It Pours, Man It Pours

By May 19, 2009Economy

From City Journal, Winter, 1993:

L.A.’s Engine of Growth

Joel Kotkin

Despite Southern California’s economic and social troubles, there is reason for hope about the region’s future. A remarkable new manufacturing economy is evolving based on small firms. These companies, many owned by minorities and immigrants, are providing economic opportunities to the region’s poor and a basis for ethnic harmony.

Los Angeles, long dismissed as an overgrown suburb or a city without a center, now occupies center stage in the national debate over the future of American urban civilization. Last spring’s riots created a grim and misleading impression of Los Angeles as a breeding ground for poverty and racial strife. In fact, Southern California remains in large part a land of opportunity. Facing the fast-growing Pacific Rim, Los Angeles is at the heart of a profound transformation of the American urban economy. The dominance of the Fortune 500 is fading, while smaller, more flexible firms, many owned by minorities and immigrants, are coming to the fore…[snip]

During the 1980s, Southern California—in sharp contrast to New York and other traditional manufacturing regions—actually expanded its production, particularly in the “edge city” areas on its periphery. Indeed, until the recession reached California, small industrial firms were still creating enough new jobs to replace those lost by the departure of larger companies, according to a study by the Center for the New West. Not surprisingly, the 1980s saw the construction of ten times as much new industrial space in the Los Angeles area as in New York; similarly, industrial expansion in the Los Angeles suburbs vastly outpaced that of areas such as Long Island and northern New Jersey.

No Schadenfreude, here, just an observation that policies and votes helped take a vibrant California manufacturing economy in 1993 — even after the riots — to something other than growth, expansion and dynamism.

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