Villaraigosa blamed the high unemployment rate on the downtick of three of the city’s main industries: construction, imports and film. “These are three key areas where you see a drop and a big reason why we have an unemployment rate of 14.5 percent,” Villaraigosa said.
The unemployment rate for construction alone stands at about 35 percent, coming off of a 5-year construction boom in the downtown L.A. area that has since collapsed. Imports are down as well, which for a city that serves as the gateway for 44 percent of all seaborne goods in the United States has a large impact on jobs.
In an effort to attract more small businesses to the Los Angeles area, which will create more jobs, Villaraigosa has declared a business tax holiday for any business that wants to move to LA.
“We’re focused on bringing in business, supporting particularly small business so we can bring in the revenue so that we can get to better times,” Villaraigosa said. The tax break stipulates that new businesses will not have to pay gross receipt tax for three years.
Villaraigosa has stood by the president’s $50 billion transportation and infrastructure initiative, despite criticism that the stimulus is not working or creating jobs despite aggressive spending on part of the federal government.
“Not all spending is equal,” Villaraigosa said in response to this criticism. “When you spend money on building our transportation system, expanding our highway system, repairing our bridges — this is important. It’s important to the economy. $50 billion dollars is a drop in the bucket.”
Infrastructure Key to Recovery
According to Villaraigosa, infrastructure is key to economic recovery — a realization that he said has taken the United States longer than the rest of the world to come to. He noted that Europe, China, and even developing world countries invest more on infrastructure than the United States does.