provide them with a collaborative environment to test out their businesses business this helps to innovative san francisco in 2007 strategy emphasiss when it says we have expand academies in san francisco looking at mission bay we've succeeded a reach institution and startup that go to large companies and create the secretive environment we're working on this looking at hunters point we're focusing on continuing to drive development and driving the development of our talent as a anchor for commercial development with that i'm going to turn it over

to talk about the industry how it performed based on those are actions. >> good afternoon ted where the controller's office as todd told we were asked to assist with this strategy update by focusing on an analyzed of how the city's economic and supervisor farrell you said the recent years the performance is strong across the board we over took a different time period 2004 to 2010 the reason we picked those points they were economic low points in the business cycle one of the reasons our economic economy is strong we have about in the recovery so if you compare where we were 5 years ago some of the growth because of the business cycle and maybe in a different economic cycle and difficult to

separate those we want to see how the growth to the same period this is one of the long term economic development and this give us the long term prospective over quite a long period to look at data an economic performance in san francisco in the late 60s to 2009 san francisco's employment didn't change in fact the peak in terms of the employment was above the peak in 2008 nearly thirty years later it's been a different story but for many years the san francisco overall employment level was understated phone call focusing on the 2004 to 2010 we estimated the economic performers of the 4 sectors of city's economy are

the creativity industries and financial and professional services and local serving industries what this chart indicates the size of the bubble the relative number of jobs in the said industries where it is open the light axis from the bottom of one recession to the next, we nevertheless, say rapid growth this is, of course, before the tech growth we've seen this decade and seen rapid growth in the experience sector 9 financial and professional services sector was flat we lost the local serving industry todd made an important point they depend on on the export industries and in the sentenced we have a recession to say often

buzzed the export stridz industries take the rest of the economy when we come out of a recession it pulls us up but not all the economic will grow at the same rate from 2004 to 2010 a couple of industries it naturally grow and other industries don't what do i mean is they columnist with a set of industries that relies on highly skilled landmark those businesses succeed because of the critical mass because the talent the talent comes because of the jobs and clustering in which for whatever reason the bay area economy in san francisco is the most successful

and competitive cluster in the world so that's a set of activities as long as theirs growth b will want to grow in our region secondly, the extremely committees we're consistently ranged as one of the highest in the wormed we have a 20u6r9 attraction we're going to get growth into the economic and the critical mass factor around the arts and other things strengthens the tourism program so those two derivatives of our economy hass have a lot of factors that make them want to grow in san francisco they're not tied to the technology it

pays higher wages of anywhere in the country and is the faster it's a testament to the ability to grow here the financial and professional sector is a set of companies that have generally been here a long term over the long period we're looking they're basically holding employment constant and not really a source of growth or decline their set of activities that the city is strong if and basically, the companies that can at least hold constant given the high cost of doing business in san francisco now the local serving industries are a different story they run the game even though from health care to construction wholesale and retail trade, beauty parlors and laundry mats they do don't

necessarily have a competitive process but face the prurdz from nearby community and increasing resources off the internet we're seeking a growth they simply do the same as the creativity industries have this different performances has important implementation for lots of things that about san francisco particularly or starting with the types of people who are able to find jobs because they offer different types of jobs this is a chart that shows we breakdown the workforce of the people that work in san francisco bill which

of the four sectors they work in how much education level and what is their afternoon hourly wage that shows the two industries that derivative our economy that the knowledge industries and the experience open the other have different employment the experience sector about 70 percent of the jobs in that sector pay less than 1750 an hour and the jobs are concentrated among the folks with less than a education on the other hand the creativity industries and the financial services about 70 to 75 percent go to those folks with a 4 year degree only 40 percent of san franciscans have a degree that's the highest in the country but still on 40 percent the creative

financial industries that basically means the two sectors that are the biggest sector of job growth offer hive wages with people with a lot of education or low wages the industries that offer the low wages are the locally serving industries when you brake to down they have the medium sector going to people with less than a 4 year degree and one of the implementations of the incarcerate that source of middle-income low wage sector is going away because those businesses are not competitive in san francisco this is the demonstration this is the demographics broken down by the categories from extremely low when is less than

50 percent of area medium income over one hundred and 50 percent of medium income and from 2004 to 2010 we have growth at the low and high-end of the spectrum if you look at the low and mirrored it had look at of growth and the other went down it's not a mystery the industries hiring the people at the bottom and top him or her leading to geographic you difference. >> the economic development stream prop i calls for a way to do a barriers to job growth. >> can i ask you a question we've looked at the graphs and thank you for everything through

2010 where are we today would you imagine is looks at geneticly. >> i'll go chart by chart this one's in the one looks at different we're at 2013 at the all-time high in terms of employment and i'm sure that 2014 will be higher we have broken out of the mold of treading water for thirty years this chart is going to be different for the recent years all four sectors are growing. >> then relative growth because whether it's medium or audits the tech seethes drawing the attention around san francisco a lot of talk gets you know mentioned about well, the

multiplier effect many people are talking about local i think people who are opening up sandwich shops as individuals or serve industries can you talk about where you think this is gone relative to each other are through the roof it is much more an out liar. >> first, let me agree with you about the multipleer effect when we say it is driving growth the tech and other export and the tourism industry generate the multiplier effects in terms of that have this i think the creative industries the tech sector is the faster growing sector in the earlier part of the recovery 2011 to 2012 the most growth we've seen in the temple percent range two to

three times faster than the rest of the city but the chart is different through other upswing so far have been growing that's the departure whether we've solid. >> if the chart was 2010 to 2014 i assume creative industries will be the one to the right would you think that local industries would surpass the financial and professional. >> financial and professional maybe grown but a they've not recovered in jobs and headquarter are not a major source of job growth owe local experience are probably pretty close on the right axis in between the other two. >> got you thanks.

>> so just to come back to the barriers to job growth a survey that staff conducted to ask basically businesses what they how they experienced san francisco's local compliment and what they found were barriers to their expansion we in the controller's office supplemented this by trying to actually construct what types of businesses costs the different types of businesses experience in san francisco versus others cities in the san francisco bay area how much for labor or office space and how much to pay for taxes in terms of what the survey said those are the 3 points the businesses pointed to a difficulty of finding releasing that is probably since this research observations of labor costs were high and the

this is sdouj job creation and also difficulties related to business taxes and things came out of survey when we look at the numbers ourselves we found that labor costs are the biggest between alternative locations that a business might stick within the bay area we didn't compare san francisco to metropolitan areas or move to a metropolitan area in texas it maybe cheaper but not all the benefits in terms of the workforce and the quality of life and everything else but if you move to other places in the bay area looking at how san francisco ranged compared to other places in the bay area was

important in general san francisco and places are the high cost places and the bay area is the less extensive the office space to a lessor is we have relatively high taxes in san francisco but the relative to backdoor costs is relative this is due to housing costs not because our workers take home more or take it home and give to the bank or landlord. >> so quick question when you talk about labor costs it's not about things that maybe those of us in city hall pass or mandatory literally the employers are paying more out-of-pocket to keep competitive or an employee in

the city and other affordability questions. >> we're showing the compensation that businesses and employees get some of the things in terms of regulation that the city has added open my ad to labor costs but don't turn into worker money those are not reflected. >> those are not. >> no. >> okay. thank you. >> supervisor mar. >> thank you supervisor farrell mr. egon i was going to go back to 2012 when you presented to the land use committee but the housing country is different the labor cost barrier related to heirs costs is the biggest number one barrier and it is roughly equal to 5 times the payroll tax and now we have an

even much worse housing crisis speaking from a lot of the fears out through about people being displaced because artist cost of housing how has this changed or the number one barrier. >> i haven't redone the math supervisor but i'm confident it is the number one barrier several times the tax difference this is it would be. >> supervisor tang. >> thank you. i don't see it on the charter specifically but in terms of probably supervisors office and the small businesses we come across or worse the businesses the costs and the amount of time to get our proper permit is a huge barrier for entry i don't know if this was something maybe slithering high on our survey but occurs how

that factors into the entry. >> it was quite high on the survey that is something that todd will speak about it is hard to quantify but certainly in terms of what the businesses said it was near the top the easy of permitting the ease of city regulations. >> okay. thank you. >> so in conclusion supervisors the question where do we go from here we concluded that the economic strategy is 7 continue action areas as ted mentioned this is exactly what you're asking about clearly ted showed open the slide that showed you disproportionately costs driven by high housing costs that is important we focus on the thirty

thousand unit of affordable housing and thirty percent of affordable housing down payment assistance and range of things you supervisors are familiar with are critical in insuring the city's economy remains competitive we want to make sure the recipe have pathways to job mobility and job investment being able to have a job as the mayor likes to say one of the key things to the have and have nots and to make sure that people under bloid or wish they made more money to have greater job opportunities as well we need to streamline the business permitting process this committee has been incredibly

supportive of the business protocol we are doing that now continuing the streamline that for our small businesses as ted mention the rising reilly's costs in addition to the lack of space in the city we need to continue to retain the businesses to work and grow in san francisco with our pdr methods and the transportation businesses our targeting around the nonprofit sector and our effort to support sort the small businesses through the small business commission we need to accommodate new jobs and businesses particularly over the long term in the central selma and waterfront we need to insure we're supporting the local industry with the corridors as well as the pdr sectors so that's again 5 more pdr plan and the investment in the

neighborhood on transportation and infrastructure obviously it the critical the economy relies on the transportation network we need that to be competitive finally 4 conclusion in the last economic strategies we need to continue to invest in the pdr sector and continue to upgrade our tourism and retain large companies in san francisco we've seep that there is a big change since 2007 and continue to support startups one more point supervisors that economic strategy was not designed how to address those all those challenges but designed to look at the transformation 80 transportation to workforce development fits into the timeframe for you supervisors particularly as the budget

season come up and evaluate those important issues. >> thank you very much supervisor mar. >> thank you, gentlemen and laurel as well for the presentation i wanted to ask one framing question in 2007 we had one masking inequality population and like business ownership of that number 3 the inequality metrics do we know how we dealt what inequality because my sense as we read in the national press the rapidly growing and the push out it seemed of a lower income population but a middle-income population are we looking at 2004 and 2007 as inequality and

inclusion and equality as a key goal for our economic stream. >> thank you i'd like invite ted egging on up to address how we look at how we're addressing the inequality the first is insuring that we're driving down costs so for the residents and businesses so the development of affordable housing and giving people access to reasonably priced spaces and businesses insures we're able to keep people here and that there's able to be successful to continue to live here and the second element the ability to give people the ability to earn more money it is a key for education to earn higher wages and advances more and more to be able to address that i'm invite ted to speak on the actual data.

>> supervisors in the 2007 report we did look at entities of income and equality i recall that san francisco has the highest inequality manufacture with the cities we compared it to identify the rerun it but look at the san francisco with the largest cities in the united states it is increasing even faster i believe it is maybe ranging thirty in the top one hundred among the 10 or 15 faster income levels with the last two or three years i don't know but income and equality for loans i've tracked it that problem has not gone away. >> i have another point i know that our former school president

of the school board was in the chambers i'm pleased on the oewd pathway and the work with the school district but one thing was not mentioned or mention the city college for displaced workers to retrain but for the young people to have the skills hard and soft skills to find the jobs in the various experience and knowledge and thanking our sector that are growing it's a big concern concern our local industry is dloin and the middle-income jobs are decreasing with the governments how to look at low wage workers to pull them up. >> construction and other industries are critical i know it is mentions in here that construction jobs are local but my understanding a lot of unions many of the jobs are regional

and not people that live in the city i'm wondering about that sector we consider it local but maybe outside of the city. >> by local we only maple that the companies serve customers in san francisco and we show you statistics the job industry that is resulting from work that takes place within the city. >> i know efforts like our local hire is important for the san francisco workforce and what's the significance of city college because i know you mentioned ufls by the way, by the way, whatever the support for pathway and listing the middle wage incomeers. >> there are career training

and having the local partner skills for people like i mentioned mobility and the packet to increase the earning potential they've been critical partners in our skills and building construction stay an construction we talked about on that board and the city is implementing the hire ordinance that addresses that issue you've mentioned supervisor the construction jobs that are being created are going to san franciscans and marrying that we're not just having a mandate but insuring the local workforce is trained and rode to work with the skills at the job site so to partnership with the city college and other partners is

up. >> colleagues, any further questions. >> okay. thank you again for your work and looking forward to discussions. >> thank you, supervisor. >> at this time open up for public comment any public comment on item 2 all right. seeing none, public comment is closed colleagues thanks for sitting through that i thought that was important we launch into budget city with our unemployment rate and thanks to oewd can i have a motion to continue this item to the call of the chair. >> a motion chan madam clerk, any other business before this committee? >> no, mr. chair. >> okay thanks everybody we are

watching. >> ever wonder about programs the city is working on to make san francisco the best place to live and work we bring shine won our city department and the people making them happy what happened next sf oh san francisco known for it's looks at and history and beauty this place arts has it all but it's