Economic Analysis San Francisco County by Escarleth Cucurachi Ortega

San Francisco County Economic Analysis Escarleth Cucurachi Ortega

UP 854 Economics of Planning and Development Instructor: Dr. Mark Wilson Summary San Francisco’s economic landscape is marked by complexity and challenges, including income disparities influenced by educational attainment. While the city boasts a strong labor force and a youthful workforce, job security concerns persist. Housing problems, high renter rates, and barriers to homeownership highlight affordability issues. Income distribution reveals a dual reality with robust middleclass and high-income households but also disparities in access to essential services. Further, the tech industry’s dominance raises questions about diversification and longterm sustainability. Moreover, the location quotient analysis suggests economic diversity, reducing vulnerability to downturns. Lastly, the New Economy Survey is pivotal in addressing these issues, gathering insights from the public and local officials for informed economic development strategies. However, interpreting survey findings requires considering San Francisco’s unique economic and demographic characteristics, and acknowledging the city’s distinct challenges and opportunities. In order to address the economic and planning challenges faced by the region, it is imperative to acknowledge the opportunities presented by the current economic framework.

MURP | MSU October 2023

Table of Contents

03 Executive Summary 04 Economic Conditions

05 Demographic Description 06 Economic Base 06 Educational Attainment 07 Employment 08 Poverty 09 Housing 10 Income 11 Location Quotient 14 Shift Share 14 Employment Growth by County 2016 vs. 2021 15 San Francisco County Employment, 2016-2021 16 Employment Growth Index, 2016 = 100% 17 Graphical Summary of Shift-Share Analysis Results

18 Economic Development 19 New Economy Survey 20 Major Employers 21 City Responsiveness

22 Recommendations 24 References

Executive Summary This document is an economic analysis of San Francisco County, a region within California known for its diverse districts, each with unique cultural and historical backgrounds, from the bustling financial district to the eclectic Mission neighborhoods and picturesque Golden Gate Park, where tradition and modernity coexist. The initial section of this study explores the region’s economic conditions, vital for strategic planning. It assesses educational attainment, employment rates, poverty levels, housing data, and income disparities, comparing the county’s performance against national benchmarks from 2017 to 2021. This helps establish a clear link between economic conditions and planning. In addition, Using location quotients, the following examines the county’s industrial composition relative to the United States, identifying sectors for future development and areas requiring attention. A review of these findings precedes an exploration of industrial location and economic planning challenges and opportunities. Lastly, a shift-share exploration for the most recent five years covers actual growth, national growth, industry mix, and regional shift. This provides nuanced insights into the dynamic economic landscape. The subsequent section delves into economic development, drawing from a report on “Public Opinion of the New Economy, Placemaking, and Economic Development Strategies for Michigan.” It assesses the significance of survey findings, particularly examining the relevance of statements regarding Entrepreneurs, Diversified Economy, Future Success, and Placemaking. Additionally, the document identifies and discusses the county’s five most significant employers, outlining their contributions to the local economy and future expectations. Ultimately, it explores economic development and industrial location assistance provided by the local government website, evaluating accessibility and its impression on potential investors and entrepreneurs. To conclude, the document concisely recaps key opportunities and challenges that an economic development strategy for San Francisco County must address, guiding the region’s economic future within the broader California landscape.

Key Facts Population 885,932 Households 378,943 Median Age 40.5

Income Median Household Income $129,536 Per Capita Income $82,956 Median Net Worth $151,294

Employment White Collar 81% Blue Collar 8% Services 13% Unemployment Rate 3.9%

Source: Esri. The vintage of the data is 2023, 2028.

SAN FRANCISCO’S ECONOMIC ANALYSIS

Economic Conditions Summary San Francisco County is culturally diverse and economically vibrant, nestled between the Pacific Ocean and San Francisco Bay. Its history, shaped by the Gold Rush, the 1906 earthquake, and tech booms, defines its character with diverse neighborhoods, modern skyscrapers, and a focus on seismic safety. Educational attainment greatly influences income, with graduates earning $122,751, and those without a high school diploma making $26,930. A strong labor force participation rate and full-time employment signify a motivated workforce, though poverty rates reveal disparities, especially among youth and part-time workers. Housing, income distribution, and tech industry dependence raise diversification concerns. Location quotient analysis indicates economic diversity, reducing vulnerability to downturns, but shiftshare analysis reveals underperformance, partly due to the COVID-19 pandemic, necessitating comprehensive economic examination and recovery strategies.

Demographic Description

United States

California State

San Francisco County Image 1. San Francisco County Location. Source: reddit.com/r/sanfrancisco

San Francisco, located on a distinctive peninsula between the Pacific Ocean and San Francisco Bay, covers 46 square miles. As of 2010, it was home to 805,235 residents and is a central cultural and financial hub in the western United States, known for its cosmopolitan character. The city’s terrain is hilly, surrounded by suburban areas to the south, the bay to the east and northeast, and the vast Pacific Ocean to the west and northwest (Lamott et al., 2023). San Francisco’s history is diverse, beginning with indigenous Yelamu tribes around 3000 B.C. European contact started in the 16th century, leading to American influence after Mexican rule. The 1848 Gold Rush fueled population growth and brought lawlessness and fires. The late 19th century saw the rise of iconic features like Chinatown, cable cars, and Golden Gate Park. Despite setbacks like the 1906 earthquake, the city rebuilt and hosted the 1915 Panama International Exposition. It played a significant role in World War II and became a counterculture hub during the 1967 “Summer of Love.” Recent history included a 1989 earthquake and a 1990s technology boom, solidifying its position as a diverse, activist, and innovative hub (History Editors, 2018). San Francisco’s landscape features districts like the central business district, financial district, North Beach, and Chinatown. Beneath modern office buildings, remnants of 1849 Gold Rush ships can be found. To the west is the historic Presidio near the Golden Gate Bridge, and to the south is Golden Gate Park. The city offers diverse residential neighborhoods, from upscale Pacific Heights to predominantly African-American Hunters Point. Since the late 1960s, tall skyscrapers have transformed the skyline, but ongoing concerns for seismic safety due to earthquakes, especially the 1906 quake, have led to modern construction methods in newer buildings (Lamott et al., 2023).

ECONOMIC CONDITIONS

Economic Base Educational Attainment 'EPMJSVRME 7XEXI

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Figure 1. Median Earnings in the Past 12 Months (In 2021 Inflation-Adjusted Dollars). Source: United States Census Bureau, ACS 5-Year Estimates Subject Tables.

The educational attainment data for San Francisco County in 2021 underscores the strong correlation between education and income, shedding light on the complex socioeconomic landscape of the region. This data highlights the economic disparities associated with educational qualifications and their implications for planning and policy. One central theme of this data is the stark earnings gap based on educational levels. It reveals that individuals who invest in higher education enjoy significantly higher financial rewards. For instance, those with a graduate or professional degree in San Francisco County earned a median income of $122,751, a figure substantially higher than the $26,930 median income reported by those with less than a high school diploma (see Figure 1). This striking contrast underscores the transformative power of education in unlocking higher earning potential, aligning with a broader national trend. The data demonstrates that pursuing post-secondary education offers substantial economic advantages, particularly at the bachelor’s and advanced degree levels. A college education broadens career opportunities and often leads to higher-paying jobs. In San Francisco County, individuals with a bachelor’s degree reported a median income of $94,314, emphasizing the financial benefits of undergraduate education (see Figure 1). This mirrors the societal understanding that higher education is a pathway to improved

SAN FRANCISCO’S ECONOMIC ANALYSIS

economic prospects and financial stability. Moreover, the data highlights the significant income benefits of advanced degrees, with those holding graduate or professional degrees in San Francisco County enjoying the highest median earnings of $122,751 (see Figure 1). This trend aligns with the national economic landscape, where professionals with advanced qualifications are often in high demand. Comparing San Francisco County to California and the United States reveals that the region generally boasts higher median earnings across all educational attainment levels. This discrepancy is attributed to the county’s role as an economic powerhouse with a robust job market and a concentration of high-paying industries. However, it is essential to note that the higher income levels are also influenced by the county’s elevated cost of living, which can contribute to income disparities between regions. Beneath the data lies a critical socioeconomic narrative. The stark disparities in earnings based on educational attainment signal the need for more outstanding efforts in promoting educational equity and access. Individuals with less than a high school diploma, earning the lowest incomes, may face challenges like limited access to quality education and job opportunities. To address these disparities, comprehensive educational reforms and workforce development programs are essential for fostering socioeconomic mobility and reducing income inequality within the county.

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Figure 2. Employment Status and Work Status in the Past 12 Months. Source: United States Census Bureau, ACS 5-Year Estimates Subject Tables.

San Francisco County’s 2021 employment landscape reveals a robust and dynamic workforce. However, it also points to crucial planning issues related to the region’s economic sustainability and the well-being of its residents. The labor force participation rate, holding steady at 71.2%, is a positive sign. It shows that a significant portion of the population aged 16 and over actively participates in the job market (see Figure 2). This stable rate aligns with the county’s reputation as an innovation and economic growth hub, indicating a motivated and engaged workforce. The relatively youthful median age of workers, at 37.1 years (see Figure 2), is an asset for the county. A younger workforce brings adaptability and fresh perspectives well-suited to the dynamic San Francisco Bay Area economy. However, it also raises planning challenges, such as addressing the unique needs of this demographic, including affordable housing, educational opportunities, and work-life balance. Despite a slight decline, the mean usual workweek of 40.2 hours indicates that a significant portion of the workforce maintains full-time employment (see Figure 2). This commitment suggests economic stability for many residents and underscores the vitality of key industries. However, it also highlights the demand for full-time work, potentially leading to work-life balance issues and concerns about stress and burnout.

The 68.8% of workers aged 16 to 64 in full-time, year-round employment speaks to the region’s economic resilience (see Figure 2). This high percentage reflects stable employment opportunities, contributing to residents’ economic well-being, financial security, and a higher quality of life. Nevertheless, it may also raise concerns about job security and the prevalence of gig work or precarious employment, impacting economic security and long-term planning for the workforce. San Francisco County’s labor force participation rate consistently outperforms California and national averages, indicating an engaged and robust workforce. While this is a positive sign for the county’s economic vibrancy, it underscores the need for comprehensive planning initiatives.

These efforts should focus on supporting a younger and adaptable workforce, addressing work-life balance concerns, and ensuring job security in a competitive job market.

ECONOMIC CONDITIONS

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Figure 3. Unrelated Individuals for whom Poverty Status is Determined. Source: United States Census Bureau, ACS 5-Year Estimates Subject Tables.

San Francisco County’s poverty data in 2021 reveals stark disparities across various age groups and employment statuses, highlighting the pressing need for targeted support and effective planning to address economic inequities. The most striking aspect is the alarmingly high poverty rates among youth aged 15 to 24, ranging from 38.4% to 95.7% (see Figure 3). These rates underscore the significant challenges the county’s youngest members face and emphasize the urgent need for tailored support and economic opportunities. The age group of 25 to 44, representing the prime working-age population, also experiences higher poverty rates, particularly among those working less than full-time (see Figure 3). This data highlights the importance of stable, full-time employment, as individuals with irregular work hours are at greater risk of falling below the poverty threshold. Middle-aged adults aged 45 to 74 face consistent economic challenges, with poverty rates consistently exceeding state and national levels (see Figure 3). Factors such as the high cost of housing and living impact savings and financial stability. Conversely, the data suggests that older residents aged 75 and over have relatively better financial support (see Figure 3), likely due to retirement benefits or social programs. The lower poverty rates in this age group underscore the importance of

SAN FRANCISCO’S ECONOMIC ANALYSIS

social safety nets for seniors, emphasizing the need to ensure access to vital social services for this demographic. A recurring theme in the data is the strong connection between employment status and poverty. Those working full-time, year-round experience significantly lower poverty rates, while individuals working less than full-time or not working at all face higher poverty rates. This underscores the critical role of stable employment in reducing poverty. Comparing San Francisco County to California and the United States reveals consistent disparities, with the county reporting higher poverty rates across various age groups and employment statuses. The records emphasize significant economic inequalities in San Francisco County, particularly among youth and those with irregular or part-time employment. To alleviate poverty and promote economic equity, comprehensive planning is essential, focusing on targeted support, and the creation of stable employment opportunities. Adequate planning will play a pivotal role in addressing and reducing poverty levels in the county, ultimately fostering well-being and economic stability.

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Figure 4. Tenure by Age of Householder (Percentage). Source: United States Census Bureau, ACS 5-Year Estimates Subject Tables.

In San Francisco County, the percentage of owner-occupied housing is notably lower than in California and the United States. The majority of homeowners fall within the age group of 35 to 74 years, making up more than 50% of owner-occupied housing (see Figure 4). This suggests that middleaged and older residents in San Francisco County are more likely to own their homes, with relatively fewer young homeowners. Conversely, renter-occupied housing is significantly higher in San Francisco County compared to state and national averages, with nearly 62% renting housing. The age distribution of renter households shows that younger age groups, particularly those between 15 and 34 years, are more likely to rent (see Figure 4). This indicates that young adults and those starting their careers prefer renting over owning homes in this region. Comparing these figures to California and the United States, it is evident that San Francisco County stands out for its higher rate of renters and lower rate of homeowners, particularly in the 35 to 74 age group (see Figure 4).

The county’s housing market and affordability challenges likely contribute to these trends, making it more challenging for residents to transition from renting to homeownership, especially in the costly San Francisco real estate landscape. These statistics provide insight into the housing choices made by San Francisco County residents of different age groups. They reflect the complex interplay of factors such as housing costs, job markets, and lifestyle preferences in this unique urban environment. Additionally, the county’s housing landscape differs from the state and national averages, emphasizing the need for targeted housing policies and support. Notably, there is a need for initiatives that focus on housing affordability and access, as well as strategies to accommodate the evolving preferences of younger individuals aspiring to own homes in San Francisco.

ECONOMIC CONDITIONS

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Figure 5. Income in the Past 12 Months (In 2020 Inflation-Adjusted Dollars). Source: United States Census Bureau, ACS 5-Year Estimates Subject Tables.

San Francisco County’s income landscape offers a captivating insight into its economic diversity. It reflects a dual reality of wealth and income distribution, emblematic of its vibrant, multifaceted profile. The county’s appeal as a global tech and innovation center is evident in the substantial presence of high-income households, with 31.5% earning over $200,000 in 2021 (see Figure 5). Tech giants and startups attract wellpaid professionals, entrepreneurs, and executives, making San Francisco synonymous with success and affluence. However, beyond this tech elite, a robust middle class thrives, with 14.9% of households reporting incomes between $100,000 and $149,999 (see Figure 5). This contributes to the county’s economic vitality, fostering a balanced and inclusive community, a vital indicator of financial stability and social well-being. Despite this, addressing income disparities within the county is crucial. A significant percentage of residents earn between $25,000 and $74,999, comparable to the national average (see Figure 5). These households, while not as affluent as their high-earning counterparts, play pivotal roles in diverse industries, contributing to the county’s social fabric and diversity. The county’s income growth over the years underscores its economic resilience and adaptability. Both median and mean incomes have

SAN FRANCISCO’S ECONOMIC ANALYSIS

consistently increased, demonstrating the region’s economic robustness. This ability to maintain upward mobility during challenging economic periods solidifies San Francisco County’s status as a dynamic economic hub, embracing new opportunities and industries. However, while San Francisco County showcases a remarkable economic spectrum, it also raises important planning issues. The income disparities within the county may exacerbate issues related to affordable housing, access to quality education, and social services. The cost of living in San Francisco is notably high, making it challenging for low and middle-income residents to secure affordable housing. This can lead to social stratification and inequality, affecting the community’s overall well-being. Effective planning should aim to address these disparities by promoting affordable housing initiatives, supporting educational opportunities, and ensuring that social services are accessible to all residents, irrespective of income. Moreover, the county’s economic reliance on the tech industry raises concerns about diversification and long-term financial sustainability. Effective planning should include strategies to diversify the economy and reduce its dependence on a single sector, ensuring stability in the face of economic fluctuations.

Location Quotient Location Quotient by Industry Sector Information

3,42

Professional/Scientific/Tech

2,79

Finance/Insurance

1,2

Real Estate/Rental/Leasing

1,17

Arts/Entertainment/Recreation

1,05

Accommodation/Food Services

1,03

Management of Companies

1 0,86

Transportation/Warehousing

0,85

Industry

Admin/Support/Waste Management Health Care/Social Assistance

0,85

Other Services (Excluding Public)

0,77

Educational Services

0,77

Retail Trade

0,75

Public Administration

0,72

Wholesale Trade

0,63

Utilities

0,62

Construction

0,46

Agriculture/Forestry/Fishing

0,09

Mining/Quarrying/Oil & Gas

0 0

0,5

1,5

2,5

3,5

Location Quotient

Sectors Economic Resilience: Based on the data provided, it is evident that the employment landscape in the given location is diverse, with a wide range of industries contributing to the local economy. This diversity reflects a healthy and balanced economic environment, which can have several advantages. The presence of multiple industries, including professional/technical services, retail, healthcare, and information (see Graphic 1), means that the local economy is less vulnerable to economic downturns in any single sector. If one industry experiences a downturn, the negative impact on employment is mitigated by the strength of other sectors. Specialization: Furthermore, the presence of high-location quotient sectors like information and professional/ technical services (with location quotients well above 1) suggests that the location has developed specialized expertise in these areas (see Graphic 1). This specialization can attract more businesses and

Graphic 1. Location Quotient by Industry Sector. Source: Esri forecasts for 2023 and 2028.

talent to the area, further strengthening the local economy. Diverse Employment Opportunities: A variety of industries means that there are diverse employment opportunities for residents. Whether one’s expertise is in healthcare, retail, or information technology (see Graphic 1), there are job prospects in various sectors, making the region attractive to a wide range of job seekers. Balanced Local Economy: The data shows that the employment distribution in this location is somewhat in line with the U.S. average, with some exceptions (see Graphic 2). The location quotient measures indicate that certain sectors, like information and professional/technical services, are overrepresented, while others, like agriculture and mining, are underrepresented (see Graphic 1). This balance is important for the overall stability and sustainability of the local economy.

ECONOMIC CONDITIONS

Percentage of the Industry by Sector

Investment and Growth Potential: Lastly, industries with high location quotients, such as information and professional/technical services, may be ripe for further investment and growth (see Graphic 1). Businesses in these sectors could see advantages in expanding or establishing a presence in the area, potentially leading to increased job opportunities and economic growth.

Public Administration Other Services (Excluding Public) Accommodation/Food Services Arts/Entertainment/Recreation Health Care/Social Assistance Educational Services Admin/Support/Waste Management Management of Companies Professional/Scientific/Tech Real Estate/Rental/Leasing Finance/Insurance Information Utilities Transportation/Warehousing Retail Trade Wholesale Trade Construction Mining/Quarrying/Oil & Gas Agriculture/Forestry/Fishing 0,00%

5,00%

10,00%

US Percent

15,00%

20,00%

25,00%

San Francisco County

Graphic 2. Percentage of the Industry by Sector. Source: Esri forecasts for 2023 and 2028.

The diverse industrial composition in this location indicates a robust and adaptable local economy. The presence of both specialized sectors and more general industries suggests resilience, a broad range of job opportunities, and the potential for future growth and investment. This economic diversity is a valuable asset that can contribute to the region’s long-term prosperity and stability.

SAN FRANCISCO’S ECONOMIC ANALYSIS

30,00%

Subsectors

LQ 9.54 Web search portals, libraries, archives, and other information services

LQ 8.92 Computing infrastructure providers, data processing, web hosting, and related services

LQ 2.85 Professional, scientific, and technical services

LQ 0.23 Electrical equipment, appliance, and component manufacturing

LQ 0.03 Transportation equipment manufacturing Figure 6. Private, NAICS Sub-Sectors, San Francisco County, California 2023 Source: Quarterly Census of Employment and Wages - Bureau of Labor Statistic.

Subsectors, such as web search portals, libraries, archives, and other information services, and computing infrastructure providers, data processing, web hosting, and related services, display significantly higher location quotients, indicating their strong presence compared to the U.S. These subsectors hold promise for further development and can attract more businesses and investments. The subsector of professional, scientific, and technical services, while not as specialized, exhibits a higher-than-average location quotient, indicating the presence of a skilled workforce. This presents an opportunity to attract businesses in this category and leverage this asset for further economic development. Conversely, the subsectors of electrical equipment, appliance, and component manufacturing, and transportation equipment manufacturing, have lower-than-average location quotients, suggesting room for development. Given the region’s strong performance in the information technology and transportation sectors, these subsectors present openings for growth and expansion. The data for San Francisco County underscores several crucial factors for industrial location and economic planning. The county’s diverse employment landscape promotes economic resilience and reduces susceptibility to economic downturns. High location quotients signify specialized expertise that can attract businesses and talent, strengthening the local economy. Furthermore, the presence of a variety of industries ensures diverse employment opportunities, attracting a broad spectrum of job seekers and fostering a skilled and versatile workforce. A balanced local economy is essential for stability, necessitating measures supporting underrepresented sectors. Additionally, highlocation quotient sectors offer significant investment and growth potential, making them appealing for businesses to expand and contribute to economic growth.

ECONOMIC CONDITIONS

Shift Share Employment Growth by County 2016 vs. 2021, Net Percent Change

Graphic 3. Employment Growth in San Francisco County (2016-2021). Source: California REAProject.org, Regional Income Division, BEA (11-16,2022)

Based on the provided data, it is evident that San Francisco County’s employment growth over the period from 2016 to 2021 lagged behind the national average by a significant margin of -6.16% (see Graphic 3). This underperformance in employment growth is a crucial aspect that requires closer examination and analysis. Notably, the COVID-19 pandemic triggered a flight of workers due to office work restrictions, with many individuals opting for remote work from areas where housing costs are not as prohibitive (Fox, 2023). Out of 58 counties, San Francisco County ranked #48, meaning it was in the bottom third of counties regarding employment growth (see Graphic 3). Not only did it trail behind 47 counties, but it also outperformed only ten others (Shift-Share Analysis of Employment Growth, 2022). This situation raises questions about the county’s economic vitality and the factors contributing to this underperformance. Furthermore, the fact that San Francisco County’s net employment growth was -2.17%

SAN FRANCISCO’S ECONOMIC ANALYSIS

during this period places it just above Mariposa County and slightly below Del Norte County (ShiftShare Analysis of Employment Growth, 2022). This proximity in employment growth rates indicates that San Francisco County faced challenges comparable to those in other counties with lower employment growth. The negative shift in San Francisco County’s share of employment nationwide is a cause for concern. It implies that the county’s relative contribution to national employment declined during this period. Analyzing the reasons behind this shift is vital for understanding the factors affecting the county’s employment dynamics. This data highlights the need for a comprehensive examination of the local economy and potential strategies to improve employment growth and overall economic performance in San Francisco County, considering the impact of the COVID-19 pandemic on workforce mobility and remote work preferences.

San Francisco County Employment, 2016-2021

Graphic 4. San Francisco County Employment (2016-2021). Source: California REAProject.org, Regional Income Division, BEA (11-16,2022)

The research results presented in this report shed light on San Francisco County’s employment growth from 2016 to 2021, employing shift-share analysis. During this period, San Francisco County witnessed a concerning decline in employment, with job numbers dropping from 931,148 to 910,916 (Shift-Share Analysis of Employment Growth, 2022). This significant net loss of 20,232 jobs translates to a -2.17% decrease (see Graphic 4). Considering the context provided by yearby-year employment levels spanning from 2001 to 2021 is essential. This historical perspective offers valuable insights into the county’s employment dynamics (Shift-Share Analysis of Employment Growth, 2022). It becomes evident that the employment trajectory over the years leading up to 2016 was significantly impacted by various economic factors, ultimately influencing the

employment change observed in the interval from 2016 to 2021. This data raises important questions and concerns about San Francisco County’s economic resilience and adaptability. A -2.17% drop in employment is a substantial change that has implications for the local workforce, businesses, and the region’s overall economic health. Understanding the factors contributing to this decline and how they relate to broader economic trends is crucial for informed decision-making and developing strategies to address this employment challenge. It emphasizes the need for local authorities and policymakers to focus on economic recovery and growth initiatives to reverse this employment decline and ensure the county’s long-term economic vitality.

ECONOMIC CONDITIONS

Employment Growth Index, 2016 = 100%

Graphic 5.Employment Growth Index in San Francisco County (2016-2021). Source: California REAProject.org, Regional Income Division, BEA (11-16,2022)

The data presented in this report warrants a close examination of San Francisco County’s employment trends from 2016 to 2021. The -2.17% decline in employment during this period starkly contrasts the nationwide trend, which saw a 3.99% increase in employment (see Graphic 5). To comprehend the significance of this decline, it is imperative to consider the indices that represent San Francisco County and U.S. employment in 2016 as 100. These indices serve as a vital tool for assessing the trajectory of employment changes year by year, especially when analyzed over the extended period from 2001 to 2021 (Shift-Share Analysis of Employment Growth, 2022). The stark contrast between San Francisco County’s employment decline and the national employment growth calls for a deeper investigation into the factors contributing to this disparity.

SAN FRANCISCO’S ECONOMIC ANALYSIS

It prompts important questions about the county’s economic resilience and adaptability, particularly in the face of broader economic trends. Understanding the dynamics of this decline and its implications is essential for policymakers and local authorities. Moreover, the employment indices provide a direct means of comparing the county’s employment patterns with those of the nation over the twodecade period. This data emphasizes the need for targeted strategies and policies to address the specific challenges that have led to this decline in San Francisco County’s employment.

Graphical Summary of Shift-Share Analysis Results San Francisco County Employment Change Over 2016-2021

Graphic 6. Graphical Summary of Shift-Share Analysis Results San Francisco County (2016-2021). Source: California REAProject.org, Regional Income Division, BEA (11-16,2022)

The shift-share analysis provides a valuable lens through which to dissect and diagnose San Francisco County’s employment growth from 2016 to 2021. It accomplishes this by dissecting the actual growth from the hypothetical growth that would have transpired had the county’s growth directly mirrored the nationwide expansion (Shift-Share Analysis of Employment Growth, 2022). This “expected or standardized growth” is a benchmark for evaluating the county’s growth trajectory. The results of this analysis are encapsulated in the tables and discussions, which meticulously parse the disparities between actual and hypothetical growth at an industry-specific level. This granularity enables a nuanced understanding of the driving forces behind the county’s employment change. As illustrated in the Graphic 6, the summary results distill the key components of San Francisco County’s -2.17% employment growth, a figure with broader implications. The dark blue line symbolizes this overall decline, which consists of three critical components:

1. The National Growth component (3.99%),

depicted by the green line, illustrates the positive impact of nationwide employment growth. This aspect represents the employment gains that would have been realized if the county had simply kept pace with the national trend.

2. The Industry Mix component (0.68%), denoted

by the orange dashed line, offers insight into how the county’s unique industry composition influenced its employment change. It showcases the extent to which the mix of industries present in the county impacted its overall growth.

3. The Regional Shift component (-6.84%),

portrayed by the red dashed line, highlights the most pivotal aspect of this analysis. It signifies the extent to which the county’s employment growth underperformed the national average. This component is instrumental in identifying the unique challenges and opportunities within the county’s economic landscape.

ECONOMIC CONDITIONS

Economic Development Summary The survey employs selected statements and questions to gauge the alignment of findings with San Francisco County’s economic landscape. Statements 2 and 4 explore local views on entrepreneurship and economic diversification. If many agree, it suggests support for such policies. Question 8 reveals collective priorities, with a preference for business diversification and entrepreneurship. Question 9 assesses community awareness of “placemaking,” guiding community development efforts. The findings’ representativeness depends on sample size, demographics, and local context. Despite challenges, San Francisco County’s top employers span diverse sectors and are expected to play vital roles. The county website streamlines business services and job opportunities but could benefit from more engaging elements.

New Economy Survey The New Economy Survey employs a multifaceted approach to capture valuable insights from both the general public and local officials. Distinct survey methodologies were tailored to each respondent group to ensure a comprehensive understanding of perspectives and priorities. The State of the State Survey was employed for the general public, encompassing a spectrum of core questions ranging from demographics like age, gender, race, and education. This inclusive approach allowed for a comparative analysis of responses across diverse demographic segments, shedding light on the nuanced viewpoints within the community. In parallel, local officials were engaged using a specialized survey methodology tailored to their roles and expertise, ensuring their unique insights into economic development and policy were effectively captured (Borowy, Wyckoff, & Dworin, 2012). According to the above, four carefully selected statements assess the possible significance of the findings for San Francisco County and their representativeness of this dynamic region. These statements and questions were strategically chosen to evaluate the alignment of survey responses with the economic landscape and development priorities specific to San Francisco County. By delving into these critical aspects, the survey could provide valuable insights into the region’s economic dynamics and the resonance of these findings within the local context. In all cases, the representativeness of the findings for San Francisco County would depend on the survey’s sample size, demographics, and how well it mirrors the county’s population. Additionally, it is crucial to consider the context of the local economy and development goals when interpreting these findings. To make more specific judgments about the significance and representativeness of the results, one would need access to the actual survey data and a detailed analysis of the responses.

Statements 2 and 4

Entrepreneurs and Diversified Economy The respondents’ agreement or disagreement with these statements could offer insights into the local perception of the importance of promoting entrepreneurship and diversifying the economy. Suppose a significant portion of respondents express strong agreement with these statements. In that case, it suggests a desire for policies and initiatives supporting these aspects, which could have implications for local economic development strategies.

Question 8

Future Success This question allows respondents to prioritize different strategies for the region’s economic success. The choice of strategy that ranks the highest among respondents provides an indication of their collective priorities. If “Assisting with Business Diversification” or “Helping Entrepreneurs Start New Businesses” ranks exceptionally high, it suggests a preference for economic diversification and entrepreneurship support strategies.

Question 9

Placemaking The familiarity of respondents with the term “placemaking” provides insight into the local community’s awareness of this concept. If a substantial portion of respondents are unfamiliar with the term, it may indicate a need for education and outreach on placemaking principles. This question’s significance lies in its potential to inform efforts to promote placemaking and community development in the region.

ECONOMIC DEVELOPMENT

Major Employers CPMC Pacific Hts Outpatient

Industry: General Medical and Surgical Hospitals Employment: 1,000-4,999 Employees CPMC Pacific Hts Outpatient, part of the Sutter Health network, plays a critical role in providing healthcare services in the county. As a major hospital facility, it contributes significantly to the local economy through job creation, healthcare services, and research. With the ongoing need for healthcare services, it’s expected to continue growing to meet the demands of the population.

Federal Reserve Bank of San Francisco

Industry: Legislative Bodies Employment: 1,000-4,999 Employees The Federal Reserve Bank of San Francisco is a key institution responsible for monetary policy, banking supervision, and financial services. Its role is crucial to the stability of the regional and national economy. Given its systemic importance, it is expected to remain a significant player in the local economy.

Gourmet Gate

Industry: All Other Specialty Food Retailers Employment: 1,000-4,999 Employees Gourmet Gate, as a specialty food retailer, contributes to the local economy by offering unique food products. While this industry can be influenced by trends in consumer preferences, it is expected to remain a valuable part of the local economy, especially in a diverse and foodconscious city like San Francisco. Source: America’s Labor Market Information System (ALMIS) Employer Database, 2024 1st Edition

SAN FRANCISCO’S ECONOMIC ANALYSIS

Industry: Offices of Certified Public Accountants Employment: 1,000-4,999 Employees Ernst & Young (EY) is a global professional services firm providing audit, tax, advisory, and consulting services. EY’s presence indicates the strong financial sector in San Francisco. The firm is likely to remain a stable and growing contributor to the local economy due to its importance in financial services and consulting.

GitHub Inc

Industry: Custom Computer Programming Services Employment: 1,000-4,999 Employees GitHub, now part of Microsoft, is a major player in the tech industry, providing a platform for developers to collaborate and manage their code. The technology sector in San Francisco is known for its continuous growth, and GitHub’s presence is a testament to this. It is expected to see further growth as technology continues to advance. Overall, these major employers represent diverse industries and make significant contributions to the local economy in San Francisco County. While economic conditions can change over time, they are expected to continue playing important roles in the region, with potential for growth, particularly in the healthcare and technology sectors. However, they may also face challenges, such as healthcare regulations and competitive pressures in the tech industry, which could influence their future trajectories.

City Responsiveness

Image 2. San Francisco County Webpage (Services)

Image 3. San Francisco County Webpage (Departments)

Image 4. San Francisco County Webpage (Office of Economic and Workforce Development) Source Image 2-4: https://sf.gov/

The county website provides easy access to vital services for business development and economic opportunities. It offers a comprehensive section dedicated to business-related services, simplifying tasks like business registration, opening, or closure (City and County of San Francisco, 2023). These accessible services significantly contribute to the region’s economic development by streamlining the administrative processes, thereby presenting an economic development opportunity. Moreover, the website also features a dedicated section for job seekers, making it easier for potential employees to explore available job opportunities in the city (City and County of San Francisco, 2023). This job portal, alongside other services related to event planning and community standards, plays a role in the area’s economic growth. It attracts job seekers, ensuring a skilled and diverse workforce. The presence of the Office of Economic Development and Workforce on the website is a crucial asset for economic development. The Community Economic Development Division (City and County of San Francisco, 2023), sections for Small Business Loans, Small Business Grants, and Entrepreneurship Assistance provide invaluable resources for potential investors and entrepreneurs. However, despite the website’s ease of navigation and well-organized content, it lacks visually appealing elements that could engage and excite users. The absence of photographs or banners showcasing new developments in the city may fail to convey the dynamism and enthusiasm of the region’s economic landscape. This aspect could potentially discourage prospective investors and developers who seek a vibrant and forward-looking business environment. The county website offers essential services and resources for business development, presenting economic opportunities. Nevertheless, the website’s static and uninviting interface may not effectively convey the city’s vibrancy and potential for growth, potentially impacting the impression it leaves on entrepreneurs and potential investors.

ECONOMIC DEVELOPMENT

Recommendations San Francisco County faces challenges and opportunities that shape its future. Challenges include stark earnings disparities based on educational attainment, necessitating efforts to promote educational equity and access. The demand for full-time work raises concerns about work-life balance, potential stress, and burnout. In addition, alarmingly high poverty rates among youth aged 15 to 24 underscore the need for targeted job creation and educational initiatives. Furthermore, a significant challenge is the high cost of housing and living, affecting savings and financial stability. The COVID-19 pandemic has led to a flight of workers due to office work restrictions, with a shift toward remote work in more affordable areas. On top of that, employment growth declined by -2.17%, contrasting with the national trend. However, the county boasts several opportunities. It generally boasts higher median earnings across all educational attainment levels than California and the United States. The presence of workers aged 16 to 64 in full-time, year-round employment speaks to the region’s economic resilience. Additionally, San Francisco County’s appeal as a global tech and innovation center is evident, with a substantial presence of highincome households. Income growth over the years underscores its economic adaptability. Likewise, the diverse industrial composition indicates a robust and adaptable local economy, offering a broad range of job opportunities. Finally, major employers in the county represent diverse industries, significantly contributing to the local economy. San Francisco County faces income inequality, work-life balance issues, youth poverty, and housing affordability concerns. Nevertheless, it possesses higher earnings, a resilient workforce, a diverse economy, and a significant tech presence. Thus, the following recommendations are made to address the challenges considering the cluster of opportunities in the region.

1. Educational Equity and Access

Comprehensive educational reforms and workforce development programs are essential for fostering socioeconomic mobility and reducing income inequality within the county. San Francisco should prioritize initiatives that ensure all residents have equal access to quality education.

2. Work-Life Balance and Job Security The county should focus on supporting a younger and adaptable workforce to address work-life balance concerns and ensure job security in a competitive job market. Programs and policies promoting a healthy work-life balance and job security can improve residents’ overall well-being.

3. Youth Employment Opportunities

The creation of stable employment opportunities for the youth is crucial. San Francisco County should invest in programs and initiatives targeting young job seekers, helping them secure employment and reduce poverty rates.

4. Housing

Affordability Initiatives to improve housing affordability and access are necessary to combat the high cost of living. The county should implement strategies that accommodate the evolving preferences of younger individuals aspiring to own homes, encouraging long-term investment and residency.

5. Economic Diversification

San Francisco County should actively diversify its economy and reduce its dependence on a single sector to address the challenge of workforce flight and employment decline. A diverse economic base offers resilience and long-term stability, helping the county regain its employment growth.

6. Leverage Higher Earnings

The county should leverage its advantage of higher median earnings across all educational attainment levels to attract and retain a skilled workforce. Policies that support this workforce are essential for continued economic growth.

7. Maintain Economic Resilience

To maintain economic resilience, investing in education, workforce development, and policies that support job security is crucial. These factors have contributed to the county’s financial robustness and should be nurtured.

8. Support Innovation

Capitalize on the county’s appeal as a global tech and innovation center by actively supporting innovation and tech-related businesses. These sectors have the potential for significant growth and high-income employment.

9. Diversify the Economy

Continue efforts to diversify the economy further, ensuring stability in the face of economic fluctuations. A balanced local economy that supports underrepresented sectors is essential for overall stability and growth.

10. Enhance Community Engagement

Consider incorporating dynamic and visually engaging elements into the county’s website portal and related services to boost economic vitality. Attracting more visitors and businesses to the area through improved online presence can contribute to economic growth.

11. Engage the Community

Conduct public surveys to understand the population’s vision, needs, and aspirations. Involving the community in decision-making ensures that initiatives align with the expectations and preferences of the residents.

References

Borowy, T., Wyckoff, M., & Dworin, J. (2012). Public Opinion of the New Economy, Placemaking and Economic Development Strategies for Michigan. East Lansing: The Land Policy Institute at Michigan State University. City and County of San Francisco. (2023, October). SF.Gov. Retrieved from https://sf.gov/ ESRI. (2023). ArcGIS Business Analyst. Retrieved from https://bao.arcgis.com/esriBAO/index.html Fox, J. (2023, July 17). The Washington Post. Retrieved from San Francisco Is not Destined to Be the Next Detroit: https://www.washingtonpost.com/business/2023/07/17/san-francisco-isn-t-destined-tobe-the-next-detroit/fc6d15a6-2493-11ee-9201-826e5bb78fa1_story.html Freepik Company. (2023). Flaticon. Retrieved from https://www.flaticon.es/ History Editors. (2018, August 21). History. Retrieved from San Francisco: https://www.history.com/ topics/us-states/san-francisco Lamott, K., Conrad, B., & Cox Hansen, G. (2023, October 19). Britannica. Retrieved from San Francisco California: https://www.britannica.com/place/San-Francisco-California Shift-Share Analysis of Employment Growth. (2022). Retrieved October 2023, from https:// california.reaproject.org/analysis/shift-share/ United States Department of Labor. (2023). U.S. Bureau of Labor Statistics. Retrieved October 2023, from https://data.census.gov/

SAN FRANCISCO’S ECONOMIC ANALYSIS