in the tourism-related industries, the biggest component by far is restaurants and bars. that has been a strong growth sector in san francisco for a number of years. we also have a lot of growth in museums and other industries, accommodations and performing arts, they are not seeing the same level of growth as others. let's go on to local-serving because i think there is quite a story here. the two biggest segments are retail trade in san francisco and health-care. i would not worry much about the low concentration of health- care because we are not covering public's emptor health-care -- public-sector health care. but the fact that we have only

70% of the retail jobs at a typical city of our size has is a concern. manufacturing has lost a significant amount of employment in san francisco since 2004. wholesale trade, transportation, construction, a number of industries have been fairly poorly. only professional services -- i'm sorry, personal services like laundromats and beauty salons are showing signs of growth and that's probably because our population has grown. we have a situation in which three industries are doing pretty well and one of them is it not doing well. this has implications for the work force and types of jobs that are in san francisco. to illustrate that, we looked at the occupations that are held by

businesses and we broke the mouth by the wages they pay in san francisco and the education they require. we broke it down into nine categories. just to hit the highlights of this -- in the creative industry, it is a rapid source of job growth but the majority of jobs are high-wage jobs for people with more than a four- year degree. about 50% of san francisco adult have a four-year degree and 50% don't. when we see industries that -- 81% of the jobs in this sector require a four-year plus education. that is not in balance with the skills and labor supply of the city as a whole. the experience industries are on the other side of it. 61% of those jobs pay lower

than $17.50 an hour. that puts most households have about 50% of an emi, which is at the top of the very low-income category. that is quite a low wage in san francisco. a majority of the jobs here do not require a four-year degree. we have one rapidly growing industry with a lot of high wage and high skill jobs and one with a lot of low-skilled jobs. financial-services has more opportunities for people without a four-year degree below 70% of the jobs require a four-year degree. it's in the local serving sector of the economy where the overall job growth has been weakest and you have the most low and medium education jobs and the median wage jobs.

it is a concern and it will have demographic implications as i will share in a moment, the kind of an unbalanced performance of our economy is affecting the kinds of jobs we have and the kinds of workers who lived in san francisco. let me jump ahead to this chart. i shared with this committee a few months ago talking about housing. this is the changes in the city's income. we have had a lot of growth in the very low and low-income population since 1990. we have seen a decent income and over median and stagnation or decline in the three categories in the middle. i don't think it's a coincidence that the types of jobs were hosting in the city are growing

at the ends and our populations are growing at the ends and not in the middle. this is reinforcing a pattern of increased inequality in the city that comes from the labour market and comes from which industries are able to succeed and be competitive in san francisco and which cannot. let me turn to some barriers to business and offer some explanation for why some businesses may or may not be able to grow in san francisco. i'm going to focus on three areas -- labor costs, cost for space for real-estate and their taxes. in terms of labor cost, i deal with this first because it is the biggest share of most businesses in our knowledge and service-based economy. the biggest share is in labor. san francisco in general, wages

are higher here than they are elsewhere and significantly higher than the north bay. depending on the industry, they may be more or less than the south bay bill. on average, they are about 8% higher in san francisco than elsewhere. that can make a significant difference to businesses that hope are forced to pay more for being in one area rather than another. why is that? why are there differences in labor costs in the bay area? for many businesses, it's relatively easy to relocate in the bay area and take advantage of these opportunities. a major reason is housing costs. most households, the single

biggest expense is housing costs. san francisco, since the housing crash, has the most expensive housing in the bay area. because our housing has fallen by less than it has another places, we are the number one housing costs area in the region and that helps to contribute to the high labor costs. this chart looks at housing affordability before and after the crash. the top line is not a place where we complete -- were we compete but its illustrative of what happening in other parts of the state. the chart shows how much of an average house could of average household for. but in the late 1990's, housing was reasonably cheap. during the house and run up,

even though a ton of housing was built, must have -- the price kept going up, so what people could afford went down. when the bubble burst in 2006, and they were early in solano county, housing started to decline rapidly. so that they can afford more than three times the typical house in cent -- in solano county. to some extent, that's true and all the suburban counties around san francisco. in san francisco, the amount was much more muted. four people could afford 100% of what a three-bedroom cost. was a nice match between income and housing prices. as the bubble took off, the amount of house that household afford went down and down until

you could only afford half the price of a three-bedroom house. we have gotten some relief as housing prices have cooled off but not nearly as much as other parts of the region. yes, we have had a housing price correction and it does help wages, but relative to the rest of the bay area, we are in a worse position. while you would hate to be solano county right now and dealing with over speculative building, for the next 10 years or more they will have fairly affordable housing compared to other places and that will make them attractive to businesses and a way they have not been in the past. that is one category of cost difference that is important. a second is commercial rent. this chart shows how commercial rent has behaved over the last several years.

generally, san francisco is the most expensive. we are about 10% more expensive than the rest of the bay area and that goes to another disincentive for businesses to expand in san francisco relative to other parts of the bay area. the third we looked at his business taxes. business taxes are third for a reason. we seem to have the highest business tax burden in the bay area, but when you look at the differences of tax payments verses what date paid in labor or office space, there is no comparison. supervisor cohen: are you specifically talking about payroll tax only? >> yes. it is true that businesses pay a lot of other taxes, but this is

just comparing our payroll tax which is what is generally a gross receipts tax. those are three cost factors -- housing price, labour, office space differences and taxes. it creates a situation within which there are substantial cost differences being in san francisco and other places. it is important that the city make decisions and these are relatable to policy decisions this city makes. be mindful of the economic development strategy and having a more balanced process of economic growth across the city. industries like technology are able to succeed despite the high labor costs. there is some information that

labor costs are actually lower here than they are in santa clara. but that is not generally true. let me give you an example i ran of a hardware store with 18 employees. what would they paid in wages, office space and taxes if they were in five cities in the bay area. san francisco has the highest labor. the office space is also the highest, those not nearly as basic a cost expense. but by the time you are dealing with office space and labor, the taxes hardly matter. that is an example of the magnitude of difference we're talking about. for a large law firm, san francisco is more expensive but it is comparable to the south bay.

just to kind of conclude what we have looked at with the barriers to growth, on average, a business tends to pay more if they are closer to san francisco and that discourages job growth and that results to housing, commercial real-estate and taxes. the industries that seem to be most affected are the local serving industries which can suffer because of leakage of sales or businesses moving out and serving customers directly into san francisco. these are three areas of concern and it's just the beginning of the analysis we're doing on business that will form a strategy in the months to come. i'm happy to answer any further questions.

supervisor mar: you kind of quantified the barriers. how huge is the housing cost compared to the payroll tax barrier? >> the labor cost different as a whole as 8% across the bay area. the payroll tax is a 1.5% cost on payroll. one way to look at it is is as bad as five payroll taxes. not that payroll taxes bad and housing and labor costs are five times that. i hate the charts show fairly clearly -- what is ironic about the hardware store is that it does make a difference but for most places, it's not the hardware store that makes things more expensive.

but these factors to combine to have that effect. thank you for the presentation. >> as i mentioned in the outset, we see this as the completion of the phase one findings as the foundation for the conversation which is coming, which will be the update to the recommendations and strategies and recommend actions. what i want to do is preview some of the next steps. we will be following this with outreach meetings over the next month into june with industry groups, community organization and labor organizations, and the like. we will incorporate that feedback and have a similar

presentation and discuss the feedback and ideas and thoughts and answer questions you may have as part of that. the second thing we're working on is the business barriers survey. this asks questions of businesses, what are things that affect your ability to do business, are you going to expand? those answers will be incorporated into the final update to the strategy. we are also using the meetings as a way to encourage people so they may be encouraged to respond to the survey which will be administered online. we would love to comeback to you and present the results of the business barriers survey and present results we have been getting later this summer. we would also like to use this hearing as an opportunity to brief you on some of the work we've been doing related to the

recommended actions inc. in the original economic strategy to give a baseline of what staff is working to do with these issues. finally, the key piece of phase two is the recommended actions for the strategy. what we will be doing is taking the phase one analysis and the results of the business barrier survey as well as this committee is the back to build the recommended actions as part of phase two. we will take the recommended actions and work with city departments through internal meetings and elicit their feedback and work with among areas that touched the other areas. there are many things we do work on and many of the things we don't work on and that's why we're working closely with other

departments. we would like to present in the fall the complete report to the commission which incorporates all this as well as to the full board for adoption. with that, i am happy to answer any questions you have. supervisor mar: for the land use hearing in the summer, we will work with you. i know we have a number of big items through june but we will try to do our best. i appreciate the outreach meetings being broad and that is appreciated. the survey results should be fascinating. i'm wondering if you might be able to share those with us as the draft come out and we will do our best to schedule that. thank you. >> thank you, supervisors. supervisor mar: let's open this

up for public comment. hi>> i listened very attentively to the presentation. from time to time, i go to the comptroller's office and there's a lot of information there for the public's which i take and i read. in all of our deliberations in the presentation given, some of the underlying factors we need to steady like the housing element. the housing element is very important because it guides us through a 10-year timeframe. in the past, there were some differences with the housing element and was taken to court. when we are talking about housing, i was a proponent of

part -- of proposition f and we suggested 50% market value and 50% direct, including no income and low income. when the markets fell in 2008, that is what happened automatically and that has been repealed in various reports. mr. chairman, i think it is despicable that when a constituent writes something, that's totally different. but when he is here to bring up that in this type of forum and not give that person a chance to respond. whoever made those statements has left the room and i'm going to respond to that. sopwhat i am saying is if you wt

to play by the rules, let's play by the rules. i'm not a punt. thank you very much. supervisor mar: i'm not sure what you are referring to. >> because i'm an advocate and i cannot attend all meetings, but i listen to it at home, i will write in some of my blog that i'm going to watch the deliberations like a hawk. which means a hawk it's a bird's-eye view and i try that. i go to the planning department when i have the time. i go to the land use when i get the time and i go to the board of supervisors when i get the time which gives me an idea for how -- supervisor mar: there was a

comment made by one of our committee members eiffel was targeted at you? >> yes. -- you felt was targeted at you? >> yes. i have admired you for many years because of what you do and admire you because of how you address certain issues in the social network. you know i interact sometimes. that tells me you are an educated person. you have certain standards. but you also take the time to reach out to constituents and i admire that. what i do not admire is people say there is a supervisor or representative and they don't do that. people come to me and tell me everything. they come to me from your constituency and other constituencies and i have to

refrain -- as an advocate, i will say anything harmful but i can say when i write. supervisor mar: i will do my best to talk to about that. i think he said he would file an ethics complaint about a comment made by a commission request for -- by commissioner? >> yes. under the brown act, no conversation normally should be conducted. supervisor mar: that makes me -- that helps me understand which you're referring to. i will follow-up on that. is there anyone else from the public to with like to speak? public comment is closed. i would like to thank the public for speaking on the number of issues and i hope we would have had a larger group of residents. i appreciate the great presentation.

thank you to our chief economist and thanks to the office of economic work force development. i this information is critical for everyone from business small and big to labour and neighbor of organizations to understand how critical job development is and how we need to address the barriers to creating more jobs and jobs that allow people who are educated and those who don't have four-year degrees that are stuck in the service sector or the so-called entertainment or creative sector and how jobs and housing are linked and housing, being a huge barrier as well with the costs and san francisco being so out of lack with the rest of the bay area and the barriers to business to creating jobs in the different sectors.

the question the supervisor cohen was raising about these industries and how we could jump-start them and pull back the local industries to be as successful in improving the top two segments are critical and i look forward to in gauging with the stakeholder groups in the future. would you like to follow up with any comments? supervisor cohen: he answered all my questions. supervisor mar: we look for getting more information from you. thank you very much. is there any of the business before us? >> there is not. what action would like to take on this item? supervisor mar: we will continue to the call of the chair.

meeting adjourned. thank you, everyone.

>> this is the most contemporary art show in the history of the museum. let me give you some numbers. 31 artists across the 50 nations. 60 monumental works, the largest of which is behind me. this is a gift to all the people in our beloved city of san francisco. a gift to all the visitors near and far. let me give you our honorable

mayor of san francisco. [applause] >> thank you for being here today. this month is a celebration of asian-american heritage. i wanted to thank our asian art museum, all of its staff, the director. the board of directors. not just parts in san francisco, but asian-american art throughout the world. this is another example of something that i told my friends, if you see some people walking around here, they might be looking for a red lotus. i do not think they knew what i

was talking about. i want to welcome this wonderful piece of art. the artist is here today to join with us. it is a reflection of what our asian art museum is contributing to the dialogue around art itself. a year ago, we had the three heads and the 6 armi buddha that was another example of international art. this lotus suggest to you the feeling of international modern art. it is one thing the that that our asian arse