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Private-Sector Employment Thriving in San Diego

May 20, 2015

It wasn’t too many years ago that San Diego County was saddled with a 10 percent-plus unemployment rate and we were losing far more jobs than we were gaining. Needless to say, we have experienced a sea change since then and today can brag about 5 percent unemployment.

And as I have often repeated, the unemployment rate is a civilian one and does not include the 115,000 people in uniform. It also does not include those folks who come across the border every day to work. Including those two categories, the county’s unemployment rate is about 4 percent. Not too shabby.

The really nice part of the story is that since the bottoming out in 2010, our county has added more than 110,000 jobs, including more than 30,000 last year. Even better, virtually all of the private sector has experienced an upward movement.

The really big gains since 2010 have been in professional and business services, educational and health services, and leisure and hospitality. Each of those categories has gained more than 20,000 jobs.

Of major importance is that half of the job gains in professional and business services were in professional, scientific and technical services. Those are the high-paying jobs that every metropolitan area craves.

I should note that San Diego County ranked as the third-largest county in the nation in venture capital investments. And next year, we will probably be No. 2 (trailing only Santa Clara County—Silicon Valley).

And I suspect our telecom business will continue to rage, given that 64 percent of the nation’s millennials have only cellphones. On the West Coast, 47 percent of the entire population does not have a land line. Whatever happened to phone booths?

Within the educational and health services category, the big winner has been health care and social assistance, thanks to Obamacare. Our health hasn’t deteriorated; it just that more people are seeking medical care and can now afford it. And, of course, our population is aging and there is a direct correlation between aging and health services employment.

Leisure and hospitality may not rank among the highest pay categories, but its employment gains certainly indicate that more folks are coming to San Diego for vacation.

The county’s 60,000 hotel rooms are approaching 75 percent occupancy — far more than the national average — and more than 500,000 folks visited the Convention Center last year.

The only three flaws in our tourism business are:

  • the inexcusable absence of a third phase of the Convention Center;
  • a desperate need for more hotel rooms;
  • a near dormant cruise business (down two-thirds from its peak, but that’s another story).

Manufacturing is now pushing the 100,000 job mark, down only 6,000 jobs from the pit of the recession. Virtually all sectors of manufacturing are doing well, with exceptionally good things happening in drone production. We are the drone capital of the United States, maybe the world.

Even construction has picked up a little. In 2006, the county peaked at 90,000 jobs, then cascaded to 55,000 in 2010 and is gradually moving upward and is now at 64,000. The big void is the near-absence of for-sale housing. The production of single family homes and condominiums is nearly moribund, with few indications of improvement in the wind.

The biggest share of construction today is rental units, most of them at the top end of the market. The really good news is that there are thousands of millennials waiting to buy homes at reasonable prices if they are produced, especially in urban areas.

In the public sector, employment has remained relatively level all through the recession and the recovery. Since 2010, government has gained only 2,400 jobs, now standing at 232,000. That doesn’t include education jobs, which are just holding their own.

Overall, the San Diego County populace should be happy campers. The population is growing, retail sales and car sales are doing just fine and government revenues are increasing, allowing road and bridge improvements, more money for libraries and other public structures, and even a minor reduction in pension fund indebtedness.

2015 is doing just fine, but just imagine how well it would be doing if we could adequately supply the new-home market with affordable product.

This article was originally published by Xpera Group which is now part of The Vertex Companies, LLC.

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