The Orange County Register
10 Economic Trends to Be Thankful for in Often-maligned California
By Jonahan Lansner
It’s the season to be grateful for what we have.
Southern California’s economy may not be perfect, and it’s certainly an expensive place to live, but the region continues to provide opportunities for those willing to seek them out.
So, as we gobble down cranberry sauce, yams, string-bean casserole and drumsticks … here are 10 economic business trends one can be thankful for.
California is the nation’s fifth-happiest state, according to financial website WalletHub.
After juggling 31 demographics, civic and economic variables, WalletHub deemed Hawaii the happiest states followed by Utah, Minnesota, North Dakota … then California.
By the way, California ranked No. 14 in Gallup’s annual scoring of the quality of life among each U.S. state.
2. Less poverty
Yes, California poverty is too high but progress is being made.
The impoverished population statewide was cut by 1.49 million people in five years — a 17 percent decline topped by only three states.
Census data shows California with 7.46 million living in poverty last year, the national high, according to the supplemental poverty measure that takes regional costs of living into consideration.
California’s poverty-stricken residents in 2017 were reduced by 493,000 from 2016.
3. More jobs coming
Bosses will still hire, according to Cal State Fullerton economists. Southern California employers will add 130,933 jobs in ’19 and 108,420 in ’20.
Yes, that pace is off from an average 143,299 new jobs a year in 2016-18. But it’s steady job growth for the four counties: 1.63 percent in ’19 and 1.33 percent in ’20 vs. 1.91 percent this year and 1.77 percent last year.
4. Bigger paychecks
Pay is up. Not enough. But up. Be grateful!
Looking at weekly wages, workers in Los Angeles and Orange counties are averaging 3.3 percent more a year in 2017-18 vs. 1.7 percent more annually in the previous two years.
In the Inland Empire, weekly wages were up at a 3 percent annual pace in 2017-18 vs. a flat rate in 2015-16.
California shoppers are upbeat about the current economy.
According to consumer polling by the Conference Board, the Californian view of business conditions in October was up sharply: This subindex was 163.9 for the month vs. 137.2 in September and 151.9 in October 2017.
We will note that the state’s consumer outlook was less buoyant: The subindex tracking expectations hit 88.8 for October, up from 81.2 the previous month but down from 105.5 a year ago.
6. More eating out
Folks can complain about the unremarkable pay of restaurant workers, but the niche’s growth signals good times financially for local consumers.
Southern California restaurants added 229,000 workers since 2000-02 to 617,500, a 59 percent jump. Compare that with traditional merchants who averaged 757,000 workers employed in the three years ended in July. That’s up 74,717 or 11 percent vs. 2000-2002.
The rest of Southern California’s bosses added 647,000 jobs since the turn of the century, a 12 percent gain.
7. Ownership up
Owners have their largest slice of the statewide housing pie in seven years.
Census data shows 55.2 percent of California households lived in residences they owned in the third quarter of 2018 — that’s up from 54.3 percent in the previous quarter and 53.5 percent in 2017’s third quarter.
The last time California ownership was higher was 2011’s third quarter.
Of course, we’ll note that only New York (50.5 percent) and the District of Columbia (40.9 percent) had lower ownership rates.
8. Home values up
Homeowners are doing well even if it’s at the expense of wannabe owners.
The Real Estate Research Council of Southern California show the value of all total homes in the four-county region at $2.8 trillion. That’s after an increase of $237 billion in the year ended in June — a 9.2 percent gain.
Or in more digestible terms, regional housing values grew at a rate equal to $27 million an hour in the year.
9. More hotels
Tourism is important to Southern California and hotel operators are seemingly willing to bet more on the market.
In the four-county region, Atlas Hospitality reported 11 lodging facilities opened in 2018’s first half — and 472 more being built or planned. That’s down from 16 openings a year earlier but up from six in 2016’s first half.
Atlas Hospitality wrote: “Lenders and developers see a very positive long-term outlook for the Golden State.”
10. Fitter state finances
Credit agencies are saying nice things about state finances.
The three major rating agencies all give California their fourth-highest grade for creditworthiness.
And Moody’s Investors Service recently upped its outlook for state finances to “positive” from “stable,” a hint that an official rating upgrade could happen in the next two years.