1. Research Brief: 10 Things to Know About San Francisco’s Economy and Employers A publication to inform San Francisco’s workforce and economic development community DRAFT: January 9, 2003 Workforce Investment San Francisco Board This Research Brief was compiled to provide members of San Francisco’s workforce and economic development community with a basic orientation to the size, nature, structure, and historical evolution of San Francisco’s economy in one easy-to-read document. This basic orientation will serve as a benchmark for future research on how San Francisco’s economy is likely to change. Your comments and feedback on this draft version are very welcomed. Please direct them to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us. Preliminary Version Please do not cite without author’s permission. Final version with full documentation will be published in February.

2. Draft Version 1/9/03 - Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us 1 10 Things to Know About San Francisco’s Economy and Employers 1. With approximately 600,000 jobs and 40,000 businesses, the City and County of San Francisco is an important component of the Bay Area regional economy. 2. San Francisco is highly integrated with this regional economy – nearly half of its workforce commutes in from surrounding communities while 20% of its employed residents work outside the city. 3. Over the last 30 years, San Francisco’s employment has typically been slower growing than surrounding Bay Area counties, even during the boom of the late 1990’s. The maturity of the city’s economic base or its constrained physical space likely explain this slow growth. 4. The city’s economy is particularly dependent on factors which drive its major export industry clusters. Tourism, Corporate Deal-Making, Communications/Media, and Government Administration bring income to the city’s residents and businesses from the outside, enabling spending on resident-consumed goods and services and fueling local employment growth. 5. The city’s economy is diversified across many industries, but is particularly concentrated in industries which comprise its export clusters. 6. The city’s industrial structure has shifted considerably over the last 30 years with the exceptional growth of the city’s Service industry. Government and Finance employment has been stable for quite a while, while Trade has grown steadily with the overall economy. Transport, Communications, Utilities, and Construction have recently rebounded, while Manufacturing continues to decline. 7. The city’s occupational structure is somewhat bifurcated, with many high-wage professional/technical and low-wage service jobs, but relatively fewer moderately-paid blue-collar jobs compared to the rest of the Bay Area. 8. While most San Francisco businesses are small, large companies account for a greater share of employment. The typical San Francisco worker is part of a 100 to 250-person firm. 9. The city’s largest employers span a wide range of industries. Government and educational organizations such as the City and County, UCSF and SFUSD and Fortune 500 headquarters such as Charles Schwab, Wells Fargo, PG&E, and Pacific Bell all employ a significant number of San Francisco workers. 10. Spatially, employment is concentrated in the office-heavy northeast districts of the city. Other districts have relatively less economic activity and employment is more concentrated in resident-serving retail and cultural/educational/health organizations. Most industrial activity is concentrated in the city’s eastern neighborhoods.

3. Draft Version 1/9/03 - Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us 2 1. With approximately 600,000 jobs and 40,000 businesses, San Francisco is an important component of the Bay Area regional economy. 15 million jobs 1 million businesses California 3.4 million jobs (23% of CA) 9-County Bay Area** 576,000 jobs (17% of B.A.) (4% of CA) 42,500 businesses (19% of B.A.) (4% of CA) City and County of San Francisco Employment* and Number of Businesses 3 rd Quarter, 2001 * Excludes the following types of workers:…… ** Includes Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano and Sonoma counties SOURCE: California Employment Development Department, Size of Business report 227,000 businesses (21% of CA)

4. Draft Version 1/9/03 - Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us 3 To SF jobs via Golden Gate 7% To SF jobs via Bay Bridge 24% To SF jobs via the peninsula 15% To SF jobs from within the city* 54% 2. San Francisco is highly integrated with this regional economy – nearly half of the city’s workforce commutes in from surrounding communities, while 20% of its employed residents work outside the city. Commuters to San Francisco Jobs % of total jobs in San Francisco County, 2000 projection * An estimated 20% of all employed city residents commute to jobs outside San Francisco. These individuals are not included in this analysis. SOURCE: Sims’ (2000) analysis of commute and employment data based on 1998 projections from the Association of Bay Area Governments and the Metropolitan Transportation Commission. 46% of San Francisco’s work force commutes into the city 20% of employed city residents commute out

5. Draft Version 1/9/03 - Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us 4 3. Over the last 30 years, San Francisco’s employment has typically been slower growing than surrounding Bay Area counties, even during the boom of the late 1990’s. The maturity of the city’s economic base or its constrained physical space likely explain this slow growth. Average Annual Employment* 1972-2001, thousands *Jobs are classified by place of work, regardless of where the employee lives. Does not include agricultural workers, the self employed, unpaid family workers, and private household employees. Multiple job holders may be counted twice. SOURCE: BLS Current Employment Statistics program SF, SM, Marin East Bay Santa Clara Napa & Solano Sonoma 1970’s 1980’s Early 90’s Late 90’s SF, SM, Marin East Bay Sonoma Santa Clara Napa & Solano Employment Growth Annual growth rate 1972 1981 199019952001 1972-2001 1995-2001

6. Draft Version 1/9/03 - Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us 5 Retail Health Care Education Local Gov’t Local Utilities Wholesale Construction Personal Services 4. The city’s economy is particularly dependent on factors which drive its major export industry clusters. Tourism, Corporate Deal-Making, Communications/Media, and Government Administration bring income to the city’s residents and businesses from the outside, enabling spending on resident- consumed goods and services and fueling local employment growth. * Many industries, retail for example, sell goods or services to both residents and non-residents and thus are both export and resident-serving industries. SOURCE: Sims, Kent 2000. “San Francisco Economy – Implications for Public Policy,” SPUR. Tourism Hospitality Transportation Entertainment Retail & Restaurants Deal- Making Finance, Insurance Real Estate Accounting, Consulting Legal Services Comm & Media Phone, Broadcast, Cable, Internet providers Media Content Gov’t Admin Federal & State Executive Offices Judicial Offices Regulatory Offices …determine demand for and employment in San Francisco’s export industry clusters*… …which pays incomes and supports industries that primarily serve city residents and local businesses. External business drivers… Global tourism Business/convention travel Health of stock market IPO/M&A activity Business spending on IT - software/services - website dev. - internet services Business spending on advertising Federal/state tax revenue

7. Draft Version 1/9/03 - Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us 6 5. The city’s economy is diversified across many industries, but is particularly concentrated in industries which comprise its export clusters. Retail Trade Finance, Insure, Real Estate Business Services Federal and State Gov’t Local Government Manufacturing Engineering and Management Health Services Communications and Utilities Wholesale Trade Construction & Mining Hotels and Lodging Transportation Private Education n/a Share of Total Employment, Annual Average, 2001 * Smaller categories include social services, amusement services, auto repair, motion pictures, personal services, legal services, museums, membership organizations, and agricultural services SOURCE: California Employment Development Department, US Bureau of Labor Statistics Current Employment Survey United StatesBay Area San Francisco Higher share of employment vs B.A. and U.S.

8. Draft Version 1/9/03 - Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us 7 6. The city’s industrial structure has shifted considerably over the last 30 years with the exceptional growth of the city’s Service industry. Government and Finance employment has been stable for quite a while, while Trade has grown steadily with the overall economy. Transport, Communications, Utilities, and Construction have recently rebounded, while Manufacturing continues to decline. Average Annual Employment* San Francisco, San Mateo, Marin Counties, thousands *Does not include agricultural workers, the self employed, unpaid family workers, and private household employees. Multiple job holders may be counted twice. SOURCE: BLS Current Employment Statistics program Government has been stable Services has boomed, primarily due to business services Transp, Comm, Utilities has rebounded Manufacturing has steadily declined Construction has recently boomed Trade has steadily grown with overall economy Finance has remained stable since 1980

9. Draft Version 1/9/03 - Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us 8 1.0% 7.0% 5.9% 3.8% 3.5% 1.4% 4.7% 1.3% 4.7% 4.8% 2.1% 3.7% 7. The city’s occupational structure is somewhat bifurcated, with many high-wage professional/technical and low-wage service jobs, but relatively fewer moderately-paid blue-collar jobs compared to the rest of the Bay Area. Legal Occupations Management Computers and math Arch. and engineering Healthcare practitioners Business operations Life, physical, social scientists Artists, entertainers, designers Education and training Construction and extraction Protective service Installation, maintenance Share of Total Employment, 2000 *Occupation data not available at county level Note: Broad occupational categories are listed in descending order by average wage. SOURCE: US Bureau of Labor Statistics Occupational Employment Statistics Survey Social service Sales Office admin and support Personal care services Transport, material moving Production occupations Healthcare support Building cleaning Food prep and service SF, Marin, San Mateo* Bay Area Generally concentrated in SF Concentrated outside SF Average wage: $19-25/hr Average wage: > $25/hr Average wage: $16-19/hr Average wage: $13-15/hr Average wage: < $13/hr Concentrated in SF Concentrated outside SF Concen- trated in SF 1.5% 7.3% 6.5% 2.0% 3.0% 1.3% 6.0% 2.2% 3.8% 4.4% 1.9% 3.3% 1.0% 11.2% 19.2% 5.6% 2.1% 4.4% 1.3% 3.3% 8.6% 0.8% 10.0% 17.1% 6.0% 1.8% 8.2% 1.5% 3.0% 7.4%

10. Draft Version 1/9/03 - Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us 9 8. While most San Francisco businesses are very small, large companies account for a greater share of employment. The typical San Francisco worker is part of a 100 to 250-person firm. 1000 + 500 - 999 250 - 499 100-249 50 - 99 10 - 19 20 - 49 Less than 10 80% Fraction of Number of Businesses Total = 42,500 Businesses Fraction of Employment Total = 576,000 Jobs Fraction of Businesses and Employment* by Size of Business San Francisco County, 3 rd Quarter, 2001 Number of Employees Median SF worker Median SF business * Excludes the following types of workers:…… SOURCE: California Employment Development Department, Size of Business report <1%

11. Draft Version 1/9/03 - Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us 10 9. The city’s largest employers span a wide range of industries. Government organizations such as the City and County, UCSF and SFUSD and Fortune 500 headquarters such as Charles Schwab, Wells Fargo, PG&E, and Pacific Bell all employ a significant number of San Francisco workers. Number of Employees in San Francisco County 2000 NOTE: Reliable employment data fro the US Federal Government, the State of California, Kaiser Foundation, Bank of America, St. Luke’s Hospital, City College of SF, and the Federal Reserve Bank were not available, but these organizations are known to be among the largest employers in San Francisco. SOURCE: San Francisco Business Times City and County of SF (local government) UCSF (health services) SF Unified School Dist. (K-12 education) Charles Schwab & Co. (financial services) Wells Fargo & Co. (financial services) AT&T (telecommunications) US Postal Service (mail delivery) PG & E Corp (energy) Pacific Bell/SBC (telecommunications) Cal Pacific Med Center (health care) ABM Industries (facility services) Gap Inc. (apparel retailer) Macy’s West (retailer) Safeway Inc. (supermarkets) Providian Financial. (financial services) Levi Strauss & Co. (apparel manufacturing) Bechtel Corp (engineering, const.) SF Chronicle (newspaper) SF VA Medical Center (health care)

12. Draft Version 1/9/03 - Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us 11 * Business land uses representing at least one quarter of a district’s employment are identified on the map ** Includes schools, hospitals, clinics, social service facilities, museums, movie theaters, and other recreational facilities SOURCE: San Francisco Planning Department, “Commerce and Industry Inventory 2001” Office Cultural/Educ/Inst** Retail Industrial Hotel Primary Business Land Uses* 37% 23% 17% 20% 3% Commerce and Industry District Boundaries ZIP Code Boundaries Share of Total SF Employment Fraction of San Francisco Employment by Business District and Land Use San Francisco County, 2000 10. Spatially, employment is concentrated in the office-heavy northeast districts of the city. Other districts have relatively less economic activity and employment is more concentrated in resident- serving retail and cultural/educational/health organizations. Most industrial activity is concentrated in the city’s eastern neighborhoods. SOMA: 21% Office Industrial Financial: 30% Office South West: 5% Retail Cult/Educ/Inst North West: 3% Cult/Educ/Inst Retail Bay View: 3% Industrial Mission: 2% Retail Industrial North Central: 8% Cult/Educ/Inst Van Ness: 3% Cult/Educ/Inst Retail North Beach: 3% Retail Civic Center: 6% Cult/Educ/Inst

13. Draft Version 1/9/03 - Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us 12 Other topics to include in this Research Brief 1.Personal income Level Growth Inequality 2.Education levels 3.????? – please provide any suggestions