Earlier this month, the U.S. Bureau of Labor Statistics reported that the unemployment rate edged up to 9.2%, a second-consecutive increase that cast another cloud over the economy.
The nation’s sputtering job machine and the fact that California still has the second-highest unemployment rate in the nation, at 11.9%, combine to paint a bleak picture.
It is no surprise that jobs are the nation’s No. 1 concern.
For Orange County to regain the luster it lost in the downturn, we must start producing a greater number of higher-wage jobs.
According to an analysis by the National Employment Law Project, lower-wage industries that pay between $9 and $13 an hour accounted for 23% of job losses but 49% of the more than 1 million jobs added across the country from January 2010 to January 2011.
High-Wage Hit
Higher-wage industries, paying $19.05 to $31.40 per hour, constituted 40% of job losses and only 14% of recent growth.
The problem today is the same as it has been for several months: the loss of high-wage jobs.
We believe there are three areas that can help propel Orange County’s high-wage jobs machine forward: 1) building off the success of the local technology and healthcare industries to promote the area as a biotechnology hub; 2) bringing in a greater share of venture capital to encourage startup business growth; 3) exceeding education and training across all levels, from K-12 to college and post-grad.
First, the biomedical industry is proven to provide career opportunities and above-average pay. The state’s Employment Development Department (EDD)—in a projection of potentially fast-growing occupations in Orange County between 2008 and 2018—put biomedical engineers at the top of the list.
The median annual salary for biomedical engineers is $88,254, and the EDD projects 52.2% growth in the profession statewide.
Groups such as the Orange County Business Council, Biocom and the California Healthcare Institute have done much to promote the biomedical industry in Orange County and around the state.
Now it is time for policymakers to show a commitment to the industry. What’s needed are tax credits and other incentives that help foster innovation, drive business investment and encourage high-wage industry sectors to expand, increasing Orange County’s competitiveness.
Second, we need to bring in a greater share of venture capital investment to Orange County. According to the Summer 2011 Pepperdine Private Capital Markets Project, 22% of venture capitalists who responded to the survey said they plan to invest in information technology over the next 12 months.
Orange County is an IT hub, and there needs to be a plan to attract more investors to the southern part of the state. The plan must include ways to market OC as well as specific improvements that need to be made to attract capital. Orange County must ensure that infrastructure, public safety and other government services continually exceed the nation’s average.
Such steps would show businesses that the county has the foundation for long-term growth.
Investing in Education
Finally, we need to invest more in our educational system, starting with preschool, all the way through graduate-level education.
It’s logical that more education translates to greater financial rewards. In fact, a report issued by the Pew Research Center in May showed that the typical college graduate earns an estimated $650,000 more than the typical high school graduate over the course of a 40-year work life.
Chevron Corp. recently donated $2 million to schools in the El Segundo area to increase funding for science, technology, engineering, mathematics and related education programs.
MBA students at Pepperdine University’s Graziadio School of Business and Management work with large and small businesses as well as nongovernmental organizations and nonprofits through our Education to Business program.
Why couldn’t more businesses and academic institutions engage in activities that expand higher-wage skill sets?
While we need to create jobs across the board, the addition of high-wage jobs would help grow wealth through all socio-economic levels in Orange County, where the median price of a home is $433,000 and the annual income needed to afford that home is about $84,700.
Having policymakers attuned to the need for high-wage jobs is one key component to ensuring that Orange County—and California—finally and successfully recover from the recession.
Mangiofico and Smith are associate deans at Pepperdine University’s Graziadio School of Business and Management.
