by Paul R. Spitzzeri
After its review of the history of the City of Industry and the area, the authors of the Stanford Research Institute study on the city turned to a section on “Industrial Characteristics and Trends.” The basic issue raised was that “being a newly incorporation and rapidly expanding governmental entity,” the City lacked “basic information on the characteristics and trends of the industry within its corporate elements.”
The two federal manufacturing censuses in 1958 and 1963 did not include data on the city, but the SRI did request the feds to provide special material from 1958 for the purposes of the report, with these presented as appendices for historical value. Continuing on, the authors observed that the growth of firms in the city was averaging about thirty per year, with about 70% of them devoted to manufacturing. In 1963, however, there were forty-three new companies in the city.
As to non-manufacturing enterprises, they tended to be service entities for employees in the city and in such areas as restaurants, gas stations, grocery stores and other retail businesses, but also wholesalers, contractors and business services (car dealers, hardware and lumber dealers, etc.)
So, in 1958, there were fifty-three companies operating in the city, of which forty-one were in manufacturing. Five years later, there were 203 firms and 146 of them were manufacturers. The number of employees grew from about 3,300 (all but 428 in manufacturing) in 1958 to 8,600 five years later, with 1,250 of them in non-manufacturing businesses. It was noted that there were many smaller firms opening in the city by 1961 and this stabilized the number of workers per company.
With respect to payroll, the authors found that “the manufacturing firms locating in the City during 1958-1961 not only hired fewer employees on the average but additionally tended to pay those employees a lower than average annual wage. It was stated that part of this was due to “wage austerity” as well as company types that tended to pay lower wages due to work that was considered “low-cost.”
An accompanying table, however, shows that there was marked increase in wages in 1962 and 1963 and the aggregate industrial payroll amounts also grew strongly during those two years compared to the prior four. Another indicator of industrial growth was through “value of shipments,” which meant product value less discounts and allowances and before freight charges and excise taxes. Again, there were higher rates of growth in the 1962-63 period than before and this reflected an indicator of sales and profits.
Value added by manufacturing is another barometer, though the explanation in the report is unclear, so another way to look at it is that the concept looks at the difference between the value of goods and the cost of supplies and materials to produce them. Again, while there was steady growth in those first four years of the city’s existence, there were notable jumps in the following two years of 1962 and 1963.
Summarizing the results of the changes in industrial operations in the city, the report noted the dramatic growth in the number of firms (by 283%); a healthy increase in the number of employees (162%), a significant rise in payrolls (180%), and major increases in shipment value (192%) and value added by manufacturing (246%). There was, however, a “pronounced drop in the the size and level of activity of the City’s average firm,” though it was also noted that there was a “general absence of change” in data by employee reflecting smaller firms predominating during some of those early years of the city’s history.
Looking at comparisons of the average manufacturing firm in the city to counterparts in the county, it was reported that the average number of workers per firm in the city was 51, while it was 50 broadly, while the average annual wage was about $600 per year lower in the city than in the county. This was attributed to an absence of high-wage jobs, like oil refining or aircraft plants as well as the lack of a wage ordinance.
A table examined the average number of workers and average annual wage for twenty-one industries (including those mentioned above as well as paper products, metal industries, food production, chemicals, furniture and fixtures, printing and publishing, and many others.) Firm sizes varied from eight to 186 employees and wage levels from about $3,000 to $8,000.
Next week’s post looks at some interesting “Economic Characteristics and Trends” concerning land area and growth; population; building permits; and assessed valuation.