TRENDS IN THE LOS ANGELES LABOR MARKET
At the time of the April 1992 civil unrest, Los Angeles County was in its second year of rapidly declining employment and earnings. After reaching a peak early in 1990, the nonfarm job total began to slip, and this was followed by additional losses during 1991. Between April of 1991 and 1992, the county lost over 100,000 jobs. The net result was that total nonfarm wage and salary employment, in the second quarter of 1992, was on par with the level of the first quarter of 1987. This was one of the biggest absolute declines since records have been kept, beginning in 1950. Based on records of employer Unemployment Insurance (Ul) tax reports, total wages covered by the Ul program were nearly $743 million lower in the first quarter of 1992 than in the same quarter of 1990. On an annual basis, this wage loss would be roughly $3 billion for all of Los Angeles County (not adjusting for inflation).
Although the recent decline in jobs was severe and ranks high for the post-war period, it was also preceded by a decade of relatively slow job growth. The 1980-90 growth rate in nonfarm employment was 17.5 percent, or an average of less than two percent per year. This contrasts with an expansion of 26.1 percent in the 1970s and 30.8 percent growth during the 1960-7 period. The 1980s also brought a steady erosion of manufacturing jobs in Los Angeles County with a series of layoffs that began in 1979, after factory jobs had reached an all-time peak of 933,700. By 1983 the manufacturing sector had fallen to an employment level of 829,700, or roughly equal to the mid-1977 figure. A large share of that loss was recovered by 1987, but after that a new round of layoffs began, and by mid-1 992 the local factory sector had slipped back to the 1963 mark. The 1979-92 job loss in manufacturing was close to 160,000, for a 13-year decline of over 17 percent.
The shrinking of the manufacturing sector has been a serious blow to the Los Angeles area not only because of the importance of manufacturing as an underpinning to the local economy, but also because of the severe effect this has had on workers in areas of the county that are heavily dependent on manufacturing firms as a source of employment. These traditional "blue collar" communities include most of the areas affected by the civil unrest. According to the 1990 Census, workers in these areas already beset by high unemployment were more likely to be working in factories than were workers in more affluent areas of the county. Also, for workers with less education, manufacturing jobs have offered a relatively high wage compared to other sectors of the economy, although this differential has been narrowing--in part because of the disappearance of many large, unionized establishments over the past several years.
Reflecting the decline in job opportunities, the unemployment rate in Los Angeles County during the second quarter of 1992 averaged 8.9 percent, and, was at its highest level since mid-1984.As recently as 1989, the jobless rate had fallen below 5 percent, a level comparable to the rates reached in the late 1960s.Given the sharp rise in unemployment since the 1990 census data were collected, the labor force statistics discussed in the following section should be viewed taking into consideration the subsequent worsening of labor market conditions in the county.
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