Trade jobs climb in the South­land

In­dus­try faces pol­icy, la­bor chal­lenges af­ter em­ploy­ment rises 10% in 2005-15, re­port says.

Los Angeles Times - - BUSINESS BEAT - By Jack Flem­ming jack.flem­ming @la­times.com Twit­ter: @jflem94

South­ern Cal­i­for­nia has ex­pe­ri­enced a boost in trade and lo­gis­tics em­ploy­ment in the last decade, but pol­icy and la­bor chal­lenges lie ahead, ac­cord­ing to a new eco­nomic re­port.

Trade-re­lated jobs in­creased nearly 10% from 2005 to 2015, more than dou­ble the over­all re­gional em­ploy­ment in­crease of 4.2%, the re­port re­leased Mon­day by the Los An­ge­les County Eco­nomic De­vel­op­ment Corp. found.

Ware­hous­ing and lo­gis­tics jobs led the charge, jump­ing 55.1% over the decade, said the re­port, ti­tled “Trade & Lo­gis­tics in South­ern Cal­i­for­nia.”

The growth came at a cost, how­ever. Wages in ware­hous­ing dropped 9% dur­ing the pe­riod, com­pared with an in­crease of al­most 3% in the in­dus­try over­all, which in­cludes the highly paid dock­work­ers at the ports of Los An­ge­les and Long Beach, the na­tion’s largest cargo com­plex.

The av­er­age trade in­dus­try worker still made more than $63,000 in 2015, about 14% higher than the av­er­age wage for other in­dus­tries in the area.

Shan­non Sedg­wick, an econ­o­mist with the L.A. County Eco­nomic De­vel­op­ment Corp., at­trib­uted some of the em­ploy­ment growth to the de­cen­tral­iza­tion of ware­hous­ing and dis­tri­bu­tion. Con­sumers are de­mand­ing faster ship­ping, which forces com­pa­nies to move ware­houses closer to pop­u­la­tion cen­ters to save time and money.

“Dis­tri­bu­tion is be­com­ing more lo­cal­ized, and more lo­cal­ized growth means more new fa­cil­i­ties,” Sedg­wick said. “That means job growth.”

The job growth has also co­in­cided with ma­jor tech­no­log­i­cal ad­vance­ments in the in­dus­try that in­crease pro­duc­tiv­ity.

Au­to­ma­tion and ro­bot­ics technology en­ables com­pa­nies to “max­i­mize their foot­print” by stack­ing prod­ucts in ware­houses, Sedg­wick said. These fa­cil­i­ties of­ten reach above 40 feet and use au­to­mated ver­ti­cal track­ing sys­tems to place pal­lets higher than pre­vi­ously pos­si­ble with older sys­tems.

For now, these ma­chines don’t hin­der jobs be­cause la­bor­ers are still needed to pick many items and move them onto trucks.

“When they cre­ate a robot that ac­cu­rately and ef­fi­ciently picks the or­der … that will be a drag on job growth,” Sedg­wick said.

Trade and lo­gis­tics is vi­tal to South­ern Cal­i­for­nia, ac­count­ing for around 13% of the re­gional do­mes­tic prod­uct, ac­cord­ing to the re­port. In 2015, 598.3 mil­lion tons of freight val­ued at $1.7 tril­lion moved through the re­gion.

In­clud­ing the half a mil­lion peo­ple di­rectly em­ployed in the in­dus­try, trade sup­ports 1.2 mil­lion jobs in the re­gion.

Sedg­wick pre­dicts the in­dus­try will fo­cus on in­creas­ing ef­fi­ciency through in­no­va­tions in technology to over­come the loom­ing chal­lenges on the hori­zon, which in­clude trade pol­icy, en­vi­ron­men­tal reg­u­la­tion and re­cur­ring la­bor dis­putes.

Pres­i­dent Trump’s re­peated threats to im­pose puni­tive tar­iffs on Chi­nese im­ports are a cause for con­cern for the in­dus­try.

Last year, a Chi­nese in­vest­ment com­pany bought Irvine elec­tron­ics dis­trib­u­tor firm In­gram Mi­cro for $6 bil­lion, mark­ing the largest ac­qui­si­tion of an Amer­i­can tech com­pany by a Chi­nese firm. Chi­nese money is also pour­ing into Te­mec­ula, South­ern Cal­i­for­nia’s wine re­gion, where in­vestors are fund­ing at least five ma­jor projects.

“Any ma­jor shift from the Trump ad­min­is­tra­tion — mis­guided as it may be — could have a sub­stan­tial im­pact on our ports,” said Jock O’Connell, in­ter­na­tional trade ad­vi­sor for Bea­con Eco­nom­ics.

In­ter­na­tional freight flow­ing through the re­gion ac­counts for 22% of vol­ume but 36% of to­tal value be­cause for­eign trade flows have an av­er­age value of $4,800 per ton ver­sus $2,300 for do­mes­tic flows.

O’Connell also said the in­dus­try is con­cerned about in­creas­ingly strict en­vi­ron­men­tal reg­u­la­tions from the Cal­i­for­nia Air Re­sources Board.

He es­ti­mates that the cost of com­ply­ing with new reg­u­la­tions and im­ple­ment­ing new equip­ment will to­tal $35 bil­lion over the next two or three decades, as op­posed to the $7 bil­lion it would cost to keep the cur­rent equip­ment func­tion­ing.

“The im­ple­men­ta­tion of air qual­ity stan­dards is ex­pen­sive,” O’Connell said. “The real ques­tion is whether ports … will col­lec­tively be able to af­ford the tens of bil­lions of dol­lars it will cost to com­ply.”

Pa­trick Fal­lon TNS

WARE­HOUS­ING AND LO­GIS­TICS jobs led the growth in trade em­ploy­ment, soar­ing 55.1% from 2005 to ’15, the re­port says. Above, Ama­zon worker Ryan White ful­fills cus­tomer or­ders at a ware­house in Los An­ge­les.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.