Economists often study and categorize businesses by sector. Businesses operate in certain spheres, like new car dealerships. We more narrowly categorize groups of these kinds of businesses as “industries” like the insurance industry or the banking industry. But a great deal of useful economic data is reported at the sector level. Sectors refer to the part of our economy where similar industries are grouped together into larger economic units. For example, the banking and insurance industries are subsets of the Finance, Insurance, and Real Estate (FIRE) sector. Today we will explore the different sectors of the Coachella Valley economy, concentrating on city-by-city and sector-by-sector comparisons of average annual employment wages in each sector.
This graph shows the average annual wages for employment in each employment sector for the nine cities of the Coachella Valley for the year 2021 (CA EDD). The bolder black outlines designate the city with the highest wages for that sector. Blank cells represent the city’s sectors that either do not have adequate data or represent sectors with just a few businesses that would jeopardize privacy if reported.
A closer inspection shows a wide range in wages per sector and between cities. There are definitely some outliers here, perhaps a function of inadequate or false data, or a small number of specialized businesses that skew the data. The outliers in Indian Wells for Finance, Insurance, and Real Estate and Leisure and Hospitality are not surprising given the demographics of that small city. Logistics in Rancho Mirage must be a small number of specialized businesses from this sector along with Palm Springs and its surprisingly high Manufacturing wages.
Most importantly, wages differ greatly between sectors. And unfortunately for our valley, the sectors with the most employment are also the sectors with the lowest wages. Leisure and hospitality account for approximately 26% of the jobs. By contrast, Finance, Insurance, and Real Estate account for only about 6% of jobs. 
Here is a map showing each of the city’s highest-paying employment sectors. For the most part, these jobs represent a relatively small percentage of the total employment in each city.
The Coachella Valley, like some economic regions, relies too much on low-paying employment sectors. Moreover, these sectors are hit hardest during economic slowdowns. Many such regions are working hard to diversify their economies. But the majority of these regions have one central city or at most several cities working in concert to diversify. The Coachella Valley is rather unique in having nine independent, competing cities in a comparatively small regional population. But this is not an excuse. Rather, it is a call to work even harder. CVEP steadfastly believes that when we work regionally, highlighting the unique strengths of each of our distinctive communities, everyone wins. An improved regional economy benefits all.
