1. UCLA Anderson School of Management Los Angeles: Long Run Challenges and Opportunities Christopher F. Thornberg Senior Economist

2. UCLA Anderson School of Management California Employment

3. UCLA Anderson School of Management Local Performance of MSA’s since 2000 Payroll Job Growth Q4 00 – Q4 03 -8.0% -4.0% 0.0% 4.0% 8.0% Inland Empire Fresno Bakersfield Sacramento San Diego Orange County Oakland National Avg Los Angeles San Francisco San Jose

4. UCLA Anderson School of Management Recent Employment Trends Payroll Jan 04Ch% % California14,880,00050,4000.3%-249,700-1.7% Fresno372,1004,9001.3%6,3001.7% Los Angeles4,009,30011,0000.3%-116,100-2.8% Oakland1,025,4002,9000.3%-43,700-4.1% Orange1,441,000-1,000-0.1%10,3000.7% Riverside1,120,1004,2000.4%82,4007.9% Sacramento763,8004,6000.6%35,1004.8% San Diego1,257,700-2,700-0.2%32,9002.7% San Fran956,1006,5000.7%-139,800-12.8% San Jose848,500-4,300-0.5%-210,000-19.8% Ventura305,1001,0000.3%6,5002.2% 3 Month3 Year

5. UCLA Anderson School of Management The LA economy Stronger than the payroll numbers Rents: Change 01Q1-03Q4

6. UCLA Anderson School of Management Los Angeles Jobs by Class

7. UCLA Anderson School of Management A closer look at Payroll Jobs in LA

8. UCLA Anderson School of Management LA manufacturing? Manufacturing Employment

9. UCLA Anderson School of Management LA is not unusual Los Angeles

10. UCLA Anderson School of Management A decline in US manufacturing? Employment: A victim of productivity gains and industry shifts to capital intensive sectors

11. UCLA Anderson School of Management And Entertainment? Stabilized

12. UCLA Anderson School of Management The big worries for the Southern California?  Infrastructure  Housing  Demographics / Education  Tax Reform

13. UCLA Anderson School of Management LA Housing: Red Hot Ratio: Change Population / New Units Why? Supply not keeping up with demand

14. UCLA Anderson School of Management Consequences: Crowded Conditions % Crowded Housing > 1 person per room It’s the bottom that gets squeezed

15. UCLA Anderson School of Management Population Forecast

16. UCLA Anderson School of Management Demographics

17. UCLA Anderson School of Management Demographics K-12 Spending

18. UCLA Anderson School of Management California Revenue Sources California vs US State and Local Tax Receipts, FY 1999-2000 Source: US Census US Per Capital Taxes $4,439 Type of Tax Property 28.6% Sales and gross receipts 35.5% Individual income 24.3% Corporate income 4.1% Motor vehicle license 1.9% Other taxes 5.7% California $5,016 21.9% 33.1% 33.0% 5.5% 1.5% 5.1%

19. UCLA Anderson School of Management But don’t despair… No matter how bad things seem here… It doesn’t get much more ‘business- unfriendly’ than this!