Orange County's unemployment rate remained a low 3.3% in October, unchanged from September, according to figures released Monday by the federal Bureau of Labor Statistics.
The county unemployment rate in October was well below the comparable U.S. rate of 5.7%. Analysts said the county's economy remains healthy.
But a recent shift in the types of new jobs created in the county--with low-paying jobs now predominating--has some analysts worried.
"Our economy is getting more mature," said Essie Adibi, director of Chapman College's Center for Economic Research, which studies the local economy. "It's a lot more susceptible to what's happening in the national economy than it once was."
In the year ending in October, seven local manufacturing industries lost jobs: petroleum products, rubber and plastic products, leather goods, primary metals, fabricated metals, electrical and electronic machines and instruments. Altogether, those industries lost 3,200 jobs.
Factory employment grew just 2.6% during the period, to 249,000 jobs. The big gainers were food manufacturers, the printing and publishing industry, and computer and transportation equipment makers. Factory jobs generally pay better than jobs in service industries, which include workers in restaurants, hotels and service professions such as law offices and accounting firms.
In contrast with manufacturing, service industry employment increased 14.1% during the year through October, to 276,000 jobs.
Service and retailing jobs--also generally regarded as low paying--began to grow faster than manufacturing jobs in the county about 1985, according to figures compiled by the state Employment Development Department.
In the last two years, the shift in the types of jobs being created has caused correspondingly slower growth in personal income, a UC Irvine sociologist said.
After leaping by up to 10% a year in the early 1980s--far better than the national average--household income in the county slowed to a 2.4% growth rate this year, said Mark Baldassare, a professor of social ecology who studies the county's economy. This year's growth rate was less than the inflation rate, which ran about 4%.
The shift in jobs is having two major effects, Baldassare said:
- The local economy is far more dependent on service and retailing jobs, because those jobs are a far larger proportion of the employment base than they were just five years ago. That means the county will be more dependent on retail sales to keep all those fast-food cooks, shop clerks and hotel maids working.
- The gap between rich and poor in the county is growing, in income as well as geographically. Meanwhile the number of middle-class households is eroding.
South of the Costa Mesa Freeway, median household income is $48,000, compared with a $40,000 median for the rest of the county, according to Baldassare's annual survey of 1,000 county residents. The south county median was $5,000 higher than in 1986, the survey found, while the median for the entire county--$42,000--was up just $1,000.
"The county is becoming more segregated in terms of wealth," Baldassare said. "And you're getting more people at the low end of the scale and more at the high end, while the middle slowly disappears."
While Orange County's economy remains sprightly, analysts said it must now deal with some of these problems, which have already cropped up in the U.S. economy.
"Since we had so many high-technology companies, we were used to growing, even when the national economy was slowing down," Chapman's Adibi said. "Now, if the nation slows down, we slow down, too."