As reported in the news of the OC Register, Cal State Fullerton economics professor Adrian Fleissig released the quarterly Southern California Leading Indicator, which attempts to predict economic activity three to six months out, earlier this week. The report essentially said the nation and Southern California should expect an uptick in economic activity in the near future.
With Labor Day right around the corner, Fleissig recently shared his perspective on the labor market and what Orange County should expect with respect to jobs.
Q. What’s your theory for why the workforce participation rate has dropped so much, from more than 66 percent nationwide in 2000 to 63.4 percent today?
A. The participation rate has declined since the Great Recession. One explanation is that as the county began to lose jobs and the unemployment rate increased, some people simply stopped looking for work and just left the labor force. Another reason is that more people now receive social security and disability benefits and thus leave the labor force. For Orange County, a main factor contributing to the decline in the labor force is also from people retiring and those going back to school.
Q. What jobs represent the best hope for new graduates to earn a middle-class income in years to come?
A. For new graduates, the job market certainly looks a lot better than last year. With the real estate sector gaining momentum, better-paying jobs related to the housing sector will emerge including management and finance jobs related to real estate. Of course, in Orange County, the high-tech industry provides some of the better compensated opportunities. Leisure, hospitality and health care are other areas that will continue to offer good paying jobs.
Q. Your indicator projects an increase in Southern California economic activity in the next three to six months. How will that translate to job growth?
A. It is now clear that the worst of the Great Recession is behind us here in Orange County. So the positive increase in the indicator predicts that employment should increase as firms need to hire more people to meet the increase in demand for goods and services.