Los Angeles is competing to take its place among the great urban commercial hubs of the world.
By Afshin Molavi | October 13, 2017
“I love America,” the Scottish-American comedian Craig Ferguson once quipped, “and LA is not very far from America. It is only a half hour by plane.” Though jokes about “out-of-touch” Los Angeles abound, the reality of life for most Angelenos isn’t red carpets and Hollywood, but the same as many Americans: Finding work, building lives, and nurturing families.
Since the US election last November, urban centers on the coasts like Los Angeles have been the subject of hand-wringing about “coastal elites” vs “heartland” America. There’s “Trump country”, this narrative suggests, and the rest – and Los Angeles is hardly Trump country. In fact, Hillary Clinton walloped President Donald Trump by a 50% margin in Los Angeles county.
Cue the out-of-touch elite Hollywood jokes. Cue the Beverly Hills 90210 stereotypes.
But not so fast. Trump had laid out a vision of economic renewal in the United States as driven by manufacturing and infrastructure investment. To learn how this might work, the president might just take a closer look at Los Angeles. More than that, the city of angels might offer a road map for, well, how to make America great again.
First, consider this: The Los Angeles-Long Beach-Anaheim metropolitan area is an economic colossus. If it were a country, its $867bn GDP would be the 17th-largest economy in the world, larger than the Netherlands and oil-rich Saudi Arabia, and roughly on par with Turkey. Yes, the entertainment industry plays a role, but it’s a supporting one.
The lead actor in this Los Angeles success story is an unknown, unsung hero celebrated by Trump (as well as former candidate Clinton): Infrastructure. This infrastructure supports Los Angeles’ main employment driver: International trade.
Let’s start with the adjoining ports of Los Angeles and Long Beach. Some 40% of all containerized goods entering the US pass through these ports. These two ports are Asia’s consumer gateway to America. They’re respectively number one and two in terms of busiest US ports, and, combined, they dwarf the third-busiest gateway: The port authority of New York and Newark.
There’s a good chance that the shirt you bought at H&M, those sneakers on your feet, or that desk in your office first landed in Los Angeles or Long Beach. One in 13 jobs in Los Angeles – 144,000 of them – are related to the port of Los Angeles. Another 1.6m jobs nationwide are supported by the port’s activities.
Container ships from East Asia that call on Los Angeles often make the port of Oakland their next stop, where they load up on US agricultural goods before they head back to Asia. Container shipping lines are like fixed bus or train routes. The closer you are to those routes, the more connected you are – and in today’s global economy, connectivity is a vital currency.
Just ask Singapore, Hong Kong, or Dubai – cities that have thrived by building the infrastructure of connectivity, especially massive container terminal ports and airport hubs that feed global traffic. In fact, it’s hardly a stretch to say that the future lies with countries and cities that are more connected, not the ones that are more protected. I see this when I travel in emerging markets, and I also see it in US cities like Los Angeles.
The Port of Los Angeles supports the city’s manufacturing prowess. Yes, the city known for Hollywood is actually the largest manufacturing center in the US. From aerospace to electronic goods, furniture to plastics, Los Angeles is a manufacturing powerhouse, feeding into global supply chains and exporting around the world.
On a recent visit to Los Angeles, as I drove the 105 interstate from Los Angeles International Airport, better known as LAX, toward the city’s new Chicago-style downtown area (that’s right, LA now has a legitimate, though still rising, downtown), I spotted some of the big names of manufacturing lining the highways: Tesla, Raytheon, Boeing. But look closer, and you’ll see a swarm of smaller companies feeding into the local manufacturing supply chain.
LAX is also a major force in the southern California infrastructure-economic-trade story. It’s the fourth-busiest airport in the world and among the top five in air cargo tonnage in the US. If you’re reading this article on an iPhone, chances are that your phone first landed in LAX aboard a Cathay Pacific flight from Hong Kong.
And, LAX is in the midst of a dizzying $14bn expansion plan to unclog congestion in one of the world’s busiest and fastest-growing airports. Airlines are following the city money with their own money. The “big three” US carriers – Delta, United, and American – are all investing heavily in terminal expansions at LAX.
Los Angeles is often seen as a trend-setter, but in its economic strategy, it is a trend-follower. The city has invested heavily in the infrastructure of connectivity, a winning formula from ancient civilizations to today. Cities like Los Angeles are why the US ranks number one worldwide on the global connectivity index, and why the US economy remains so large and powerful.
A McKinsey study found that 600 cities account for about 60% of global GDP. This city-heavy global economy is even heavier in the US. In fact, America’s top 20 metropolitan areas account for more than half of the country’s GDP.
They also tended to vote against Trump.
Even in states where Trump won fairly handily, like Texas, he lost in the most globally and regionally connected county – Dallas County. Dallas, the city famed for its oil industry, is also one of the great “aerotropolis” cities of the world, an economy fed and fueled by a world-class airport. That airport attracts businesses, investment, and trade – fueling local economies and creating jobs.
While Trump tapped into a justified vein of frustration outside America’s thriving cities, in post-industrial centers facing prolonged recessions and stagnant wages, the best way to help those towns would be through greater connectivity across America, and the world.
America’s future is, in many ways, tied to the future of its cities. As I strolled downtown Los Angeles on a recent visit, peering up at the newly minted skyscrapers, I saw a city scrapping and competing to take its place among the great urban commercial hubs of the world.
That’s, well, pretty great if you ask me.
A version of this article first appeared in New America Weekly.