It’s not often I get to feel glad that I’m not a (reported) billionaire, but I’m glad I am not 49-year-old private equity investor and newly fledged Deputy Mayor Austin Beutner.
Beutner was last week appointed the mayor’s new deputy and chief executive for economic and business policy. The media title is “Job Czar.” He will also have, quoting the Times, “a new line of direct authority over the Department of Water and Power, the Port of Los Angeles and the economic and business policies at Los Angeles World Airports.”
Columnists at the Times and the Daily News acclaimed the appointment of Mr B, of whom almost no one had ever heard. Local unemployment stands at over 12 percent. It’s much higher in the neighborhoods where the major current career opportunities are with the Crips and Salvator Maratrucha. Clearly, jobs are a huge priority. Said the mayor, “Austin has a real vision for economic development and job creation.”
First and foremost, Beutner said he’d try to make LA (the Times said) “a friendlier place for the sort of businesses that create well-paying jobs.” Excuse me, but this is where I came in. For 30 years and four mayoral administrations, mayors and deputy mayors have promised exactly the same thing. As a result, tax structures have been gently shuffled, regulatory bureaucracies have received many a mild tweak and national campaigns have been launched to sell the world on LA’s commerce-friendly attractions.
No one has claimed these measures turned LA into a business paradise. But during this period, two utterly contradictory business developments did take place…
…First, Los Angeles became the biggest manufacturing city in the US. Second, whole categories of exactly the kind of well-paid job everyone wants in LA took wing and fluttered away. Like aircraft design and production, automobile manufacturing, high-end retail (think department stores) and electronic equipment design and manufacture; even the financial sector shriveled as our major banks were sold out of state and our local stock exchange closed down. As a production center, Business LA seemed to be on bad steroids; it developed big muscles and shed its brains.
The big problem, of course, was that the fastest-growing category of manufacturing jobs was bottom tier, non-union and minimum-wage-plus. These jobs are also the ones most likely to leave the country at a moment’s notice. And now, in 2010, there aren’t even enough of them. But as the economy recovers, these are the jobs that will come back first. If I were Beutner, I’d be looking at this sector as the first line of the city’s employment recovery. But the unions that support the mayor would not, quite understandably, go for this strategy at all.
As for “well-paying jobs,” that gets tough. In order to attract high-end manufacturing and research and development to LA, you need huge changes that do not fall under Beutner’s authority. Like, better public transportation and schools as well as more and cheaper housing. (Like Chicago has, which is why the Midwest giant is LA’s constant competitor for first place among the nation’s manufacturing cities. On the other hand, it doesn’t have 58-degree winters and a beach that never freezes.)
So far, the city’s own best bet for such jobs is its Green Tech development zone near the LA River. Unfortunately, the departure (forced or otherwise) of the tech zone’s City Hall sparkplug, Community Redevelopment Agency head Cecilia Estolano, isn’t going to help that project to create new jobs real soon.
Neither will Beutner’s “new line of direct authority” to the city’s three proprietary departments. DWP is at least adequately staffed. With shrinking ship and air traffic, the Harbor and LAWA should be laying off, not hiring. There was something in the Times about Beutner trying to use “the city’s purchasing power to entice more vendors” to LA. But with a half-billion dollar deficit, LA has no business promising preferential – which could mean over-lowest-bidder– payments to any firm that moved to LA. Nor, for that matter, should it be buying anything in the quantities that would make it economical for, say, Oshkosh Trucks to open a plant in San Pedro.
But then I’m not the kind of guy who has ever had ideas sufficient to put me on Billionaire Row. Maybe Austin Beutner’s got some equally bright ideas on how to roll the city’s unemployment rate down below the national rate of just over 10 percent. He just hasn’t yet shared them with the rest of us.