectors fave a slower recovery
By Dave Good, Pacific San Diego Magazine
There is good news, and there is bad news.
First, the good news: If you’ve got a job, chances are better than good, say economists, that you’re safe from recession-based downsizing, which has become a thing of the past.
The bad news: If you’re currently unemployed in San Diego, those same economists say that, without a massive infusion of new jobs into the community, the next few years will continue to be difficult.
“The San Diego labor market is pretty weak right now,” says Dr. Alan Gin, an economics professor at USD. “The local unemployment rate is 10.8 percent.”
That means roughly 171,400 San Diegans are presently without work in a state that has the third highest overall unemployment ranking in the nation. According to The Associated Press, 12.3 percent of Californians are unemployed. Michigan ranks second with 13.2 percent, and Nevada is in first place at 14.2 percent.
Seth Stein has been watching fluctuations in the San Diego economy for the last dozen years. He is the president of Abbot Staffing Group, a subsidiary of one of this area’s largest staffing companies, the Eastridge Group.
“We’re not out of the woods,” he says. “I think there is a perception that things are getting a little better, but it’s going to be a long road to recovery.”
Part of the problem with hiring full-time workers right now, he says, is that employers can’t predict demand. So, instead, they hire temps.
“During this time of year, you’ll see a temporary decline in the hospitality industry. The summer rush,” he says, “is somewhat over.”
Earlier in the year, local job losses were heaviest in manufacturing and in financial services. “And construction,” Stein says, “remains fairly flat.”
“Unemployment is still really high,” says SDSU finance professor Daniel Seiver, “and it’s going to stay high for a while.” The 5.6 percent unemployment of healthier US economies in the past is becoming a rapidly fading memory. “But,” says Seiver, “some businesses are beginning to hire again.” And if there is a silver lining in terms of local job recovery, he says it will be in the fields of health care and technology.
“It is seeing a nice surge,” says Stein. “And on the manufacturing side, medical devices continues to do well. San Diego is a hub for medical devices and biotech. Defense is big,” he says, “but biotech has surpassed that, as we have diversified our economy over the past 15 to 20 years.”
Qualcomm may still be the largest employer in San Diego County, but Stein says defense subcontractors are projecting growth as well. “I know that there are several of them in San Diego that are involved with working on the unmanned warplane projects.”
In response to the hemorrhaging within the construction industry, (estimates say that more than 30,000 local construction workers have been idled by the recession), San Diego councilmember Todd Gloria says the City Council has passed measures that would defer building fees and simplify permit processing.
“These are things that can really help make small differences for businesses that are trying to construct projects,” says Gloria. “We also passed a small-local- business enterprise program.” He says that the city awards more than $200 millionworth of contracts each year. If applicants are local and are planning to hire locally, Gloria says they will be given incentives not available to applicants from outside the city. “We want to take those taxpayer dollars and keep them as local as possible.”
Action sports is a growth market in San Diego.
“Bill Walton heads Connect,” says Stein, “a locally-based organization that supports the development of companies, jobs and investments to the active lifestyle sector. It makes sense. You’ve got Roadrunner Sports headquartered here. You’ve got a lot of [sports] apparel companies here, and I imagine they’ll go after some form of investment in San Diego, because Orange County is a huge hub. Oakley’s up there, Hurley’s up there, surf board companies are up there.” Stein says that bicycle-parts manufacturing is big in San Diego. “And,” he says, citing Callaway and Taylor Made, “San Diego is a golf-manufacturing hub.”
Stein points to another California growth industry: video gaming. “Arguably the biggest companies in the world are here [in California], and there is a significant presence in San Diego.” He says the gaming industry traditionally gains financial strength around the holidays.
Southern California is also a proving ground for the new “green” industries. Stein says that San Diego is the ninth largest sector in the world for clean technology. “The bottom line is that the demand for skilled labor is still there,” he says.
But the prognosis for recovery is that it will be a slow procedure.
“Our index of economic indicators is up, and it has been up for 16 months in a row, which is a good sign,” says Alan Gin, “but it hasn’t been rising very strongly. That suggests that we probably won’t have a double-dip in the recession, but that the recovery is going to take a long time.”
And, while a fraction of displaced workers around the county are indeed finding gainful employment, analysts say that most new jobs will come with smaller paychecks and reduced benefits.
“The implication is that there is going to be a lower standard of living for a large block of the population,” says Gin. He says that the middle class was hardest hit by the recession. “When those jobs were lost, we also lost jobs at the lower end in retailing and in services that [the middle class] would have spent money on.”
Todd Gloria predicts another two years before San Diego will have the kind of growth that feels like a solid recovery. “That’s further off,” he says, “than any of us would like.”
In the end, it seems that creating jobs for unemployed and underemployed San Diegans will require patience, a solid plan…and a whole lot of work.
Pacific San Diego Magazine