San Diego is a services economy

Why your pocket is empty

The classic description of a city living off personal services, and bringing in too little outside money through activities such as manufacturing, is “a bunch of people doing each other’s laundry.” Increasingly, that describes San Diego.

Indeed, in the past ten years, the number of San Diegans working in laundry services has risen 8.4 percent to 14,200, according to data from the California Employment Development Department.

That’s not good because according to a 2008 report by the Bureau of Labor Statistics, the average annual pay of San Diego laundry and dry cleaning workers is a puny $20,100 a year. That’s not even half the pay of the average local worker: $47,250. And according to a 2008 report by the San Diego Workforce Partnership, a single person in San Diego has to earn $33,734 a year just to make ends meet, and 37.2 percent of local workers don’t make that much. And remember, that’s for a single person. A family of five (two adults, three children) needs almost $111,000.

To find out how many San Diego jobs are dependent on other San Diegans, and not on money flowing in from elsewhere, I counted job gains or losses over the past ten years. I also looked at ten-year employment patterns at a number of local companies.

The decline of manufacturing and construction jobs is alarming, particularly since the population continued to grow, although not at rates the county experienced in the 1980s (sometimes 3 percent or more a year). In ten years alone, manufacturing employment has plunged 24.2 percent in the county. Now only 7.4 percent of county jobs are in manufacturing, down from 27 percent half a century ago. Why is that important? Local tool and die makers make $49,510 a year. Electronics engineers make $98,770 and mechanical engineers $81,370.

Construction jobs have dropped 6.6 percent in the past decade. Had the real estate bubble not popped, they would have risen significantly. The average construction job pays $47,780. Brick masons make $62,500 and glaziers $55,330.

While manufacturing and construction jobs have been falling, jobs in services have been rising sharply. The number of service jobs over the past ten years has soared 11 percent to more than one million. But look at the compensation in these fields. Retail jobs have gone up 4.2 percent. But retail salespersons make $25,770 a year. Cashiers make $22,390 a year.

Quintessential service jobs are in the restaurant business. In the past ten years, jobs in food services and drinking places have shot up 23 percent. With two people often working, families dine out more these days. But the business is not remunerative for those providing the service. Waiters and waitresses make $20,200 (almost the same as laundry workers), although those serving meals do get tips. Fast-food cooks make $18,600, short-order cooks $23,490, and dishwashers $18,890.

One service industry that does bring in money from the outside is tourism. The establishment wants taxpayers to pay for another expansion of the convention center, for example, and a whopping subsidy for a new Chargers stadium (although pro sports teams do not bring in significant amounts of money from the outside, contrary to the propaganda). Tourism jobs have gone up 14 percent in the past ten years. But pay is dismal. Maids and housekeepers make $20,490 a year. Hotel desk clerks make $22,040.

Jobs in amusement, gambling, and recreation have soared 33.6 percent in the past decade. But recreation attendants make $20,710 a year. Ushers and ticket takers gross $20,270.

Information jobs have risen by 4.2 percent, but one subset has plunged: newspaper, periodical, and book jobs, down 36.6 percent, to no one’s surprise. Reporters make $42,770 — those that are working, anyway. Health-care jobs have risen 17.3 percent. There is good money there: physicians and surgeons make more than $200,000 on average while physical therapists make $78,180 and dental hygienists $83,810.

Government has provided a cushion — at a price. Total government jobs have risen 10.9 percent to more than 225,000. College physics and law professors gross more than $100,000. Elementary schoolteachers make $67,020. But controversy abounds: overly generous pension benefits and very early retirements of fire and police employees may very well break the City of San Diego financially.

Although some in the service industries make good money, it is clear that a metro area in which people do one another’s laundry lacks economic oomph, or money coming in from outside.

But there are a plethora of variables holding down manufacturing employment. The biggest problem, of course, is the shipping of jobs overseas. That has been the rage since the 1980s and has wounded the U.S. economy. But there are other factors: companies increasingly use part-time and temporary employees. Through use of sophisticated electronics methods, firms have learned to make do with fewer workers. That is why productivity has been soaring: output per worker-hour is rising.

A look at some San Diego companies is instructive. In ten years, revenues at digital wireless superstar Qualcomm have gone up more than two and a half times, from $3.94 billion to $10.4 billion. But the number of full-time, part-time, and temporary employees has only gone up 66 percent. At Cymer, a maker of semiconductor equipment, sales have shot up two and a half times while employment has risen 41.4 percent. At Callaway Golf, which makes golf equipment, sales have gone up 58 percent while employment has gone up 20 percent.

At WD-40, maker of lubricants and household cleansers, sales have doubled while employment has gone up 76.3 percent. Two local manufacturers have kept employment rising with sales: revenue at Cubic, maker of defense electronic and fare collection systems, has doubled along with employment. At Cohu, maker of semiconductor equipment, employment has gone up at a slightly higher rate than sales.

Biotechs have varying patterns. At Isis Pharmaceuticals, sales have gone up 2.7 times but employment has gone down 13.3 percent. Sales at Amylin have gone up 52 times while employment has risen 28.6 times. At Quidel, revenues have tripled while employment inched up 4 percent.

Low-paid cooks and order-takers are well-nigh ubiquitous at fast-food chain Jack in the Box. In ten years, the company’s sales have risen from $1.46 billion to $2.47 billion. But employment has gone down 5.5 percent. That is deceiving. Increasingly, the company is franchising more outlets and owning fewer. In four years, Jack has gone from 25 percent franchised to 46 percent franchised. The employees of franchisees are not recorded on the books of Jack. So there are more people working in Jack outlets but fewer on the company’s payroll.

Bottom line: employers hold the cards, especially as manufacturing recedes and services rise. High unemployment in the United States and San Diego could be around for quite a while.

Share / Tools

  • Facebook
  • Twitter
  • Google+
  • AddThis
  • Email

More from SDReader


for those looking for employment right now or just wanting to know how your salary stacks up, has real salaries posted, job listings, job search tools and a salary calculator to estimate your salary worth. you can post your own salary or view others all for free.

Response to post #1: That is very good information. Best, Don Bauder

"Bottom line: employers hold the cards, especially as manufacturing recedes and services rise. High unemployment in the United States and San Diego could be around for quite a while."

That bottom line says damn near everything we need to know about how bad things are and will remain "for quite a while."

Far too many manufacturing jobs are still being exported to other countries, and worse yet, resulting American jobs losses will be a multiple of each exported job.

One other fact of life is that it takes money to pay for services, and there is less money to go around to take up any significant slack with service jobs than ever before, except for the elite class that is.

And our incredible debt to China, wars in the Middle East, declining tax revenues along with increasing civil service retirement burdens and dysfunctional federal, state and local governments are causing hellacious cutbacks in societal imperatives such as public safety, education, health and minimum acceptable quality of life resources, etc. that are placing us on a fast track to hell if we don't turn things around quickly.

Radical Right Republican rhetoric is starting to make us look and act like the Germans did before WWII and that is a condition we must avoid even approaching.

Response to post #3: China is not buying as much of our debt as it was. Japan may pick up the slack -- we hope. Companies are exulting about improved profits. But how did they originate? In many cases, from not rehiring people who were laid off, and not hiring new people. And, of course, sending manufacturing jobs overseas where workers make almost nothing an hour. Yeah, these strategies boost the bottom line, but they also keep unemployment around 10%, and will negatively affect consumer spending and housing, which are 75% of the economy. Best, Don Bauder

Nice work. One of the largest clusters of manufacturing jobs with better than average wages in our region is defined as the "working waterfront" which includes the US Navy, ship-building and ship repair, maritime cargo work and related maritime jobs. All these industries have to be on the water and really can't be "outsourced" to another country. Although, there are folks around who want to "outsource" them to another part of the state or country. Thanks for highlighting a local and national problem. Dan Wilkens

To go or not Togo, that is the question. Back to Kansas? Will there be an exodus south of the border? The North, with its heating oil bills, is out of the question.

Phoenix, with it's abandoned plowed and graded subdivision acreages is quite literally a dust bowl. Snowbirds may have to stop migrating; that will slow the flow of Canadian honkers.

High unemployment means fewer local dollars to go to local businesses and taxes, and all the indications are that dollars leaving for Wall Street and Switzerland, ad nauseam, are increasing.

It's that pesky input-output diagram all over again.

It's all so exacerbating!

Yes, good job as usual Don.

A few leetle whines:

I can't read the teeny graphic.

I wonder how the figures compare, in constant dollar terms, with the past?

Response to post #5: There are many high-paying jobs on the waterfront. There are some who would take away those jobs and replace them low-paying service jobs. Examples: putting a hotel or a football field on a port site. Best, Don Bauder

Response to post #6: Dollars that go to Wall Street often wind up in Switzerland -- or the Cayman Islands, or Barbados, or Cook Islands, or Liechtenstein, ad nauseam. Best, Don Bauder

Response to post #7: There was no attempt to compare the salaries with past salaries -- hence, no inflation adjustment. Best, Don Bauder

That’s not even half the pay of the average local worker: $47,250

This is including gov employees.

The pay for the average private sector employee is well below $47K....and the median, I am sure, is well below the average.

The average construction job pays $47,780. Brick masons make $62,500 and glaziers $55,330.

Elementary schoolteachers make $67,020.

I find the wages for the construction jobs high-given that illegal immigrants do a vast majority of construction work in CA today. So I question the $48K figure. Construction is also seasonal, completely shutting down in times like this. Going back 30-40 years, construction jobs paid 3-4 times more than public teaching jobs.

The pay for school teachers-both K-6 and secondary- averages over $66K in cash and $39K in benefits statewide ($105K total comp)-and this is for part time work since teachers only work 37 weeks per year.

Response to post #11: It memory serves me right, comparisons between private and public sector pay are usually medians, not averages, as used here. To compare the two, you have to really should get wages for comparable jobs -- a private sector plumber versus a public sector plumber, etc. Best, Don Bauder

Response to post #12: Your argument is with the Bureau of Labor Statistics, not me. I don't know if the government took illegal immigrants into account in computing these numbers. My guess is that it did not. Construction jobs are hard to measure. There are seasonal factors as well as geographical factors: those workers move from market to market depending on whether construction is hot. Best, Don Bauder

Response to post #4:

What happens when China decides to cash in out on our debt to them?

We can bet that Dick Cheney and the Neocons have their military-industrial complex answer for that.

Something to think about: If we thought the Cold War was bad, wait until the democrats lose their senate and house majorities this year. I still remember being told to be ready to bomb Moscow at any moment back in the days when Cheney's name was Dr. Strangelove.

Cheney can't wait to be the Puppeteer-in-Chief controlling the senate and house again.

What happens when China decides to cash in out on our debt to them?

Both countries would implode. Us more than them.

Response to post #15: Even if the Republicans regain control of Congress (right now a real long shot), I doubt that Cheney would be able to pull the levers of power any longer. He is damaged merchandise. Best, Don Bauder

Response to post #16: China unloaded a record amount of U.S. Treasury debt in December, and lost its place as the biggest foreign holder of U.S. debt. Japan is now in first. The Wall Street Journal had a good story on this yesterday (Wednesday). China sold $34 billion of its $755.4 billion U.S. debt holdings in December. That doesn't mean it will dump everything. It wouldn't be dumb enough to do that. Best, Don Bauder

Response to post #17 &18:

The Chinese Communists and Cheney do have one thing in common that we must never overlook at our peril, they are all liable to do anything to carry out their deranged lusts for world power.

Cheney proved that with his betrayals of America and the U.S. Military in Iraq to carry out the core agenda for the military-industrial complex regardless of how hideous the consequences are to the future of all Americans, and China proves that over and over with their continuous acts of tyranny of their own people, they still are first and foremost communists.

Cheney is still the top Neocon, he and the Republicans sold out the Wealth of America to China during the Bush Autocracy, and they keep proving they will stop at nothing.

As President Eisenhower warned "In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist."

Response to post #19: Ike was right. Just look at all the military contract scandals. Best, Don Bauder

Response to posts #17 18 & 20:

As you just admitted in comment #20, "Ike was right."

And that is why your comment #17 "I doubt that Cheney would be able to pull the levers of power any longer. He is damaged merchandise." is wrong. Cheney still controls the radical right wingers and the military-industrial complex controls congressional republicans. They love every word Cheney rants, to them Cheney is the Second Coming of Jesus so he is definitely not "damaged goods" to them and they are far too powerful to ignore.

As for your comment #18 "That doesn't mean it will dump everything. It wouldn't be dumb enough to do that" about Communists who run China. You had better be very aware that they are as big a threat to America and Democracy as bin Laden. Communist Chinese leaders definitely do not use the same rules of rational thinking we do at all. The fact that they kidnap, torture and murder their own people means that they are more than willing to destroy democracy any way they can, including bankrupting America.

Communist China is very likely to be the ultimate answer to why "Why Your Pocket Is Empty," that as after Cheney and his bunch fleece as much as they can from Americans first because like Ike said "The potential for the disastrous rise of misplaced power exists and will persist."

We can't afford to be naive about communists any more than we can about terrorists, they both want to destroy America any way they can.

Response to post #21: Agreed. Cheney is not damaged goods to the radical right. But he is damaged goods to most of the rest of the populace. Best, Don Bauder

Cheney, with his divisive comments about the new/incoming administration after he left office, have caused great damage to the office of the VP, as well as the nation.

Never before in the history of this nation has an outgoing VP publicly attacked policy of the incoming/current administration.

Bush I am sure is not happy with Obama, but he is NOT going around publicly undermining Obama and publicly criticizing him.

It is despicable behavior from a clown of a former VP.

Response to post #23: Agreed. His behavior is despicable, particularly since he is consistently on the side of the bad guys -- torturers, for example. Best, Don Bauder

Ask millions of Americans why their pocket is empty and they will say "H-1B".

Disloyal so-called "American Corporations" can't move white collar jobs overseas fast enough.

There’s no unemployment in India.

Thanks to IBM, Intel, Microshaft, Google, Cisco, Sun, Motorola and many others..

Wages are stagnant and will soon decline….

Goodbye America Middle Class..

Did anyone else notice that the economy will be picking up right around election time in 2 years? Hmmmmm.....Very convenient to say the least.

I noticed while working at Shell during the last election that the price of gas fell about 20 cents almost over night then went right back up almost immediately. The day before the election, I had to do 3 5 cent price changes in a 10 hour shift. I dropped the price of gas 5 cents at 8:00 at night.

Response to post #25: I used to be a passionate believer in free trade -- following economists from David Ricardo to Milton Friedman. But I agree with you: U.S. companies have perhaps unwittingly helped to destroy the U.S. economy by shipping jobs -- particularly manufacturing jobs -- overseas since the 1980s. The U.S. has not received much in return. It has been a one-way street, for the most part. What was the motivation? Greed. Companies were trying to boost short term profits to please Wall Street and justify outrageous top management pay. It apparently never occurred to any corporate thinkers that as the U.S. lost high-paying jobs, consumers would be permanently wounded and these very same corporations would lose domestic markets. I don't know the answer on the trade question, but I believe we have to re-think our devotion to Ricardo, Friedman, etc. Best, Don Bauder

Response to post #26: Each year, I give a forecast of the Dow Jones Industrial Average for the Downtown Rotary. This year, I said I thought it would go to 12,000, but would be worth 8,000. That's because I can't imagine that the Federal Reserve will stop the liquidity flow -- lending money to banks at almost zero percent -- in an election year. The Fed's balance sheet is so tattered that it will have to begin tightening after November. I think 2011 may be a bad one for the market. However, I must add this note of caution: the markets are now so globalized that what happens in the U.S. may not play such a big role in the Dow's movements. Thus far, the world's major central banks have also kept rates at ridiculously low levels. Thus, we have seen a worldwide, coordinated orgy of incredibly easy money. It has to stop. The U.S. election cycle will play a role, but so will election cycles overseas. Best, Don Bauder

Ask millions of Americans why their pocket is empty and they will say "H-1B".

There’s no unemployment in India.

Thanks to IBM, Intel, Microshaft, Google, Cisco, Sun, Motorola and many others..

Goodbye America Middle Class..

By Ponzi

I guess Ponzi didn't hear, Bill Gates said there are not enough American engineers to work at MS!! (or at least for $40K per year that is:))

Response to post #29: And not everybody is impressed with the quality of Microsoft's engineering. Best, Don Bauder

As good as this article is in pointing out how limited our economy can be when we turn out few products beyond a few ships, flying drones, and aerospace components for sale elsewhere, we must also consider how much money is siphoned off by Sempra Energy from everyone who happens to be plugged into the grid.

Sempra Energy receives sums approaching half a billion a year from local electricity franchisee SDG&E (based on quarterly reports of SDG&E earnings to Sempra Energy in excess of $100 million every three months, where SDG&E was recently granted another 3% rate increase by CPUC). And what does Sempra Energy do with this pot o' gold? Between 37% to 40% of Sempra Energy's retained earnings gets paid out as dividends to stockholders, most of whom are institutional investors not based anywhere near San Diego County. Of the rest, none of it goes to putting power lines underground to reduce our threat of wildfires, as the Governator proposes another property fee to address the wildfire threat.

From the Corporate Viewpoint: Who said bribing people to hold onto stock is a bad thing?

Response to post #31: Sempra stock yields 3.2% -- lower than most comparable utilities, which generally yield between 4% and 5%. So proportionately, Sempra doesn't pay as much in dividends as comparable utilities. Best, Don Bauder

RE #32:

I guess the recent SDG&E 3% rate increase makes Sempra Energy a more attractive investment now, where next quarter's SDG&E pass-through of profit to its corporate parent must be well in excess of $107M. If not, then I'm missing something...

Response to post #33: The PUC as now constituted cares about utilities' profits and cares not a whit about consumers' well-being. Best, Don Bauder

Utilities are scam central.

I had friends that worked for PG&E in Nor Cal, one of the biggest in the nation, and the amount of money the employees received was just outrageous. These were HS grads doing the grunt work and they were pulling down huge paychecks.

And as you can imagine, what happens when you pay 6 figure comp packages to HS grads when you work in this type of mopnopoly, (like the gov), you only get hired if you're part of the family and friends network.

Response to post #35: As far as salaries go, utilities are nothing like Wall Street. In fact, I think you will find that in general, utility compensation is lower than in most industries, although pension benefits tend to be higher, as in government. Best, Don Bauder

In fact, I think you will find that in general, utility compensation is lower than in most industries, although pension benefits tend to be higher, as in government.

PG&E employees were pulling down sky high compensation, far gigher than anything in similar industries. I cannot comment on SDG&E or So Cal Edison.

Response to post #37: If what you say is true, I believe that PG&E would have been well outside the norm for utility compensation. Best, Don Bauder

Log in to comment

Skip Ad