Employee Income of Aerospace & Defense Industry Cluster
In Los Angeles County, the average worker in the Aerospace & Defense industry cluster (“Aerospace”) makes nearly twice as much as the average worker in any occupation. In addition, the Aerospace industry cluster’s average wage of $120,153 in 2017 is more than four times the 2017 living wage ($28,163) needed for a single individual to cover their basic needs in Los Angeles County.
What is the Aerospace & Defense industry cluster?
The Aerospace industry cluster is composed of two industries: Aerospace Products and Parts Manufacturing (NAICS 3364) and Search, Detection, Navigation, Guidance, Aeronautical and Nautical System and Instrument Manufacturing (NAICS 334511) per the Institute for Applied Economics at the LAEDC (March 2016). The cluster provides Los Angeles County with “a foundation for the advancement of technology, intellectual property and scientific discovery” (LAEDC, n.d.). For more information about the Aerospace industry cluster, read the LAEDC report here.
What is an industry cluster?
An industry cluster is “a regional concentration of related industries in a particular location. Clusters are a striking feature of economies, making regions uniquely competitive for jobs and private investment. They consist of companies, suppliers, and service providers, as well as government agencies and other institutions that provide specialized training and education, information, research, and technical support” (Institute for Strategy and Competitiveness, Harvard Business School, n.d.).
There are two types of industry clusters: traded and local. A traded cluster serves markets beyond the region in which they are located. Economists recognize traded clusters as “engines” of regional economies that allow a region to reach high levels of overall economic performance. A local cluster, on the other hand, only serves the local market in which the region is located.
Average annual income was calculated in nominal wage by taking the weighted average of all private wages in the selected NAICS industries. NAICS industries were selected by using the definition of the industry cluster produced by the Cluster Mapping Project (CMP) developed by the Harvard Business School. Annual living wage is determined by the MIT Living Wage Calculator under the assumption that an individual works full-time at 2,080 hours a year.