Local business

Berkeley a jobs magnet, restaurants, Apple have impact


The Apple store on Fourth St. in Berkeley had a dramatic effect on sales tax raised by the city in that shopping district. The number has quadrupled since the store opened in Aug. 2011. Photo: Patrick Nagel

Berkeley has lower unemployment rates than the county and the state, and the city remains something of a jobs magnet, according to the first ever quarterly economic development report prepared for tonight’s Council meeting by the city’s economic development department.

The report, which draws together data from the Census Bureau’s American Community Survey with the city’s own tracking of retail sales tax and other sources, provides a portrait of Berkeley’s economy following the national recession and the slow recovery in recent years.

“Over time, what you’ll get with these reports is a very good overview of what’s going on in Berkeley,” said Michael Caplan, economic development manager for the city. This week’s report will be followed by a workshop focusing on Telegraph Avenue in May, and a second report and second workshop in the second half of the year. 

Caption goes here.

Unemployment in Berkeley (blue) tracks closely the rate in Alameda County (red) and California (green). But over the last three years, Berkeley’s rate has remained a bit lower than the county’s and well below the state’s.

At the end of 2012, Berkeley’s unemployment rate was 7.8%, compared to 8.2% in Alameda County and 9.7% in California. The report calculates that around 4,700 Berkeleyans were unemployed in December 2012, out of a labor force estimated at 60,000.

When the report looks at the less up-to-date American Community Survey, however, some of the stark differences in Berkeley begin to emerge. Over the period of the ACS (2007-11), Berkeley’s average unemployment rate was 7.1%, but for African-Americans it was 17.9% and for Hispanics of any race, 8.6%. More dramatic are the variations by education: for the population aged 25 to 64, the average unemployment rate was 6.2%, but for those without a high school degree, 19.5% were unemployed; for those who completed high school, 14.6%; for those with some college, 11.1%; and for those with an undergraduate degree or higher, 3.9%.

“Clearly, it is the fact that 69% of the population in Berkeley over 25 years of age has a bachelor’s degree or higher,” the report concludes, “that explains why our city always has an unemployment rate below the State and County average.”

Few that work in Berkeley, live in Berkeley

Based on a 2011 study conducted for the city, the report states that only 17.1% of the jobs in Berkeley are actually held by Berkeley residents, a proportion that has been declining. That figure does not include, however, business proprietors or the self-employed. The report cites the ACS data showing 21% of Berkeley households report income from self-employment, nearly double the national average.

The report points to high rents and house prices in Berkeley as a factor in the number of workers who travel into Berkeley. But many Berkeleyans clearly find work elsewhere.

Sales revenue

Sales tax revenue over the last 22 years has been in decline when adjusted for inflation (red dots), although there has been some reversal of the trend in the last three years.

“You find a lot of people commute into the city and even into the South Bay,” said Caplan. “The labor force in Berkeley is desirable both in Berkeley and in the region. We still are net importers of jobs, and that is an indicator of the robustness of Berkeley’s employment sectors.”

Gather, Berkeley Nov. 9

Gather in downtown: Restaurants account for 20% of Berkeley’s retail sales. Photo: Tracey Taylor

Caplan points to the large institutional employers — including the University of California, Berkeley, and Lawrence Berkeley National Laboratory — as a steadying influence on Berkeley’s employment, even with cutbacks in recent years.

Retail sales in Berkeley have been less robust. The report cites the move to so-called big box retailers, clustered in Emeryville and elsewhere, as well as the shift to internet purchases of historic Berkeley retail strengths like books and music.

A major exception is in restaurants, which Caplan calls a “great strength.” Restaurants account for 20% of Berkeley’s retail sales based on sales tax receipts, easily the largest sector (the California average is 14%). In some commercial districts, the impact of restaurants is even greater: downtown, they account for 42% of sales tax, and in North Shattuck, 51%. The report points out that some Berkeley strengths, such as entertainment, do not generate sales tax directly.

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In most commercial districts of Berkeley, restaurants have been a conspicuous bright spot. On Fourth Street, however, the breakdown of sales shows the dramatic impact of the Apple Store opening in August, 2011

There are exceptions to the trend. The opening of the Apple Store on Fourth Street in August 2011 had a dramatic effect on the sales tax raised in the category known as furniture/appliances in that district. The total has quadrupled since the opening.

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  • Guest

    i find it ironic that Berkeley will allow Apple (with all of the concerns about Chinese labor conditions) but not allow a Target or other big box store that would be good for residents with lower incomes (as opposed to Walgreens).

  • curiousjorge

    Apple doesn’t compete directly with small businesses the way that Target does. That said, I’m not a fan of Walgreens.

  • Charles_Siegel

    What makes you think that Berkeley would not allow a Target?

    There used to be a JC Penney’s in downtown, which was replaced by a Ross, which was replaced by a Walgreen that uses only a fraction of the building. I am sure that if Target had wanted to move there, the city would have jumped on the opportunity to have a department store downtown.

  • The_Sharkey

    Location, location, location.

    What chain would want to set up a department store in a location where the plaza out front and the doorstep are regularly used as a campground by gutter punks?

    Walgreens is the only company of that size that I can think of that doesn’t seem to mind setting up in locations like that.

  • Charles_Siegel

    A big factor is that department stores generally want to locate at freeway exits, rather than in downtowns. There used to be a Penney’s in downtown, but if you search for their stores in the Bay Area now, you will see that every single one is located at a freeway exit and is not accessible by transit. (The exception to this trend is very powerful shopping areas like Union Square in SF.)

    I hope the regional planning under SB 375 deals with this issue. SB 375 requires regions in California to create regional plans that reduce greenhouse gas emissions. It would help to reduce GHG emissions, if they required new department stores to locate near transit stops.

  • The_Sharkey

    Very true as well. The only places in Berkeley where a chain like Target would consider setting up shop would have to be in West Berkeley, and the archaic zoning there won’t allow it.

    When you look at the few places where Target sets up that aren’t at freeway exits (Moscone Center in SF for example) they are areas with high foot traffic, ample parking, and where the city has spent considerable time and effort cleaning up the area to make it more presentable. As it is right now, downtown Berkeley doesn’t even come close.

  • foo

    That’s totally the secret of downtown SF – abundant parking! That’s why everyone comes there.

  • Biker 94703

    You don’t like Walgreens/CVS? Lucky for you there is a CVS/Walgreens just down the block.

  • Soberkrez

    Do autos fall under misc. retail?

  • Soberkrez

    Never mind answered my own question. No auto sales in the chart because it’s fourth st. Auto sales are the biggest source of sales tax revenue in s. Berkeley according to the report, which is consistent with previous coverage and comments here on berkeleyside on land use and zoning decisions in this area.

  • The_Sharkey

    Have you been to the Moscone center before? Are you aware of the gigantic multi-level parking lot at 5th & Mission? Do you have strong enough reading comprehension skills to understand that my comment about parking was specific to Target locations and not a statement about why people do or don’t go to downtown San Francisco?


  • curiousjorge

    unless you run an independent pharmacy or convenience/grocery store…

  • Eddie

    Stores like Target love huge parking lots. Shoppers there come out with carts full of items. Try lugging all that on BART.