I recently spent a week in the LA metropolitan area, and as I traveled around the city, it occurred to me that I couldn’t see much of anything that amounted to any sort of enterprise that involved actually producing anything. Retail and residential, that’s about it.
I mentioned this to a friend I was talking to on the phone, and asked him what in the world this city was running on. His reply was memorable. “Debt.”
He was fundamentally right. And it can’t go on forever.
If you include the surrounding areas of Los Angeles, then you have a diverse economy with lots of industries.
Hollywood is just 8 miles from downtown LA and is of course the film, entertainment and arts capital of the world (television, motion pictures, video games, recorded music).
The contiguous ports of Los Angeles and Long Beach together comprise the fifth-busiest port in the world
The city is home to six Fortune 500 companies. They are energy company Occidental Petroleum, healthcare provider Health Net, metals distributor Reliance Steel & Aluminum, engineering firm AECOM, real estate group CBRE Group and builder Tutor Perini.
Other companies headquartered in Los Angeles include California Pizza Kitchen, Capital Group, Capstone Turbine, The Cheesecake Factory, Cathay Bank, City National Bank, The Coffee Bean & Tea Leaf, DeviantArt, Far East National Bank, Farmers Insurance Group, Fox Entertainment Group, Gibson, Dunn & Crutcher, Guess?, Hanmi Bank, Herbalife, J2 Global Communications, The Jim Henson Company, KB Home, Korn/Ferry, Latham & Watkins, Mercury Insurance Group, Oaktree Capital Management, O’Melveny & Myers, Pabst Brewing Company, Paul, Hastings, Janofsky & Walker, Premier America, Premiere Radio Networks, Rentech, Sunkist, The TCW Group, Tokyopop, Triton Media Group, United Online, and VCA Antech.
The metropolitan area is home to the headquarters of many companies who moved outside of the city of Los Angeles to escape its high taxes and high crime rate while keeping the benefits of remaining in close proximity. For example, Los Angeles charges a gross receipts tax based on a percentage of business revenue, while many neighboring cities charge only small flat fees.
The University of Southern California (USC) is the city’s largest private sector employer and contributes $4 billion annually to the local economy
According to the city’s 2010 Comprehensive Annual Financial Report, the top ten employers in the city as of 2009 are, in descending order, the City of Los Angeles, the County of Los Angeles, University of California, Los Angeles, University of Southern California, Cedars-Sinai Medical Center, Kaiser Permanente, Fox Entertainment Group, Farmers Insurance Group, TeamOne,and Aerospace and Defense Company, Northrop Grumman