San Francisco’s job market is weakening, being buoyed by ongoing strength in the tourism industry, according to The City’s monthly economic barometer.
The report, released Thursday by The City’s Office of the Controller, also said the ailing economy has begun to cool off in San Francisco after several years of strong growth.
San Francisco may be receiving unemployed migrants from more hard-hit parts of the state who are looking for work, according to the report.
“San Francisco’s labor force [employed plus unemployed] has grown at twice the state rate over the past year, and the unemployed make up nearly half of that growth,” according to the report.
Chief economist Ted Egan speculated that many are coming from the Central Valley. The report also said while “unemployment is rising rapidly in The City,” at 5.7 percent, it continues to have “among the lowest” jobless rate of California counties.
The monthly economic report also states that The City’s retail sector may be “cooling after several years of rapid growth.” The report points to a “significantly lower” number of cars parking at garages around Union Square compared to last year without a commensurate increase in transit ridership.
A strong retail sector — a pillar of The City’s top industry, tourism — results in a larger flow of revenue funneling into San Francisco’s operating budget, which pays for services such as gardeners, street sweepers, graffiti abatement and police.
The retail sector’s largest financial contribution to The City’s coffers is through local sales-tax revenues. Last fiscal year, the retail sector generated 33 percent of the $112 million The City received in sales tax.
“Very few retailers expect a holiday season to be better than last year, and [most] expect it to be less,” said Linda Mjellem, executive director of the Union Square Association.
She said international travelers, benefiting from the weakened American dollar, “are keeping our retailers afloat.”
Egan said a cooling down is also indicated in the most recent sales-tax data. The first quarter of 2008 showed a 1.9 percent increase in sales-tax revenue compared to the first quarter of 2007, whereas in 2007, there was a 7.3 percent increase in the first quarter compared to the same quarter of 2006. Egan said he could not predict the future health of the retail sector, but up until now it had not suffered from the nation’s economic downturn as had retail in the rest of the state.
“While there is some sign of slowing in certain sectors, in this month’s barometer, the overall picture for The City continues to look strong,” City Controller Ben Rosenfield said.
“They cut my salary. now I feel like I have to budget myself. I need to measure a lot more of what I’m spending because it’s a lot tighter. Last year, I had more spending power.”
– Tomas Valota, 26 San Francisco Nonprofit manager