Local Business Leaders Concerned Over Pasadena’s Economic Outlook

While national job and economic numbers in the last quarter of 2016 posted trending increases, local business leaders say they are concerned that Pasadena is lagging in terms of job numbers and are voicing fears over the immediate future of the city’s jobs base and economic outlook.

“I think there are some sectors that are seeing some growth,” Pasadena Chamber of Commerce President and CEO Paul Little said this week.

“But,” he said, “for the most part, I think things are somewhat stagnant right now… and some industries, especially those with minimum wage workers, are seeing shrinking employment numbers.”

Citing data from Chamber of Commerce members, Little said Pasadena’s employment numbers have fallen by 10,000 from all-time highs. He attributed the decline to businesses hurting from both a less robust economy, and from the Pasadena’s recently mandated minimum wage ordinance which hiked wages.

Little said with a weak economy, retail businesses cannot simply raise prices to keep up the profits, because they would start losing customers. So businesses either cut their operating hours, or “try to get more work done by fewer people,” he said.

“There is just not a huge expansion of the economy here, especially with entry level jobs,” Little continued, “and minimum wage jobs are fewer in number as a result of higher costs. We are also seeing companies using fewer employees to do more work, which is something that came out of the recession.”

Little sees some of the answers to the lack of jobs in education, explaining that the Chamber is involved with at least two Pasadena City College trustees who will work directly with the school’s Economic and Workforce Development division.

“We are working with the college,” said Little, “trying to find out what employment needs may be for current employers, or what training needs may be for current employees, and maybe seeing how we could tailor curriculums to the needs of local businesses, and get the word out about opportunities for training for skill enhancement and updating that can be done through PCC.”

Little agreed that 47% of all jobs in California are mid-level jobs, for which jobseekers can acquire training for, at schools like PCC.

“Employees who are looking to advance within an organization but may need additional skills or training will be able to find that as well,” Little continued.

“And the other segments that can benefit are those who have been mid-level, but lost their jobs through downsizing, and the recession, and who need to updates their skills to be able to re-enter the workforce.” Little added.

“There are a lot of minimum wage jobs in Pasadena, the hospitality industry, especially, is very strong here,” Little noted, “but companies have to cut costs. It’s not just minimum wage, but also workers comp and other costs that go along with hiring.”

Current Pasadena Chamber of Commerce President Ishmael Trone agreed with Little’s assessment of the hiring picture with regard to restaurant and hospitality industries, citing last year’s implementation of a new minimum wage ordinance, which could push local minimum wages to $15 an hour by the year 2020.

At the same time, however, Trone sees hopeful economic signs in the housing and increased hotel construction in the city, with a number of hotel projects in various stages of development. Trone cited the Lincoln Property Group’s current development of the Parsons Corporation location near Old Pasadena as potentially instrumental in creating hundreds of local construction jobs.

Trone also saw value in creating a curriculum at PCC to help jobseekers, but felt that such a program would mostly help young people be qualified for new jobs in 2017, as opposed to helping older or returning workforce employees.

Trone and Little agree that a more discerning spending attitude on the part of consumers was very much apparent during this holiday season, and that this hurt local businesses, even as the business community and the City of Pasadena are encouraging people to spend their money and buy more local products and promote the hiring of local workers.

Trone, a tax accountant, said people are now much more careful about spending their money than ever before, and that internet price comparisons and shopping trends are playing a major role.

“I can speak for my clientele, and they’re all watching their wallets right now and they’re watching their savings account,” Trone said. “They’re really concerned about retirement, saving money, and they’re looking at the funds that they’re spending, especially during the holiday season.”

The City is strongly campaigning for a Pasadena First Buy Local program which aims to promote the local economy by identifying local purchasing, contracting and hiring opportunities, and encouraging local companies to bid for City contracts.

For his part, Little said the chamber is actively supporting the Pasadena First Buy Local program, and he sees the City is seriously looking at their own efforts to procure locally and hire local people.

“As a Chamber, we’re talking to developers of large projects about how we can help them find local subcontractors and procure through local member chamber companies,” Little said. “At the same time, we’re also looking at how we can leverage those projects into work experience opportunities for high school students that we work with.”

The two Chamber leaders agree the next few weeks after the new president’s inauguration will be critical in determining the economy’s immediate direction, nationally and ultimately, locally.

“We have to see what our new president has in store for small to mid- to large-size businesses,” Trone said. “They’d want to see some type of tax credits for hiring young people during training periods, and maybe lower corporate taxes for businesses, that will give them more funds in their monthly budgets to hire individuals to work in their companies.”

“I’m certainly willing to be optimistic with the new administration and all the new changes in D.C., but I think we’re going to have to really see what happens, what impacts the initiatives that will come out of the White House and Congress will have on the national economy and what impact it would have locally,” Little said. “Signs are positive, the stock market is up, but then again you look at the holiday spending and that apparently was down, especially for brick-and-mortar folks. Maybe people are just having a wait and see attitude.”