Employment Concentrations by Metro: Sacramento

The mix of jobs in a metropolitan area has significant impacts on the local apartment market. For this reason, MPF Research has identified five U.S. metros that have outsized exposure to certain industries. The data for these rankings were obtained via the Bureau of Labor Statistics as of March 2015. In this blog series, we’ll take a deeper look at the five metro areas and highlight unique characteristics that drive the employment makeup of each metro. We’ll also a few other “runner up” metros that also have outsized exposure these five employment industries.

Among the metros that have outsized exposure to certain industries is Sacramento. Roughly 25.6% of Sacramento employees work in the Government industry. That percentage translates to 231,900 Government workers.

Within the Government sector, there are three subsectors: Federal Government, State Government and Local Government. Since Sacramento is California’s state capital, the State Government industry contains the largest chunk of employees at 12.8%, followed closely by Local Government at 11.3%. Meanwhile, Federal Government only contains 1.5% of Sacramento’s employees.

It is pretty clear that Sacramento’s economy is dependent on government. In fact, a problem Sacramento has wrestled with has been its dependence on state government. California as a whole has struggled with funding issues and budgeting problems, which has affected spending and employment growth in the state’s capital city. However, over the past few years, California has made big progress in addressing some of these budgeting issues, facilitated by a recovering economy and increasing tax revenues. As a result, Sacramento’s total employment in the State Government subsector finally reached pre-recession levels in 2014’s 1st quarter. Since then, the subsector has gained another 2,900 jobs.

Looking at the 2015-2016 budget proposal, there are a few items that address budgeting issues and, in turn, will be a good thing for Sacramento. To see the 2014- 2015 proposal in its entirety, you can view it here.

• $151 billion in spending from the General Fund and Special Fund ($11 billion more than the revised 2013-2014 level)
• $2.3 billion reserve, $1.6 billion of which would be in the rainy-day reserve and $693 million in the General Fund’s traditional reserve
  • By the year’s end, the state’s rainy day fund will have a total balance of $2.8 billion
• Continues to focus on paying down California’s “wall of debt”
  • Pay down the remaining $1 billion in school and community colleges deferrals
  • Make the last payment on the $15 billion in Economic Recovery Bonds
  • Repay local governments $533 million in mandate reimbursements
• Plan for allocation of $850 million in cap-and-trade auction revenues
• $618 million for the state’s water challenges
• $815 million for deferred maintenance infrastructure projects

It’s clear that California is slowly getting its budgeting issues under control. And, as the state continues to recover from funding and budgeting problems, Sacramento’s government sector will continue to recover.

Let’s take a more in depth look at Sacramento’s government sector. Some of California’s largest employers are within the government sector, all based out of Sacramento:

• California Prison Industry Authority: This correctional institution is located in Folsom, which is within MPF Research’s defined metropolitan area for Sacramento. There are between 1,000 and 5,000 employees that work within this institution, which is made up of government employees who oversee and operate the correctional institution.
• Corrections Department: This is another correctional institution located in downtown Sacramento. It also has between 1,000 and 5,000 employees who manage and operate correctional institutions.
• Department of Transportation in California: This business is comprised of state government offices and legislative bodies. There are over 10,000 employees within this sector who serve as legislative bodies, advisory committees and commissions. Examples of employees within this sector include Congress, state legislatures, and advisory and study legislative committees.
• Employment Development Department: This industry includes establishments that provide government job training, vocational rehabilitation or habilitation services. There are between 1,000 and 5,000 people employed within this industry. Types of jobs include job counseling, job training, and work experience to unemployed and underemployed persons/persons with disabilities.

• Environmental Protection Agency: The mission of this agency is clearly stated to “restore, protect, and enhance the environment, to ensure public health, environmental quality, and economic vitality.” There are between 1,000 and 5,000 people employed in this industry who are employed in either the administration, regulation, and enforcement of air and water resource programs or the administration and regulation of solid waste management programs.
• Exposition & Fair: Sacramento is home to the California State Fair and also hosts several other expositions year round in the Cal Expo. Such events hosted here include home & garden shows, horse races, boat shows, dog shows, Susan G. Komen Race for the Cure, and festivals for children. The California Exposition also has Raging Waters (water actitivies), Bonny Field, 9/11 Memorial Plaza, California Expo Sport & Wagering Center, California Expo RV Park, and places to dine and kick back and relax. There are between 1,000 and 5,000 people employed within this industry.
• Municipal Services Agency: According to the Sacramento county Municipal Services website, this industry provides Sacramento County residents services such as garbage collection, animal care, road maintenance, code enforcement, clean water, storm protection, building permits and development services, open space conservation and regional parks. There are some 1,000 to 5,000 people employed within this industry.
• Water Resource Department: This department protects, conserves, developments, and manages the vast amount of California’s water supply. This includes the State Water Project, a project that provides water to over 25 million residents, farms, and businesses. The Water Resource Department’s mission is to “manage the water resources of California in cooperation with other agencies, to benefit the State’s people, and to protect, restore, and enhance the natural and human environments,” according to its website. Within this industry there are between 1,000 and 5,000 employees.

Runners Up

There are a few more metros that should be mentioned that have high exposure to the Government industry. There is at least a 2.6-point delta between the percentage of Government industry workers in these metros compared to Sacramento. These metros include:

1. Washington, District of Columbia: Approximately 23.0% of the workforce (or 586,800 individuals) are employed under the Government umbrella. I don’t think I need to explain this one, though it was a little surprising to rank at number 2 within this industry. The largest chunk of D.C.’s workforce is within the Federal Government industry (12.2% or 310,900 employees).
2. Durham, North Carolina: Approximately 22.9% of the workforce here (or 67,500 individuals) are employed in the Government industry. The majority of the Government workforce is within the State Government industry (13.7%, or 40,500 employees).
3. Virginia Beach, Virginia: About 20.8% (or 155,400 people) of the workforce are employed in the Government industry. Two large military bases are located within Virginia Beach: Joint Expeditionary Base Little Creek/Ft. Story (6,000 employees) and Naval Air Station Oceana/Dam Neck (3,600 employees). The majority of Government workers in Virginia Beach are within the Local Government industry (11.2% or 83,900 employees).
4. Austin, Texas: Around 18.7% of the workforce in Austin (or 174,300 people) work in the Government industry. This metro is the capitol of Texas. The City of Austin, Federal Government, and State of Texas each have over 6,000 employees. Employment in both the Local Government industry (9.6%, or 88,900 workers) and the State Government (7.7% or 71,400 employees) is pretty evenly split here.

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