5/16 Blog Topic: The Occupations We Have May Not be the Occupations We Want
May 16, 2019
In the field of economics there are a lot of funny terms. Remember just a short while ago we were all talking about “quantitative easing?” There is another funny term, “Location Quotient” or “LQ” that I think Marin residents should know about.
LQ is basically a way to compare a region’s economy to the nation by measuring the concentration of things like occupations, industry presence or even demographics. LQ is measured with a number (a ratio actually) against the benchmark of “1” for the national average. An LQ measurement above 1 suggests a higher concentration of something, say architects, compared to other regions. The assumption is that an LQ measure greater than 1 means that occupation, or industry has a relatively more significant role in a region. Take the city of Detroit; the automobile manufacturing industry has a LQ over 10 (!) demonstrating its huge importance to that city’s economy and its residents relative to other places in the U.S.
The table below shows the LQ for ‘occupations’ in Marin. This means that for the sectors presented, there is either a high concentration or low concentration of those jobs in Marin compared to other regions. I chose “occupations” because it is important to understand the jobs we have here in Marin compared to the nation.
Here are some of the interesting stories about the LQ measurements above and some related data:
- The highest LQ score goes to occupations in the field of Arts, Design, Entertainment, Sports and Media. That would please most residents. However, that occupation also has one of the lowest median hourly wages at $21.81-just above the level of a “livable wage” for Marin.
- The lowest LQ score, excluding the military, is in Farming, Fishing and Forestry which also has the second to lowest median hourly income at $14.71. Residents should be concerned that there are so few occupations in the ag sector, and they pay so low; the locally grown produce, meats and dairy we have come to love is at risk in the near future.
- While “Personal Care and Service” has a strong LQ (1.64) and has experienced the most job growth of any of the sectors (+21% in 5 years), it has the second to worst median hourly income ($13.36), far below the “livable wage” number.
- Two sectors that one would assume to have a high concentration in the tech-rich Bay Area are “Computer and Mathematical” and “Healthcare Practitioners and Technical”. However, both have LQ’s less than 1 in Marin. Unfortunately, these are also two occupations that are among the highest median hourly wages (>$42/hour). That suggests Marin is performing lower than the nation in terms of the concentration of these jobs. To me that means we have unfulfilled potential to increase the number of companies and jobs in those high paying sectors.
Overall, we can observe 11 sectors that have LQ’s greater than 1 but only 6 of them pay higher than a “livable wage” by Marin standards. So as far as occupation LQ’s telling a story about the uniqueness of the Marin economy, one might say we have a higher concentration of lower paying jobs and that occupations in two of the best paying sectors have a lower relative concentration in Marin than the national average. That should be perceived as a problem; the occupations we have aren’t necessarily the occupations we need given the high cost of living and our assets, which includes a highly educated population. Strictly going by occupation LQ, Marin has work to do.
Mike Blakeley, CEO
Marin Economic Forum
Tags: blog
