NEW GEOGRAPHY-For much of the past century, Southern California has been driven by ever increasing population growth. That era has now ended as the region’s demographics stagnate, a trend that, according to the latest Census numbers, is, if anything, accelerating. This follows a distinct national trend, notes demographer Wendell Cox, where the largest metropolitan areas are losing domestic migrants and growing far more slowly than smaller, often less expensive regions.
But even among the nation’s largest metropolitan areas, the Los Angeles-Orange County region’s growth rate last year dropped precipitously — .19 percent — less than one third the average for the country’s 53 largest metro areas. By itself, Los Angeles’ rate was even lower, an insignificant .13 percent. Overall, LA-Orange County ranked lower than all but Chicago and Detroit among the top 20 major metropolitan areas.
One reason: growing net out-migration. The Los Angeles-Orange area — which already lost well over 350,000 migrants between 2010 and 2016 — ranked fourth from the bottom of the nation’s 53 largest metro area last year, ahead of only of New York, Chicago, and, surprisingly, San Jose. Despite a somewhat improved economy, the LA area’s rate of outmigration in 2016-2017 was 40 percent over the annual average since 2010, while the O.C. outmigration rate nearly tripled.
The one area that continues to grow remains the Inland Empire. The population rose 1.26 percent last year, more than ten times that of Los Angeles-Orange Counties; net in-migration rose by more than 80 percent. Although its rate of growth is far slower than a decade ago, the Inland region’s growth reflects a broader national trend that is seeing population shifting away from dense metropolitan areas with dense urban cores and towards generally more suburban regions.
What the numbers mean
It is commonplace among planners and regional boosters to suggest that to meet an expected surge of new residents we need to develop massive amounts of high-density housing. Yet the migration and growth numbers suggest quite the opposite. Actually, so far this decade more millennials moved to Irvine than to downtown LA, where the vacancy rate is well over 10 percent. As with other groups, it’s the Inland Empire which shows the most marked millennial growth.
This suggests that economic development efforts should be focused more on creating jobs in outlying areas. Instead, the state and local have escalated their focus on density, trying to force growth most where people do not want or cannot afford to live. Although these policies are often justified as being green, this forces more people to commute longer distances to work, often to jobs that don’t pay enough to live closer, resulting in more auto-driven pollution.
The economic equation
Local boosters often tout our very low official unemployment numbers, which track those across the country. Yet historically this can be as much a sign of stagnation and a disaffected workforce, or an aging population, as economic robustness. Certainly, compared to more dynamic regions across the Sunbelt as well as the Bay Area or even New York, Southern California has performed poorly in creating high-wage jobs over the past decade in key business sectors such as technology and professional business services.
Perhaps the biggest threat lies in the misalignment of population growth with higher-paying jobs. The Inland Empire, where people are moving, has underperformed not just the nation but the rest of the region, with both weak STEM growth and an actual decline in professional service jobs last year.
We still retain some very strong pockets of high-wage jobs, particularly in west LA and coastal Orange County, but these areas are also too expensive for groups such as millennials and even Generation X families. Overall though, the vast majority of job growth across the region has been in lower-wage areas like hospitality, retail and other routine services. Pay in many traditionally higher wage blue collar professions, like construction, have dropped. Combined with high real estate prices and the area’s mediocre wage growth, poverty and even homelessness have remained stubbornly pervasive among working families across the region.
Needed: A new policy focus
Needed now is a dramatic shift in regional policy focus. The almost exclusive mania for density and transit simply works against both local and national trends. We need to start focusing less on downtown LA and densifying already congested, overpriced coastal areas, and more on promoting stronger, high-wage growth across the region.
Much of this requires a greater emphasis on both middle-wage jobs and skills education. The impoverishment of our region outside the largely coastal “glamour zones” has accelerated as regulatory pressures drive both manufacturers and mid-wage white collar work out of the region. The lack of strong training programs for skills needed by industries such as manufacturing, medicine and information needs to be addressed.
More than anything, we need to recognize that our region requires addressing the sinking fortunes of our lower and middle-class residents rather than trying to reshape it in ways that appeal to planners, real estate speculators and those who benefit from densification efforts. The current cocktail of policies can only succeed in driving more people and industries out of the region entirely, and in the process exacerbate stark divisions between the world of the rich and famous and everyone else.
(Joel Kotkin is the R.C. Hobbs Presidential Fellow in Urban Futures at Chapman University in Orange and executive director of the Houston-based Center for Opportunity Urbanism, www.opportunityurbanism.org. He is an occasional contributor to CityWatch.) Edited for CityWatch by Linda Abrams.