SF economy continues to flourish amid all-time employment high

San Francisco’s booming economy continued to flourish last year, with even some industries previously on the decline seeing an uptick as The City enjoyed an all-time employment high of 640,000 jobs, according to a recent economic report.

That’s a 22 percent increase from The City’s employment low in 2005 of 523,400 jobs following the dot-com crash, The City’s 2014 Commerce and Industry Inventory report stated.

The report, presented Thursday to the Planning Commission, highlighted a continuation of trends that San Francisco has experienced in the past several years since reviving itself after the recession.

The greatest number of jobs in The City are in the office sector, which includes administration, legal services, architecture, engineering, real estate, computer serves, research and development activities. The Cultural/Industrial/Educational (CIE) arena that includes entertainment, artistic, health and educational activities, many of which are non-profits, has the second highest amount.

Office jobs increased to 260,976 in 2014, marking 40 percent of the total jobs in San Francisco that year and a 6.8 percent increase from the previous year. CIE jobs increased to 157,988 in 2014, comprising nearly 25 percent of The City’s jobs and a 1.2 percent increase from 2013.

Production/Distribution/Repair (PDR) jobs, like manufacturing, construction, transportation and utilities, however, fell from 16 percent of The City’s jobs in 2005 to 13 percent in 2014.

But Commissioner Michael Antonini noted that despite the overall decrease in PDR jobs in the past decade from 84,693 in 2005 to 81,519 in 2014, that number has started to rise again in recent years, increasing 3 or 4 percent annually since 2012 when the industry dropped to 72,466 jobs.

“We have to encourage that and make the most efficient use of our PDR zoned areas, particularly the core areas that are best designed to process that work,” Antonini said.

“It probably will never reach historic levels when we were a manufacturing city in the early first half of the 20th century, but we can probably continue to support those PDR jobs that are appropriate and can survive and thrive in San Francisco,” he added.

Commissioners also emphasized a need to compare The City’s commerce data to housing information, perhaps using the Housing Balance Report that was first released last summer.

“Clearly we’ve seen an uptick in higher income jobs, typically in office type environments in San Francisco,” Commissioner Christine Johnson said. “One thing that I’d want to wonder is whether or not that data jives with how we’re considering our affordability needs today.”

The average wage in San Francisco is $91,940, with workers in the office sector earning the highest average wage at $138,900. Those in the CIE make an average of $59,800, hotel workers earn $46,700 and retail workers earn $35,600.

Meanwhile, the hotel industry saw an 8 percent drop in jobs between 2013 and 2014, and the number of jobs in that area fell to below 17,000 for the first time in the past decade.

Michael Potepan, associate professor of economics at San Francisco State University, said that while San Francisco is clearly in a boom economy, history has shown that such cycles – from the California Gold Rush of the 1850s to the more recent dot-com boom – don’t last forever.

“There are times like now when [the economy is] really flying and there’s a big uptick in jobs, but there are recessions where it really craters,” Potepan said.

He added that a strong economy typically benefits most residents in a positive way.

“There’s a lot of general economic research that suggest when cities are growing faster and their unemployment rates are lower that the benefits do spill out,” said Potepan. “People who [don’t] necessarily have highest education levels or incomes do benefit indirectly from the job growth.”

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