Los Angeles is not what it seems.
Many an aspiring Hollywood star has discovered that the hard way, of course. Our lessons today will be a lot less painful.
Some people collect stamps. Some people play golf or crochet. I have a somewhat different hobby: Whenever there’s a major sports championship, I like to look at the two cities involved and see what economic lessons we can learn that might apply here in Southwest and Southside. Yesterday, I looked at Cincinnati, whose Bengals will play in Sunday’s Super Bowl. Today I will look at the home of the other team, or at least the name of the city they go by – the Los Angeles Rams as opposed to the Inglewood Rams. (For those who prefer baseball to football, I dealt with Atlanta and Houston before last fall’s World Series.)
Cincinnati, as I pointed out yesterday, is a more natural place for us to study. It’s closer and more similar to us in lots of ways. In 1992, when Cincinnati’s city council took up an ordinance to ban discrimination on the basis of sexual orientation, the ordinance was expanded to cover discrimination against people of Appalachian descent, as well. Cincinnati is essentially our sister city on the other side of the mountains.
Los Angeles, though, is still a play we can learn some lessons from, and you might be surprised what some of them are.
- Advanced manufacturing can be a big economic driver. Danville already knows this. That city is busy reinventing itself as an advanced manufacturing hub – check out the story that Amy Trent had on that in December. In a way, Danville is trying to replicate Los Angeles, just without the palm trees and the movie stars. Here’s something that might blow your mind (it did mine): What’s the biggest manufacturing city in the United States? Detroit? Some other city in the Rust Belt? Nope. Los Angeles. It has more manufacturing workers than any other metro area in the country (Chicago is second). Now, to some extent, this is statistical trickery. As a percentage of the total Los Angeles workforce, manufacturing is a small sector – just under 8% of the workforce. By contrast, it’s 13.9% in Lynchburg and 9.5% in Roanoke, so by that measure the Star City does have some vague similarity to the city of different types of stars. In any case, Los Angeles is so massive, though, that even a small percentage translates into a large number of workers. So what kind of manufacturing does Los Angeles specialize in? Aerospace. The region counts more than 70,000 workers in aerospace and defense-related jobs. There’s a reason why our Mars rovers are operated from Pasadena and the Jet Propulsion Laboratory. All those aerospace jobs would fit the very definition of advanced manufacturing, which brings us to the second point that might surprise you (at least in the context of Los Angeles).
- Community colleges matter. We don’t need to be told this (although it never hurts to underscore the point). Whenever I look at a city, one lesson pops up almost every time: Universities matter. They’re economic engines in their own right and also talent production facilities. That’s why we’re so lucky in this part of the state to have so many colleges and some big ones, at that – Virginia Tech, Radford University and Liberty University being the biggest, of course. When we look at what drives the Los Angeles economy, it’s hard to avoid noticing that it has massive schools such as the University of Southern California and UCLA producing graduates by the thousands upon thousands. USC alone graduated 18,000 students last year – that’s more than the entire city of Bristol. All those graduates surely help power the Los Angeles economy. But you know what else does? El Camino Community College. Here’s another amazing fact: 80% of the world’s aerospace fasteners – the “nuts, bolts, the things that hold one part of a plane to another” – are made in the Los Angeles metro. The community college’s Compton campus is, according to the Federal Reserve, “the only community college program in the country that trains machinists to make aerospace fasteners.” El Camino Community College may not have the national profile that a USC or UCLA does, but it sure seems pretty important.
- We need to figure out what to do about fossil fuel workers who are displaced by the transition to renewable energy. This is obviously a question that Virginia’s coal counties wrestle with every day. It’s also one that Los Angeles is dealing with, too. If you’ve ever been to Los Angeles, one of the odd sights are all the oil wells pumping away. If you haven’t been, take a look at these photos to see how ubiquitous some of the rigs are – and how well-hidden others are. In 2020, Los Angeles produced lots of movies, lots of music, but also 785 million gallons of oil. There are 8,371 oil wells in Los Angeles. In 1930 – before the Mideast became the oil capital that it is – one-quarter of the world’s oil was pumped out of California, with Los Angeles being its oil capital. That’s apparently coming to an end. Oil production is down, anyway, but it will soon be shut down altogether. Last month, the Los Angeles City Council voted to ban new oil and gas wells in the city, and to start phasing out the existing ones.
All this is, of course, in the context of California seeking to be a leader on climate change issues. Shutting down oil wells also means shutting down jobs. One study said some 3,200 jobs could be lost. There’s one big difference between Los Angeles and Appalachia, though. In Appalachia, those displaced coal miners are far from the centers of power and don’t have much political clout. They might have clout in the coal counties, but those votes don’t mean much in the context of state or even national politics. In Los Angeles, though, those oil field workers are right there in LA, and that proximity to power might make a difference. California Gov. Gavin Newsom has proposed $50 million to help “transition” oil workers to other jobs. Imagine if Virginia Democrats, when they passed the Clean Economy Act that mandated a carbon-free electric grid, had done something similar for Virginia’s coal country? Imagine all you want because they didn’t. E&E News (which covers energy and the environment) says that in California, it’s Democrats who have been leading the conversation about how to find other jobs for soon-to-be-displaced oil workers. That’s partly because those oil workers are unionized and apparently still vote Democratic, something coal miners in Appalachia stopped doing. That has created a very different political dynamic. In Virginia, Democrats can ignore coal miners and coal counties because they figure there are no Democratic voters there anyway. But in California, the political calculations are very different because Democrats there need to keep their union voters in the fold – the same fold as their environmental voters. The union is playing hardball, too. E&E News quotes one union leader saying “it would be helpful if the governor and other political leaders made clear that we should not ask individual oil industry workers to subsidize a societywide phaseout of carbon without fair compensation, including wage replacement, health care, pension security and educational funding.”
Here’s the problem, though: Those oil field workers make a lot of money (average salaries of $130,000). To replace their current salaries would cost $470 million a year, one study finds. This creates a fiscal and political dilemma for California Democrats, in which their environmental interests collide with their social equity interests. We don’t know yet how all this will play out in California but perhaps we ought to pay attention. What if Virginia’s coal counties – or coal counties nationally, for that matter – started demanding some kind of recompense in return for the policies that are shutting down coal? Our coal counties actually have a better argument than their oil field counterparts in Los Angeles: Those oil workers in Los Angeles are living in a major metro. They may not immediately have other options, but they’re still in a major metro. Los Angeles wouldn’t much notice if they all wound up unemployed. But in Appalachia, when you shut down coal, you effectively shut down whole communities. (Exhibit A: St. Charles in Lee County.) Unless we, as a society, say it’s OK to depopulate a whole part of the state, then maybe we owe the (former) coal counties something in return for eliminating coal. Who wants to tally up that bill and propose it as an amendment to the state budget?
- The Super Bowl site is what Washington Commanders team owner Daniel Snyder wants to replicate in Northern Virginia. SoFi Stadium isn’t just a stadium, it’s an “unprecedented and unparalleled sports and entertainment destination.” OK, those are the marketing words of the stadium’s own website, so maybe they shouldn’t be taken at face value. But the place is a vast complex of 300 acres. Besides the stadium, there’s a 6,000-seat venue for concerts. Coming next is space for offices, hotels, restaurants – and 314 residential units. This isn’t a stadium, it’s a football city. Snyder envisions something similar in either Loudoun County or Prince William County, just with a dome (presumably retractable?) because Virginia’s weather isn’t quite like California’s, especially this time of year. There is one big difference, though: Rams owner Stan Kroenke paid for SoFi Stadium himself. He’s richer than Midas, so he could afford most of the $5 billion price tag (the NFL floated him a $500 million loan for the rest). Snyder wants Virginia to create a stadium authority and issue bonds, which would get paid through tax revenue generated from the facility. Gov. Glenn Youngkin has endorsed the general concept of Virginia creating a football authority as a way to persuade the team to locate in the state. As I’ve written before, this is unusual (although not unprecedented). Usually it’s cities that are helping pay for stadiums, not states. Cincinnati had a vested interest in paying for the stadium the Bengals play in; it wanted to keep the team in Cincinnati. You can debate whether that’s good public policy or not but Cincinnati dealt with this on its own; it didn’t get the people of Dayton or Toledo or Chillicothe or, heaven forbid, Cleveland involved. So I point out again: There are large parts of Southwest and Southside Virginia that are outside the Washington Commanders market. More radio stations in this part of the state broadcast Carolina Panthers games than Washington games. Parts of far Southwest Virginia fall under the TV market of the Tennessee Titans. This isn’t me talking as a fan, it’s the free market talking. So if our legislators are being asked to vote for this stadium authority to create a football city in Northern Virginia, what’s in it for us? The quid pro quo seems obvious: Give this part of Virginia a cut – a big cut – of the stadium revenue to use for schools or economic development. Otherwise, maybe we should acquaint Mr. Snyder with one of our fine financial institutions where he can apply for a loan? That may not be the lesson he wants us to learn from Los Angeles, but it’s one of my takeaways.