Category Archives: Economy

LA Budgeting

Economy,

An approval was given by the Los Angeles City Council of a $9.2 billion budget.  The money will be put toward the following important issues: public safety, transportation and homelessness.

The money will be put in use at the beginning of the next fiscal year (July 1, 2017).  It is hoped that it will assist in a reduction in the number of automobile fatalities, hiring additional firefighters and establishing a $1 million legal fund for undocumented immigrants facing deportation.   As well as giving money toward two more fire engine companies and adding 75 to the firefighter numbers, Garetti has in the past indicated a desire to increase the amount of female firefighters in the state, part of this budget plan will go toward a girls recruitment camp.  At the 2-day program, teenage girls between the ages of 14 and 18 are paired with active duty LAFD female firefighters and cadets to engage in practical activities using firefighting equipment and tools etc.

Since LA has had a notoriously challenging homeless situation, a $176 million budget has been put toward shelters, sanitation programs, and more. $9 million to transportation and police departments and $17 million for Vision Zero projects.

 

Optimism on LA’s Economy?

Economy, , , ,

It seems that there is no reason for the people of LA to not be optimistic about the economy.  According to a recent video put out by Investment Counsel Michael J. D., McCall, the economy has been surprising to investors.  Economic data has been far better than anticipated.

Further, based on data from the Citigroup U.S. economic surprise index, (which measures how often economic news is better than expected) soared until early 2017.  The sudden plunge panicked economists; journalists picked up on this and WSJ and FT articles indicated investors were dealing with “a new economic landslide.”

McCall in this video explains however, that the situation in LA is not all doom and gloom.  He explains how there are often fluctuations and these do not need to lead to panic.

In addition, whether one is optimistic about the economy or not, could depend on the color of their skin.  According to a survey put out by The Lowe Institute’s Los Angeles Consumer Sentiment Index, the Hispanics and blacks in LA County are not optimistic, but whites are. With a substantial decline in Q416 (followed by a smaller one in Q117), consumers are indicating a reduced expected consumption of products and services.  According to Marc Weidenmier, Institute Director, the Q117 decline was probably due to the Q416 one together with the Presidential election.  But what did not happen (that was partly anticipated) was a rebound in consumer sentiment.  Given that, there is currently more pessimism on the economy, which McCall says is not necessary.

Perhaps backing McCall’s sentiment is some of the job creation growth that the region has been encountering.  In an article in a local newspaper of the area, job creation was recorded as most impressive. Due to one of the 111 area projects worked on by economic development agencies in 2016, a staggering $1.1 billion new investment was made, with the creation of 1,253 new jobs and a retaining of 3,092 jobs.

There is room for caution for sure, but there is also cause for optimism.

LA: Optimistic Economic Report

Economy,

Good news was recently reported through LinkedIn LA data on hiring rates from March this year to that of last year. Faster hiring rates have been noted – 2.2 percent year-on-year. This data was cleaned from LA LinkedIn profiles which changed employer names over the last month.

LinkedIn Manager of Corporate Communications Joseph Roulades who engineered the report noted that the skills that are lacking most in the region to be system management and IT infrastructure. There are also more people with business development, database management, health care management, HR, nursing, sales, software and teaching that are needed to full job vacancies in the area.

Over the last year, a lot of people new to the employment market in LA came from New York. Next up was Chicago and Boston. Those that left went to the Bay Area, Las Vegas and Seattle.

LA: Great Startup Location

Economy, ,

According to recent findings from the Economic Innovation Group (EIG), Los Angeles (along with Dallas, Houston, New York and Miami) are where 50% of all new business start-ups exist nationwide.

However, given this finding, it is greatly surprising that so few Americans are willing to relocate.  If these cities have such great potential, why are more people not heading toward them in search of a good job?

Another strange phenomenon is that the leading region – Orange County which is actually at the top of the list – has such a high standard of living.

Indeed, the numbers speak for themselves.  According to the EIG from 2010 to 2014, the largest number of any metropolitan region in America was Los Angeles-Long Beach-Anaheim which generated a yearly average of 21,870 business startups.

According to one founding EIG member (who is also a co-founder of Aspiration.com), Joe Sanberg: “Los Angeles has one of the strongest dynamism rates in the nation as more startups are forming than businesses are closing.”  And in other areas, this has not been the case at all with long-term “uneven recovery” causing a smaller amount of Americans to witness economic growth come back to their communities.

LA and the Enhanced Economic Immigration Factor

Economy,

According to a recent study undertaken by the City of Los Angeles, the Los Angeles Area Chamber of Commerce, and the nonprofit New American Economy over a third of the America’s GDP is generated by immigrants.  At the same time The New Americans in Los Angeles study found that they account for over 50% of the self-employed workers in LA. Other figures from the study found that in 2014, LA County foreign-born residents generated almost $233 billion in economic activity which comprised 35 percent of LA’s $653 billion GDP.

Other benefits LA County is reaping from the foreign immigrants was the recorded amount they paid for federal, local and state taxes in 2014 which accounted for over $25 billion.  In addition, their spending power weighed in at $70 billion and their businesses generated $7.2 billion. Furthermore, immigrants in LA make up 53 percent of the self-employed workers.

Meanwhile, a recent report put out by the LA County Economic Development Corporation found that the Asian community in Southern California is enjoying “significant economic power.”  With over 1.4 million Asians living in the region (a mere 14.5 percent of the population), this demographic’s economic power is disproportionately higher than its size.  The findings showed that the median household income for the 489,175 Asians in LA was $70,440, substantially higher than LA’s overall median of $59,135. In addition, it was discovered that their annual expenses on basics like food, clothing and housing was lower than that of the average population.

LA: Helping People Thrive in the City

Economy,

A $10 million initiative – the LA Justice Fund – has been created by local officials in an attempt to significantly reduce illegal immigration.  Around half of the funds are being received from city and county governments; half from private foundations.

The move is indicative of the state of California’s Democratic politician’s commitment to offer protection for those immigrants without documents who would otherwise face deportation.  With the creation of this fund, it is hoped the issue will be more treatable.

Indeed, as Eric Garcetti, the city’s Mayor said that the fund was LA’s way of showing readiness to “support people who can’t afford or don’t realize they might need a lawyer.”

Another initiative being taken to help those in LA was the recent Fair Chance Hiring Fair the city hosted.  This was geared toward parolees who need to find work but face difficulties due to their historic criminal records.   As some people who have been helped in the past noted, basically options are extremely limited…often to warehouse positions and with this fair it was hoped that at least some of the barriers would be lowered.  The fair brought in employers who were hilling to hire someone who served time, such as Uber, a company that is prepared to consider parolees who did not serve time for violent crime.

Boost in LA Economy

Economy, , , ,

economyIndependent economic research firm Beacon Economics recently released a report at the LA Chamber of Commerce indicating that the region has encountered widespread, solid growth over the last year.  When looking at the year starting from September 2015, private sector business employment figures grew at a prosperous rate of 2 percent, resulting in the creation (in total) of almost 1.4 million jobs.

In addition, wages on average flourished, with the average annual wage increasing by 1.3 percent to $59,300.  There was an increase in sales tax receipts (2.4 percent) and city-collected gross business tax receipts (8.4 percent).  The 4.8 percent of plummeting unemployment rate that has been encountered is now lower than America’s average of 5.0 percent.  the largest areas of employment growth were construction and miscellaneous services.  The only industry to encounter a shrinkage was private education. In terms of construction, this number was facilitated by the fact that there was a substantial increase in the amount of residential units in mixed-use development projects to get permits over the last 12 months.

In terms of small businesses, Small Business Saturday is coming up on thanksgiving weekend at Flintridge Bookstore & Coffeehouse (La Cañada Flintridge, at the intersection of Foothill Blvd. and the Angeles Crest Hwy.).  The nationwide event – which began in 2010 – was established by American Express to support indie businesses and recognize their contributions to their communities.

The Bureau of Labor Statistics found that between 1993 and 2015 it was small businesses which were responsible for the establishment of most new jobs in America, and this was the case even during the economic downturn.

Downtown LA Expansions

Economy, Infrastructure, , ,

los-angelesThe Honda of Downtown Los Angeles dealership on the Figueroa Corridor is expanding.  With this it will be moving from its long-held location at 1540 S. Figueroa St., by the 10 Freeway overpass, to the intersection of Martin Luther King Jr. Boulevard and Hoover Street near Exposition Park, where the new dealership will be built. The Department of City Planning has documents attesting to Honda’s plans to demolish an existing two-story building and raise a pair of five-story structures, one on each side of Hoover Street, to house showrooms, service facilities and vehicle storage areas. The new dealership, slated for completion in 2021, would effectively be the new headquarters of Honda of Downtown, though the property on Figueroa Street would still operate as a dealership for used cars and performance vehicles, according to a report from the real-estate website Urbanize.la.

There’s not such good news for anther transport-related expansion in Los Angeles. BNSF Railway Co.’s new terminal near the Port of Los Angeles – that has been in the works now for close to 10 years with a $50m price tag – is facing challenges from a local judge who ruled that the terminal’s environmental review was not adequately undertaken. This could actually bring the project – that would offer city residents much-needed rail capacity – to an end. Right now BNSF is considering its options: to appeal, negotiate, or abandon efforts entirely.

Meanwhile, it seems LA is a great place for a start-up to expand.  According to Daniel Wirjoprawiro, it is “the fastest growing tech market in the United States.” In an article in StartUpSmart (based in Australia) he gives 6 reasons to explain this, having himself already made the “move to the City of Angels.”  These are:

  1. Burgeoning ecosystem
  2. Establishment of Chinese companies in the region
  3. More affordable than other tech regions such as San Francisco
  4. The level of talent: “LA has more engineering graduates than any other metro city.”
  5. Diversity resulting in the capacity of the ecosystem to build “a new generation of companies that are distinctly different in culture, creativity and aspirations from companies that stem from less diverse cities.”
  6. Quality of life.

Perhaps the judge who gave the negative ruling on BNSF Railway Co. should read Wirjoprawiro’s article and reconsider his position.

Venture Capital Funds

Economy, , , , ,

According to the SEC filing, $10.5 million has been raised for Culver City’s Troy Carter’s Cross Culture Ventures fund. Various investments have been made such as the acquisition of early stakes in Gimlet Media (the podcast producer company), Mayvenn Inc. (the online hair extension merchant) LandStreet (a financial and technological services company) and Thrive Market (the online health food store).

It was last year that Cross Culture Ventures began this fundraising.  It is currently looking for investors.  Its focus is making early stage investments in consumer goods and services companies.  According to Marlon Nichols, a Partner at the firm, Cross Culture Ventures is “studying consumer behaviors and consumer purchasing habits in over 180 countries, and we are looking for trends.  From that we pull out themes and we start to invest in those themes.”

One example of companies the firm is helping is LandStreet. Jerry Nemorin, company CEO just pointed out that its additional funding would enable it to “help more consumers restructure their debt and reclaim their financial health…[Further, it can] begin scaling out loan portfolio and expand our customer pipeline.”

Optimism Around LA Economy

Economy, ,

economyHow do people in Los Angeles feel the economy is faring? Many economists in the area believe growth is imminent, despite the increasing cost of living and housing affordability. The Forecast LA study conducted by Beacon Economics LLC in conjunction with Loyola Marymount University indicated that LA in 2017 will encounter continued growth throughout the region, California and indeed the entire nation. Plus, in the early part of next year, unemployment will decrease up to 5 percent throughout America.

For the rest of this year it is predicted that the economy in California will encounter a faster growth rate than the rest of the nation. This year, it was predicted that Californians would experience an upswing of 3.6 percent in their personal income, but this is less than the 4.5 percent average they enjoyed last year.  UCLA economist Jerry Nickelsburg said:

“The fact that we are getting close to full employment means we should be growing at a slower rate, unless there is a faster growth in innovation and capital accumulation.”

The Mayor of LA gave a speech recently in which he took credit for the city’s improving economy. At the same time, he feels that civic health matters have been addressed too.