While California and San Diego specifically have performed relatively well in job creation since the (slow) U.S. recovery began in 2009, important questions remain about the quality of those jobs.

Were these good jobs, in high-paying industry sectors, with future growth potential? Or jobs in low-wage sectors, like personal services, that pay barely above minimum wage and don’t add much to the state’s economic base?

The short answer is that California and San Diego have managed to generate quality jobs – with some caveats. Our neighbors in Los Angeles, however, are struggling.

The best and most comparable data across regions that speak to job quality is only available up to 2012. That’s imperfect, but still helpful. The data is from the Federal Department of Commerce’s Bureau of Economic Analysis (BEA). Instead of average wages per job, the BEA uses average earnings, which would include the income of all those sole proprietors in the one-person firms that comprise the largest category in the business data.

Let’s look at two main features of quality jobs: the growth in average earnings across all jobs since 2009, and growth in export or traded-sector jobs, which bring in new money by selling products and services abroad or to other parts of the country. The cities in these chart reflect data for the counties where they’re located.

Source: Federal Department of Commerce, Bureau of Economic Analysis (BEA)

Texas and Houston are off the charts, so to speak. The state’s average earnings (adjusted for inflation) grew 10.2 percent from 2009 to 2012, more than 3 percent a year. Houston, whose average earnings grew an astounding 14.6 percent, is obviously the engine of Texas growth.

How good are these numbers? Put it this way: Real average earnings growth above 3 percent a year mirrors the roaring post-WWII period in the American economy from about 1946 to 1973, when the economic pie was growing rapidly.

We can’t tell yet whether the benefits are broad-based — I would guess not — but the size of the Texas pie after three years of recovery is impressive.

While tax policy, limits on unionization and a generally “business-friendly” environment have probably contributed to Texas’ performance, it’s likely that the oil boom, driven by fracking and other new extraction technologies, is the main factor.  Low housing prices and lots of buildable land help, too.

At the complete other end of the spectrum is Los Angeles, with average earnings growth of 1.4 percent, barely keeping pace with inflation.

San Diego and California’s average earnings grew about 5 percent from 2009 to 2012, or about 1.5 percent annually. That’s a number mainstream economists consider a good target for U.S. economic growth in the long run; though it’s not that great for the first few years of a recovery.

Another way to look at the quality of jobs is to focus on growth in two of the prime export sectors of the economy: manufacturing; and professional, scientific and technical services.

Aerospace and computer chip production are classic examples of manufacturing in California. The latter category would include things like legal services, accounting, consulting and research.

These are the quintessential high-wage, high-value-added jobs, the brass ring for every public economic development program.

Source: Federal Department of Commerce, Bureau of Economic Analysis (BEA)

The yellow lines represent growth in manufacturing from 2009-2012; the blue lines track the other sector’s growth. San Diego and California kept losing manufacturing jobs in the first few years of the recovery. The loss was not calamitous, but that description might apply to L.A., where manufacturing jobs fell by 6 percent during the same period.

L.A. redeems itself in the growth of professional, scientific and technical jobs. The city is close to the lead in the chart above, with San Diego and the state not far behind. All three are close to Texas’s strong number. I can only hope this isn’t a data fluke.

One important question remains: Why has California (especially L.A.) done so poorly in manufacturing, and so well in professional, etc., job growth? I can’t fully answer that now, but these facts might get us a step closer.

For California as a whole, manufacturing job losses after 2009 were concentrated in computer and electronic products, semi conductors and instruments, totaling over 20,000. Another 6,000 were lost in manufacturing related to printing, i.e., activities supporting newspapers, books, bookbinding and data imaging. On the whole, we see data plainly laying out the evolving realities of industries in our region.

Using good data to balance out the screaming headlines and business-focused anecdotes is an important step in deciding what we can do to improve our local economy.

Irv Lefberg was a senior economist dealing with labor economics and public finance for 30 years in Washington state. He lives in Escondido. Lefberg’s commentary has been edited for style and clarity. See anything in there we should fact check? Tell us what to check out here.

Catherine Green

Catherine Green was formerly the deputy editor at Voice of San Diego. She handled daily operations while helping to plan new long-term projects.

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