Give the members of this week’s OC 50, our annual guide to top leaders of the local business community, a chunk of credit for this: Orange County outpaces San Diego when it comes to its economy and overall wealth.
“Our economy is smaller than Orange County,” said Kelly Cunningham, an economist with National University Systems Institute for Policy Research in San Diego. “A lot has to do with the mix of jobs that we have here, and the mix of industries.”
Orange County’s gross domestic product was $194 billion last year, compared with $177.5 for San Diego County, according to data compiled and analyzed by Cunningham’s organization.
Similar Populations
OC and San Diego County have similar populations, each with a little more than 3 million residents.
San Diego is better known as a stand-alone market—a benefit it derives in large part of its location farther from Los Angeles, whose size and reputation tends to relegate Orange County to suburban status in the minds of many in Southern California and throughout the nation.
San Diego’s business landscape also stands out in a few industries: Defense, thanks to its longtime role as U.S. Navy port and Marine Corps training center; wireless communication, owing largely to the presence of chipmaker Qualcomm Inc.; and biomedical, an industry that’s grown there in recent decades, aided in large part by the development of the University of California, San Diego.
Yet San Diego’s median household income as of 2009, the most recent data available, was nearly $65,000—or 17% below Orange County, where the midpoint came to $76,000.
Another measure of overall wealth—the percentage of households with incomes above $200,000 —shows San Diego with 6% in that group, while Orange County had about 9%, according to federal data.
San Diego also trailed OC on the average wage as of 2010. Workers in San Diego average $52,348 in annual pay, compared with $54,193 here.
The manufacturing and financial services segments stand out in a comparison of the two counties, according to Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange.
Both of those sectors generally pay above-average wages, typically exceeding service-industry positions. Both also cover broad ranges of commercial activity.
OC’s base of manufacturers runs the gamut from makers of computer chips and medical devices to T-shirts and acoustical equipment. The financial services sector includes a growing base of banks along with other lenders, insurers and various service firms (see OC 50 Special Report, starting on page 21).
The most recent data from the state’s Employment Development Department showed Orange County’s manufacturing sector with 155,100 jobs. San Diego had less than two-thirds that total, with 91,400.
Financial activities, including jobs in such businesses as banks, mortgage and insurance companies, totaled more than 103,000 in Orange County. San Diego had 66,500.
Marney Cox, an economist with the San Diego Association of Governments, also said the differences between San Diego and Orange County’s economies rests mainly with the type of industries.
“There’s a huge difference between Orange County and San Diego,” Cox said. “We have a lot more low value-added jobs here. We’re stable, but these are the types of jobs that are not going to bring the same kinds of salaries that those in Orange County will.”
Tourism
Cox said that while Orange County has a significant hospitality and tourism anchored by the Disneyland Resort in Anaheim, it’s less reliant on the segment than San Diego.
A recent ranking of various job clusters Cox compiled for San Diego had entertainment and hospitality, which tends to have large numbers of lower-paying jobs, was at the top of the list. Next came information, communications and technology, which tend pay higher wages.
San Diego also has a higher percentage of its total employment on government payrolls, he noted.
National University’s Cunningham, who has analyzed economic data for more than two decades, said the oft-cited reason for San Diego’s relative lagging economic fortunes compared with Orange County is the so-called “sunshine tax.” The supposed phenomenon involves employers paying lower wages because so many people want to live in the area, causing higher competition for jobs.
He’s not buying that notion.
“You can’t use that as an excuse,” he said. “They also say that it doesn’t cost as much to live here, but when you look at the cost of living here, in some cases, it’s higher (than Orange County).”
—Allen is a reporter for the San Diego Business Journal, a sister publication of the Orange County Business Journal.
