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Jobs on LA’s Grand Boulevard

An Economic Analysis of the Wilshire Boulevard Corridor

June 1, 2006 / By Daniel Flaming and Patrick Burns
Underwriter: the Community Redevelopment Agency-City of Los Angeles

Information about employment and wages in the Wilshire Study Area has been created to help the Community Redevelopment Agency of the City of Los Angeles identify development opportunities that will provide sustaining employment for local residents.

Three Streets, Three Economies

Jobs, wages and anchor industries vary widely from one major street to the next, and as a consequence the Study Area’s three major east-west streets each need to be studied separately. Overall, the study area is more conducive to service industry growth than the City of LA as a whole, but lacks competitive strength as a location for construction, manufacturing, utilities, transportation, wholesale, or retail businesses.

Economic Output and Business Survival

Twenty-two of the twenty-five industries that produce the most economic output and add the most value in the Wilshire Corridor, and 91 percent of business start-ups, are in the service sector. The annual number of start-ups is equivalent to one- fifth of all of the businesses in the study area, but only 30 percent are still in business five years later. The Study Area has an atypically high concentration of small businesses, but even so, 4 percent of establishments with 50 or more employees account for 44 percent of all jobs. Jobs_on_LA_Grand_img_01

Industries and Wages

Wilshire Boulevard has 67 percent of all jobs in the Study Area, many in high-skill, high-wage industries. Important challenges include:

  • Retaining and encouraging growth among high-wage employers
  • Retaining and expanding Professional services, especially Legal services, which are well established in the area
  • Attracting and encouraging linked industries with export potential
  • Building a stable and growing niche for nonprofit and labor organizations
  • Focus on transit centers to attract strong industries with good jobs.

Sixth Street jobs paid average monthly wages of only $1,657 in 2002. Important challenges include:

  • Retaining and expanding the 14 percent of industries that pay living wages
  • Developing industries with export potential and linked supplier industries
  • Providing sites for employers that migrate away from Wilshire Boulevard
  • Encouraging wage progress in low-wage industries and curtailing widespread informal employment

Only 2 percent of Eighth Street jobs pay living wages and job growth is slow. Important challenges include:

  • Building a more diverse industry base, with emphasis on providing alternative sites for firms leaving Wilshire Boulevard
  • Retaining and expanding nonprofit and labor organizations
  • Encouraging wage progress and curtailing widespread informal employment

Resident Labor Force

Half the residents of the Wilshire Study Area are foreign-born non-citizens. This is almost double the rate in the City of Los Angeles as a whole. Linguistically isolated households and adult residents without high school diplomas are found twice as frequent in the Study Area as in the City of LA. Unemployment and poverty rates for residents are notably higher than in the City overall.

Occupations Found in Study Area Businesses

Clerical and financial services occupations figure prominently in Study Area jobs. At least half a year of training is typically required to become proficient in clerical and other living-wage jobs found in the study area – assuming good basic educational skills.

Informal Labor Market

One-quarter of the workers in the Study Area and 42 percent of workers in the surrounding buffer area are estimated to be employed in informal jobs. Taken together this is twice the rate of informal employment found in the City of LA. Informally employed workers have an estimated annual payroll of $421 million. The public sector is being shortchanged by $107 million each year in legally mandated social safety net costs that are not being paid for these workers. In addition, we estimate that these workers should pay $19 million in sales taxes on their purchases, much of which may not be paid because many local retailers appear not to be reporting or paying sales taxes.

Recommended Next Steps

Based on the information presented in this report we recommend that the Community Redevelopment Agency of the City of Los Angeles proceed with the following steps to implement a targeted economic development strategy for the Wilshire Study Area:

  1. Operationalizing this strategy: Organize an in-depth briefing for CRA staff with operational and management responsibilities for the Wilshire Study Area
  2. Target Industries: Develop operational plans to retain, expand, and attract the 30 industry targets for economic development identified in this report
  3.  Retention and Relocation: Given that 62 percent of current jobs in the Wilshire Study Area are not in target industries, it is important to preserve, expand and strengthen this broad economic base
  4. Increase opportunities for living-wage employment
  5. Revitalizing historic buildings and identify which of the 30 target industries are attracted to offices in historic buildings in the Wilshire Study Area and develop incentive strategies for encouraging businesses in these industries to locate in historic buildings.
  6. Curtail rampant informal employment in the Wilshire Study Area
  7. Improve opportunities for the resident labor force in the Wilshire Study Area to gain access to living wage employment
  8. Use and maintain strategic economic data about industries and wages developed for this project.

Chapter Headings:Jobs_on_LA_Grand_img_02

  1. Executive Summary
    • Existing Study Area Development
    • Disparate Settings within the Study Area
    • Key Findings
  2. Value of Transactions and Business Survival
    • Output and value added by industry
    • Compensation to employees and owners
    • Revenue required to create a job
    • Survival of start-up businesses
    • Size distribution of employers
    • Key findings
  3. Industries and Employers
    • Wilshire Boulevard
    • Wilshire Boulevard highlights
    • Sixth Street
    • Sixth Street highlights
    • Eighth Street
    • Eighth Street highlights
  4. Retail activity
    • Historic buildings
    • Key findings
  5. Occupations Found in Key Industries
    •  Biggest occupations
    • Occupational wages
    • Training time
    • Key findings
  6. Resident Labor Force
    • Demographic profile of the resident labor force
    • Educational attainment
    • Changes in the occupations and industries that provide jobs for local residents
    • Income, poverty and unemployment
    • Key findings
  7. Informal Labor Force
    • Overview of LA’s informal economy
    • Estimated informal employment in the Wilshire Study Area
    • Jobs held by informal workers
    • Cost of informal employment
    • Key findings
  8. Zoning and Tract Analysis
    • Land use overview
    • Zoning and industry classification
    • Tract analysis
    • Key findings
  9. Growth Industries and Recommendations
    • Overview
    • Industries projected to grow
    •  Industries in which potential job losses may be averted
    • Strategy recommendations
    • Operational recommendations
    • Recommendations for ongoing use of data
    • Key findings and recommendations Next steps
Area of Work: Economy, People
Tags: Economic Analysis, Grand, Informal Economy, Jobs, Koreatown, Wilshire Corridor