Southern California’s Foreign-Owned Businesses Jump Above 10,000, Employ 428,000
Wednesday, May 23, 2018
Southern California is home to 10,378 foreign-owned businesses that employ 427,954 workers and generate nearly $27 billion in annual wages, according to a report from World Trade Center Los Angeles.
“The biggest thing this report shows is that international trade is creating jobs,” said Stephen Cheung, president of the trade center, a wholly-owned subsidiary of the Los Angeles County Economic Development Corp. “We might see some fluctuation up and down, but the fact that this region is able to attract more than 10,000 of these firms … that’s a huge story. Where else in the nation would you have a region with the power to attract that many businesses?”
The region’s foreign-owned enterprises grew by nearly 1,300, or 4.5 percent, from 2015, the report said. The job count associated with those businesses was up 16.8 percent with a slight decline noted in 2017.
The lion’s share of FOEs — more than 2,400 Southland businesses — are involved in retail trade with 63 new firms joining that category in 2017, the report said. That’s followed by wholesale trade (1,704) which added nine additional businesses last year; manufacturing (1,588), which added 107; professional and business services (1,294), which added 62; and financial activities (1,190), which added 22.
Japan has the largest number of FOEs in Southern California with 2,541 businesses that employ 85,874 workers. That accounts for more than a fifth of the region’s FOE employment and fuels more than $5.4 billion in annual wages.
The United Kingdom ranks second, with 1,167 firms employing 63,739 workers with an estimated $3.6 billion in wages. Canada is third with 872 FOEs that employ 40,819 people who earn nearly $2.8 billion in annual wages.
France, Germany, Switzerland and Ireland are next on the list and China is in eighth place with 467 business, 15,968 employees and $990 million in wages. Mexico ranked 14th with 260 FOEs and 6,704 workers. Annual wages for Mexican FOEs were not included in the report.
Canadian-owned businesses saw the biggest job gains among the top three FOEs, rising 55.6 percent to 40,819 employees in 2017 from 26,230 in 2015.
Japan and the U.K. also added jobs but not nearly as many. The U.K.’s local labor force rose 16.1 percent to 63,739 and Japan jumped 8.1 percent to 85,874.
On a regional level, Los Angeles and Orange counties both shed FOE jobs last year. L.A. County lost 11,701 jobs, although it added 230 new businesses, bringing its total number of FOEs to 4,912. Orange County lost 4,260 FOE jobs but added 67 new foreign-owned companies, boosting its overall count to 2,065.
San Bernardino County added 1,196 jobs and seven more FOEs in 2017, bringing its total to 797. Riverside County added 665 jobs and 24 new FOEs, which increased it total to 585.
Chung attributes the job losses to increased efficiencies in the workplace and the natural ebb and flow of business operations. He stressed that local foreign-owned businesses need to be viewed through a longer lens, rather than year-over-year.
“Companies will have mergers, acquisitions and consolidations,” he said. “You don’t look at the hundreds or thousands of jobs, but at the hundreds of thousands of jobs.”
Cheung says international trade is the fuel that’s powering growth in local foreign-owned companies, and there’s plenty of trade happening at Southern California’s twin ports.
In 1990, for example, 2.1 million TEUs, or 20-foot-equivalent units of cargo, moved through the Port of Los Angeles. By 2000 that had risen to nearly 5 million TEUs and last year it topped out at 9.3 million.
“Last year we moved $284 billion worth of cargo,” port spokesman Phillip Sanfield said. “We estimate that over 1 million jobs in the five-county Southern California region are tied to the ports, whether they are direct jobs like shipping, or indirect jobs at local restaurants and other places.”
The Port of Long Beach saw a similar uptick, rising from 2.8 million TEUs in 1995 to 7.5 million last year.
Sanfield wasn’t surprised to learn that there are more than 10,000 foreign-owned businesses in the region.
“International trade is really critical to the economic engine of Southern California,” he said. “Most of our shipping lines and terminal operators have foreign-based ownership.”
Chung said Southern California’s role in global trade and foreign-owned businesses can’t be underestimated.
“We go to international trade shows and we’ll see lots of friends and partners from other states like Utah or Indiana with maps of the hundreds of FEO locations in their areas,” he said. “But we have 4,900 in Los Angeles County alone. We’re in a whole different category.”
Category: Breaking News, Business News