LA vs SF: California’s Two Economies

California has two great metropolitan economies, and they could hardly be more different. Los Angeles–Long Beach–Anaheim, stretching from the San Fernando Valley to the ports of Long Beach, employs 6.3 million people across a sprawling landscape of healthcare systems, logistics corridors, entertainment studios, and factories. San Francisco–Oakland–Fremont, clustered around the Bay, employs 2.4 million in an economy dominated by technology, professional services, and finance. They share a state capital, a coastline, and the highest cost of living in the country. They share almost nothing else.

The two metros are studied together because they are both Californian, both coastal, and both expensive. But the comparison obscures more than it reveals. LA is 2.6 times larger than SF in total employment. Its economy is more diversified, more blue-collar, and more anchored to the physical movement of goods. SF is more concentrated, more white-collar, and more exposed to the boom-and-bust cycles of the technology sector. When tech surges, SF surges. When tech contracts, SF contracts — and it has not yet recovered from the last contraction.

This episode examines the two metros side by side: their employment trajectories over 35 years, their sector compositions, and the divergent paths they have taken since 2019. The data comes from the BLS Current Employment Statistics survey, using seasonally adjusted annual figures through June 2025 and unadjusted December 2025 sector detail.

The employment histories of Los Angeles and San Francisco read like two different books about the same state. In 1990, LA employed 5.39 million people and SF employed 1.83 million — a ratio of almost exactly 3 to 1. Over the next 35 years, that ratio narrowed slightly as SF grew faster during its tech booms, then widened again as SF suffered steeper busts. Today the ratio stands at roughly 2.6 to 1, but the trajectories that produced it have been anything but smooth.

LA’s story begins with a painful contraction. The early 1990s were devastating for Southern California. The end of the Cold War gutted the aerospace and defense industries that had been the region’s backbone since World War II. By 1995, LA had shed more than 427,000 jobs, falling to 4.96 million — a decline that made the national recession look mild by comparison. The recovery that followed was long and broad-based: healthcare grew, logistics expanded as the ports handled the China trade boom, and entertainment evolved from film into a global content production machine. By 2000, LA was back to 5.53 million jobs and has never looked back to the depths of the mid-1990s.

SF’s story is defined by two booms and two busts. The dot-com era lifted the metro from 1.82 million jobs in 1995 to 2.13 million in 2000 — a gain of 17% in five years, an extraordinary rate for a mature metro. Then the bust came. SF lost 135,000 jobs between 2000 and 2005, a decline of 6.3%, and didn’t surpass the 2000 peak again until 2015 — fifteen years of net zero job creation. The second boom, fueled by smartphones, cloud computing, and social media, was even more powerful: from 1.93 million in 2010 to a peak of 2.49 million in 2019, a gain of 29% in nine years. Then COVID hit, and the remote-work revolution began hollowing out the city’s office core. As of June 2025, SF employs 2.42 million — still 66,000 jobs below its 2019 peak.

The chart tells a clear story. LA is the steady giant — it stumbles in recessions but grinds back every time, and its overall trajectory bends upward. SF is the volatile specialist — it booms harder and busts harder, and its latest bust (the post-pandemic tech correction and remote-work exodus) has left it as one of the only major US metros that has not recovered its 2019 employment level. LA surpassed 2019 by early 2023. SF, more than six years after the pandemic began, still has not.

Employment totals tell you how big a metro is. Sector shares tell you what kind of economy it runs. And when you lay the sector fingerprints of LA and SF side by side, the two metros look like they belong in different states — or different countries.

Los Angeles is anchored by Education and Health Services, which at 1.34 million jobs represents 21.2% of the metro’s total employment. This is a healthcare-driven economy at its core, with systems like Kaiser Permanente, Cedars-Sinai, UCLA Health, and Providence employing hundreds of thousands of workers. Trade, Transportation, and Utilities follows at 17.4% — reflecting the massive port complex at LA and Long Beach, the largest in the Western Hemisphere, along with the warehouse and trucking operations that radiate from it across the Inland Empire. Professional and Business Services (15.2%), Leisure and Hospitality (12.4%), and Government (12.2%) round out the top five. LA’s manufacturing sector, at 448,500 jobs and 7.1% of total employment, is larger than the manufacturing workforce of most Rust Belt metros.

San Francisco leads with Professional and Business Services at 19.9% — the consulting firms, law offices, accounting practices, and especially the technology service companies that populate the corridors from SoMa to Palo Alto. Education and Health Services is second at 18.0%, a significant sector but not the dominant one it is in LA. The real signature of the SF economy, however, is the Information sector: at 129,900 jobs and 5.4% of total employment, it is proportionally 64% larger than LA’s Information share of 3.3%. This is where the Googles, Metas, Salesforces, and thousands of smaller tech companies reside in the BLS classification. Financial Activities is also proportionally larger in SF (5.3% vs. 4.8%), reflecting the wealth management, venture capital, and banking operations that cluster around the tech ecosystem.

San Francisco is one of the only major metropolitan areas in America that has not recovered its pre-pandemic employment. The metro peaked at 2,488,700 jobs in June 2019. As of June 2025, it stands at 2,422,500 — a deficit of 66,200 jobs, or negative 2.7% from its own high-water mark. By December 2025, the picture had barely improved: 2,425,400 jobs, still 63,300 below the 2019 peak, a shortfall of 2.5%.

The causes are layered and reinforcing. The most visible is the tech layoff wave of 2022–2023, when companies including Meta, Alphabet, Amazon, Salesforce, Twitter (now X), and dozens of smaller firms cut tens of thousands of Bay Area positions. The Information sector — the heart of SF’s identity — shed jobs at a pace not seen since the dot-com bust. But the layoffs were only part of the story. The deeper structural shift was remote work. Unlike manufacturing jobs that are tied to a factory, or healthcare jobs tied to a hospital, many technology and professional services roles proved fully portable during the pandemic. Workers who once commuted to offices in SoMa, the Financial District, or the Peninsula discovered they could do the same work from Austin, Denver, Nashville, or their home offices. Some companies embraced permanent remote or hybrid policies. Others quietly reduced their Bay Area headcounts by hiring replacements in lower-cost metros.

The physical evidence is visible in SF’s office vacancy rate, which by late 2025 had climbed above 35% in the city’s downtown core — among the highest in the nation. Empty office towers are not just a real estate problem; they represent thousands of jobs that no longer exist in the metro. The restaurants, dry cleaners, coffee shops, and transit systems that served those office workers have contracted in turn, creating a multiplier effect that extends well beyond the tech sector.

While San Francisco wrestles with its unfinished recovery, Los Angeles has quietly become one of the most underappreciated large-metro economies in the country. Its Hollywood reputation obscures a set of structural strengths that are genuinely unusual for a coastal metro of its size.

Manufacturing. LA’s 448,500 manufacturing jobs make it one of the largest factory metros in America — larger than Detroit (which has roughly 270,000 in its broader metro), larger than Cleveland, larger than most of the cities people associate with American industry. LA manufactures apparel, food products, fabricated metals, electronics, aerospace components, and plastics. Much of this production is done by small and mid-sized firms, not by a single dominant employer, which gives the sector a resilience that single-company factory towns lack.

Logistics. The ports of Los Angeles and Long Beach together handle approximately 40% of all containerized imports entering the United States. The trade, transportation, and utilities sector employs nearly 1.1 million people in the metro — 17.4% of total employment. This is not just dock workers; it is the vast hinterland of warehouses, trucking firms, customs brokers, freight forwarders, and intermodal rail yards that move goods from ship to shelf. No other American metro has a logistics operation of this scale.

Healthcare. At 1.34 million jobs, Education and Health Services is LA’s largest sector by far. The metro is home to world-class medical systems — UCLA Health, Cedars-Sinai, Kaiser Permanente Southern California, Providence — and a population of nearly 13 million that generates enormous healthcare demand. This sector is essentially recession-proof: people get sick regardless of the business cycle, and LA’s aging population ensures demand will only grow.

Entertainment and Information. LA’s Information sector, at 208,200 jobs, is the nation’s content production engine. While SF’s Information sector is dominated by software companies, LA’s is dominated by film studios, television production, streaming services, music labels, and video game developers. The Hollywood strikes of 2023 temporarily disrupted this sector, but the structural demand for content — driven by the streaming wars and global distribution — ensures its long-term relevance.