New data released in December 2024 by the U.S. Bureau of Labor Statistics (BLS) sheds light on the economic landscapes of Los Angeles and San Francisco, two of California’s largest metropolitan areas. The insights reveal distinct trends in employment, wages, and cost of living, showcasing the strengths and challenges that define life and work in these iconic cities.

Los Angeles Outpaces San Francisco in Job Growth

Los Angeles leads the state in job creation, adding 57,100 nonfarm jobs between October 2023 and October 2024, representing a growth rate of 0.9%. Key sectors driving this expansion include education and health services (+45,600 jobs, +3.8%) and leisure and hospitality (+9,100 jobs, +1.2%). Los Angeles' diverse economy also saw gains in trade, transportation, and utilities (+10,600 jobs, +1.0%), underscoring its role as a global logistics hub.

San Francisco, in contrast, added 9,700 nonfarm jobs during the same period, growing at a slower rate of 0.4%. Despite its smaller scale, the city saw notable growth in education and health services (+14,200 jobs, +3.5%) and government (+6,100 jobs, +1.9%). However, significant declines in information technology (-9,300 jobs, -6.6%) and construction (-3,300 jobs, -2.6%) reflect volatility in the region’s tech-driven economy.

Unemployment Rates: San Francisco’s Low vs. Los Angeles’ Lingering Recovery

The unemployment rate further highlights the economic divergence. Los Angeles reported a 5.1% unemployment rate in October 2024, slightly above the national average of 4.8%.

Meanwhile, San Francisco maintained a low unemployment rate of 3.4%, showcasing a tighter labor market and stronger demand for skilled workers.

San Francisco’s Higher Wages Dominate Over Los Angeles

Wages in San Francisco far surpass those in Los Angeles. The average weekly wage in San Francisco is $2,879, nearly double Los Angeles’ $1,630 and significantly higher than the national average of $1,527. High-paying sectors like technology, financial services, and professional services drive this wage premium. Occupations such as registered nurses ($100.44/hour) and accountants ($56.70/hour) illustrate the city’s capacity to offer exceptional salaries.

Los Angeles, while trailing in overall wages, still boasts competitive pay in key fields. Registered nurses earn an average of $82.45/hour, and accountants make $46.45/hour—strong figures when paired with the city’s relatively lower cost of living.

Cost of Living Strains San Francisco Residents More Than Los Angeles

The disparity in wages is counterbalanced by differences in living costs. San Francisco households spend an average of $110,886 annually, compared to $86,077 in Los Angeles. Housing consumes 38.6% of budgets in San Francisco, compared to 36.5% in Los Angeles.

While both cities face affordability challenges, the burden is particularly acute in San Francisco, where healthcare and transportation costs also claim a larger share of household budgets.

Sector Vulnerabilities: Los Angeles Manufacturing Declines vs. San Francisco’s Tech Troubles

The economic structures of Los Angeles and San Francisco present unique strengths, but also highlight vulnerabilities that may shape their future growth. Los Angeles benefits from a broad-based economy, with robust gains in leisure, hospitality, and trade sectors that align with its global reputation as a hub for entertainment and logistics. However, the decline in manufacturing (-11,600 jobs, -2.4%) points to challenges in retaining industrial employment amidst technological shifts and globalization.

San Francisco, meanwhile, showcases the power of specialization. Its dominance in technology and financial services supports exceptionally high wages, but this focus leaves it more exposed to sector-specific downturns. The 6.6% decline in information technology employment underscores this vulnerability, raising concerns about the broader impact of tech layoffs on the city’s economy.

Labor Market Dynamics: San Francisco’s Tight Market vs. Los Angeles’ Flexibility

San Francisco’s 3.4% unemployment rate reflects a tight labor market, with strong demand for skilled professionals. However, this also leads to higher competition and potential hiring challenges for employers. Los Angeles, with a higher unemployment rate of 5.1%, has a more flexible labor pool, but the rate indicates lingering economic recovery issues, especially in lower-income and industrial job sectors.

Balancing Wages with Living Costs: San Francisco’s Premium Pay vs. Los Angeles’ Affordability

While San Francisco’s wages are unmatched, the cost of living presents significant challenges for residents. Housing alone consumes nearly 40% of household budgets, and overall annual expenditures exceed the national average by more than $35,000. Los Angeles offers a more balanced scenario, with lower household spending and a greater emphasis on transportation costs over healthcare, making it somewhat more affordable for middle-income families.

Solutions and Outlook

Both regions face critical opportunities to address their economic challenges:

• Los Angeles: Expanding access to higher-paying industries, such as professional services or healthcare, could help bridge wage gaps and mitigate unemployment disparities. Investments in education and retraining programs for declining sectors like manufacturing could also bolster resilience.
• San Francisco: Diversifying beyond technology by fostering growth in education, health services, and government sectors could reduce economic volatility. Additionally, addressing housing affordability through policy measures and increasing housing stock would ease financial strain on residents.

Conclusion: California’s Diverse Economic Engines

The economic profiles of Los Angeles and San Francisco highlight the diversity of California’s economy. While Los Angeles leverages its vast scale and industry variety, San Francisco continues to lead in high-paying specialized sectors. Both cities face challenges in balancing employment growth, wages, and living costs, but their distinct strengths provide pathways for sustainable economic development.

As California’s major metros navigate these realities, their approaches to economic diversification, labor market adaptation, and affordability will play a pivotal role in shaping their futures—and the lives of the millions who call them home.