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The Catch-22 of San Diego's Tourism Economy

San Diego County has seen its most significant job growth since the recession in the last two years, but a big part of that is from part-time or low-paying roles. SANDAG’s chief economist says “we’re a little bit of a victim of our own success.”

One fact is indisputable: San Diego’s job market is on the upswing.

San Diego County has added tens of thousands of new jobs since the recession ended in mid-2009.  But some of the new jobs don’t match those that were lost several years ago. Some may be part-time gigs. Others are on the lower end of the pay scale.

That reality has been central to a months-long debate over whether to hike San Diego’s minimum wage to $11.50 an hour over three years.

Backers of the increase – which the City Council again pushed forward Monday following Mayor Kevin Faulconer’s veto – are adamant that city workers deserve salaries that help them buy groceries and cover expenses that have increased with the cost of living.

Some business leaders, including a coalition that has pledged to refer the hike to the ballot, say that forcing the increase could stymie continued job growth and even potentially imperil small businesses operating on low profit margins. Restaurants and retail store owners are among those particularly concerned.

But San Diego’s continued success as a tourism powerhouse and the new and relatively low-paying jobs associated with that industry helped ratchet up the push for the pay hike some business groups are now fighting.

Since the final quarter of 2009, San Diego has added almost 15,000 accommodation and food service jobs, many of which are tethered to the region’s tourism economy. At the end of 2013, the average weekly wage for those jobs was just $390 or about $20,000 annually, according to the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages.

One other large boost came from retail jobs. The region gained nearly 12,000 new jobs in that category from 2009 to 2013. They come with a slightly higher average salary of about $31,000 a year.

Earlier this month, the Los Angeles Times reported that similar growth in lower-wage jobs is playing out statewide. California is growing jobs at a faster rate than the rest of the U.S. but low-wage jobs are growing faster than mid-wage ones.

A mid-wage job in California, the Times reported, is one with an hourly rate between $15 and $30 an hour.

Marney Cox, chief economist for the San Diego Association of Governments, said the increased tourism that’s helped San Diego County recover from the recession more quickly than inland regions has come with a side effect.

“We’re a little bit of a victim of our own success because even if those hotels are filled and all the convention space is used up, the structure of the industry is that 75 percent of the jobs in the industry pay less than the median wage,” Cox said.

That’s not to say San Diego County isn’t seeing an uptick in some higher-paying jobs.

Management consulting firms, which help other businesses work more efficiently, have risen even more dramatically. The county has seen more than 2,400 new companies in that category since late 2009. Some of them may be led by a sole proprietor but new jobs in this category totaled nearly 12,000 in the last four years.

Some of the more lucrative new jobs are for highly skilled workers.

For example, since the end of 2009, the region has added more than 150 new companies and nearly 8,000 jobs tied to scientific research and development, a category that includes engineering and biotechnology jobs.

The city’s economic development strategy acknowledges the uneven job growth patterns that have played out since the recession.

The regional economy is increasingly seeing job growth attached to industries that either pay a lot or relatively little.

The city plan approved this June emphasizes both the region’s burgeoning status as an hourglass economy and the need to foster middle-class job growth in key sectors, including manufacturing and trade.

This is part of our quest digging into the difficulties – real or perceived – of doing business in San Diego. Check out the previous story in our series, Ranking San Diego’s Business Climate: A Selective Science, and the next, Stop Confusing Small Businesses and Startups.

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