Social workers and business consultants were the biggest job winners in the past two decades in Orange County.
Specialty trades, such as plumbers and electricians, were surprisingly popular job growers. And boy, financial-sector salaries far surpassed those of any other.
While computer makers were among the biggest job losers, other parts of the manufacturing sector appear to have stabilized since its bottom point of 2010.
One troubling piece of data is job growth in the hospitality and leisure sector, which is also the lowest-paying. And as you probably already guessed, farming is dying on the vine.
Those insights come from a Business Journal analysis of jobs shifts in a period of tremendous economic upheaval, such as 9-11, the Internet and real estate bubbles and busts, and the Great Recession. Economists at Chapman University, California State University-Fullerton and the University of California at Irvine helped us out.
When all is said and done, how has Orange County’s labor force changed?
“The broad shifts in employment in Orange County mirror national trends, but the growth in certain sectors, like education and health services, has been turbocharged,” said Matthew Freedman, a UCI associate professor of economics and executive director of the California Census Research Data Center.
Up, Down, Steady Up
The county’s nonfarm employment rose 30% during the period from 1.24 million in 1997 to 1.62 million last year.
While an impressive increase, it hides the pain of the 2008 financial crisis. Jobs climbed 18% in the first decade but just 0.8% since 2007. In 2006, the county employed 1.53 million. That fell to the period low of 1.37 million in 2010.
“We know that the recession cost a huge number of jobs,” and that it took until 2015 to recuperate to previous levels, said Anil Puri, a longtime CSUF economist and director of the school’s Woods Center for Economic Analysis and Forecasting.
Overall annual jobs growth has slowed from 3% in the 1980s and 1990s to about 2% today, Puri said.
“Right now, we’re in a boom period where jobs are growing. Sooner or later, it will slow down.”
The county’s annual jobs growth rate should be about 2.4% this year, then decline over the next two years as the effect of the new tax law wears off, said Raymond Sfeir, director of Chapman’s A. Gary Anderson Center for Economic Research.
In 25 years, he said the rate may fall as low as 0.2%, mirroring slow population growth.
Jobs Oddities
The jobs data was based on information collected by the state Employment Development Department, which works in conjunction with the U.S. labor department.
While generally reliable, it has some quirks. Utilities, which provide 3,000 jobs in the county, are classified as services rather than manufacturing.
It doesn’t categorize jobs in the booming OC industries of gaming, mortgages or cybersecurity. It doesn’t list software as a category; for example, a software engineer writing code might be considered services, while chip design might be categorized as manufacturing. The jobs data includes a computer systems design and related services category, which was up 68% to 21,300 jobs over the 20 years.
The EDD divides its data among 11 major industry sectors. For our analysis, we concentrated on OC’s eight biggest, which make up 95% of the jobs, then highlighted selected job categories. We eliminated mining and logging, which decreased 13% to 700 jobs, and farming, which dropped 68% to 2,200.
Generally speaking, Orange County remains a diverse workforce, where no industry sector tops 20% of market share.
Analysis of Sectors
The biggest sector in absolute jobs, with 18.7% at the end of the period, is now professional and business services, with 302,000 jobs last year, up 52% over 199,000 in 1997, above the national trend’s 43%.
The management, scientific and technical consulting category made the biggest jump in the sector, climbing 261% to 24,900 jobs.
The 1997 sector leader of trade, transportation and utilities fell to second place with 263,000, or 16.3%; its biggest increase came in general merchandise stores, up 47% to 28,100 jobs, and grocery stores, up 38% to 27,400.
The biggest sector percentage gain was in educational and health services, whose jobs doubled to 216,000 and whose share of OC jobs climbed from 8.7% to 13.3%. The percentage gain outpaced the 64% U.S. in the same period, Freedman said.
The sector’s biggest expansion was a quadrupling of social assistance jobs, which climbed from 10,200 in 1997 to 44,900 jobs last year. The category includes workers at job-training and child and elder care facilities.
“It’s not surprising,” Freedman said. “It reflects the changing demographics of Orange County. There are a lot of retirees and families that need help.”
Construction Rebounds
Despite the precipitous recession-fueled construction decline, the industry is still well above where it started in the period. In 1997, it employed 59,700, jumping to 107,200 in 2006 during the building boom before plummeting to 69,000 in 2010. It’s climbed back to 101,700, 70% higher than 20 years ago. Nationally, the industry is up 20% in the same period.
The OC surge was particularly notable in specialty-trade contractors—carpenters, plumbers and painters—which soared 81% to 69,600 jobs. Economists don’t project continued sector growth.
“We’re not going to have major housing or shopping centers developed, simply because there is no land,” Puri said. “Over time, we should expect construction employment to decline somewhat.”
The sector that fell the furthest is manufacturing, which shrank 24% to 159,000 jobs, in line with a 29% national drop. Its share of OC jobs dropped from 16.8% to 9.8%.
The biggest source of OC’s manufacturing decline was a 30% drop in nondurable goods manufacturing to 43,200 jobs, and a 34% decline in computer and electronic product manufacturing to 33,000 jobs.
However, the industry seems to have stabilized since 2010, when it employed a low 150,500, creeping up to 158,600 at the period’s end. Many jobs that have survived automation and offshoring are in higher paying specialties, such as at Edwards Lifesciences Corp., the Irvine-based manufacturer of artificial heart valves and other health-related products.
“We’re not going back to prior levels of manufacturing anytime soon,” Puri said. “There is a restructuring in manufacturing in Orange County and California where we are concentrating on industries that have higher value added and are able to pay higher salaries.”
Government Gains
For those worried about a growing reliance on government, the sector climbed 21% to 160,500 jobs. Still, it lost market share, falling from 10.7% to 9.9%.
“The good news is employment went up 30%, and government went up only 21%,” said Robert Larking, an analyst for marketing firm InsideProspects Inc., which supplies job analysis to Orange County companies.
A big factor in the government sector increase was a 23% bump in local education jobs to 76,200.
Federal government jobs actually dropped 16% to 11,300, as state jobs excluding education jumped 33% to 10,600, and local government positions climbed 15% to 83,200.
Tourism Problem
The survey also showed why the tourism industry may ultimately be less attractive than it may appear in the mainstream press.
For example, the leisure and hospitality industry boomed 70% over the two decades to 218,200 jobs. Yet the average salary was $28,704, dragged down by jobs in amusement arcades at $13,300, mobile food services at $19,550, and fitness centers at $20,100.
One of the biggest reasons for the hospitality increase was a 72% surge in restaurant workers to 136,300. About one in every 13 workers in Orange County works at a restaurant, the biggest category of any profession.
“It’s really amazing,” Freedman said. “With beaches and all the other attractions, it’s growing pretty fast.”
They Make What?
By contrast, jobs in the financial activities sector grew 29% to 119,000 with an average salary of $113,724.
Leading the sector’s pay scale were investment portfolio managers, who average $655,650. Newport Beach-based Pacific Investment Management Co. alone has more than 200 portfolio managers, some of whom earn tens of millions of dollars a year. Other high-paying jobs in the sector include investment banking and securities dealings at $247,950, and securities brokerage at $214,559.
The trend toward more tourism jobs shouldn’t be encouraged because of their average low pay, the economist said.
“There’s a danger that we might turn into a destination,” Sfeir said. “I think Orange County political and business leaders have to come up with policies not only as a desirable place to visit but also as a strong base for a modern economy.”
The Future
Higher-education planners are trying to predict future job growth in order to design relevant courses and degrees.
They’re emphasizing areas like healthcare because of the aging population, and critical thinking so that students can understand facts and news stories because “fake news happens everywhere,” said Puri, who was interim CSUF provost for almost two years, one of the biggest universities in the state, with about 40,000 students.
“What we see right now is an emphasis on data-oriented occupations and jobs,” he said. “Every industry today is being influenced by the cheap availability of data and algorithms.”
