New Census Data Paints Mixed Economic Picture Of L.A. County
Labor Desk
September 03, 2007
Despite Small Gains in Income, Millions of L.A. Residents Cannot Meet Basic Needs Long-Term Growth in Poorly Paid Service Sector Jobs Fuels High Poverty Rates.
Los Angeles — A new report based on the latest data from the U.S. Census Bureau offers a mixed economic picture of Los Angeles County. Despite small gains in income in 2006, L.A.’s economy is still failing to provide adequate incomes to millions of residents.
The report, which supplements the Census figures released this morning with data from several other studies, shows that nearly 40 percent of county residents do not earn enough to meet their basic needs, close to one third of full-time workers earn less than $25,000 a year and more than 20 percent of children live in extreme poverty. This situation is aggravated further by low rates of health insurance and some of the nation's highest housing prices. Latinos and African Americans are most likely to be poor, with rates almost three times as great as those of non-Hispanic whites.
The Census data contain some encouraging news: median household income in L.A. County edged up slightly in 2006 and family poverty rates decreased slightly over the previous year. Household income in the county has caught up to where it was in 2000, the peak of the last economic expansion, while the state and nation still lag behind where they were.
Nevertheless, L.A. County residents continue to fare worse than those in the state and nation as a whole. The typical county worker's hourly wage is 9 percent less than the typical California worker and 4 percent less than the typical U.S. worker. The steady erosion of manufacturing jobs and the rapid growth of low-wage service sector industries have solidified the county’s status as one of the nation’s capitals of working poverty.
Los Angeles cannot be a truly great city when millions of residents are unable to provide a decent life for their families,” said Madeline Janis, executive director of the Los Angeles Alliance for a New Economy (LAANE), which released the report with the Partnership for Working Families (PWF). “We must face this challenge head on and find innovative ways to create shared prosperity.”
Employment growth projections suggest that low incomes, high poverty and inadequate health coverage will continue to plague large numbers of L.A. County residents unless measures are taken to improve job quality. Five of the ten occupations projected to produce the most new jobs offer meager wages, and jobs in several growing sectors are likely to lack health insurance. By contrast, the county’s manufacturing sector, which once provided stable middle-class employment to large numbers of workers, lost more than 170,000 jobs between 1996 and 2006. The percentage of county residents with job-based health insurance declined eight percentage points from 2001 to 2005, while there has been a nine percent increase in the number of uninsured.
While noting that increases in the state minimum wage, enactment of living wage policies and successful union organizing drives have improved conditions for some workers, the report concludes that far more needs to be done to overcome the region’s staggering levels of economic deprivation. Indeed, increases in the state’s minimum wage have failed to help workers make up much ground, with the purchasing power of the state’s minimum wage (which was raised to $7.50 in 2007) still 28 percent below its 1968 value.
The study calls upon businesses to invest in their workforce and support policies that expand opportunity, labor unions to rededicate themselves to raising standards through organizing workers, and policymakers to prioritize education and pursue strategies to help raise wages in growing low-wage industries.
The prevalence of poverty and low-wage jobs has implications for all the region’s residents and institutions,” said Janis. “It affects our schools, our neighborhoods, our ability to attract quality businesses and our health system. But if we work together, we can overcome these problems and transform Los Angeles into a symbol of hope and opportunity.”
LAANE is a nonprofit organization that has authored numerous studies on poverty, wages and economic development. PWF is a national organization and sponsor of the California Research Project, a network of regional organizations studying the status of working families with assistance from the Washington D.C.-based Economic Policy Institute. Three other California organizations also released regional analyses of poverty and jobs today in San Diego, San Jose and the East Bay (see below for contacts).
To read “Poverty, Jobs and the L.A. Economy,” please visit www.laane.org.
Los Angeles — A new report based on the latest data from the U.S. Census Bureau offers a mixed economic picture of Los Angeles County. Despite small gains in income in 2006, L.A.’s economy is still failing to provide adequate incomes to millions of residents.
The report, which supplements the Census figures released this morning with data from several other studies, shows that nearly 40 percent of county residents do not earn enough to meet their basic needs, close to one third of full-time workers earn less than $25,000 a year and more than 20 percent of children live in extreme poverty. This situation is aggravated further by low rates of health insurance and some of the nation's highest housing prices. Latinos and African Americans are most likely to be poor, with rates almost three times as great as those of non-Hispanic whites.
The Census data contain some encouraging news: median household income in L.A. County edged up slightly in 2006 and family poverty rates decreased slightly over the previous year. Household income in the county has caught up to where it was in 2000, the peak of the last economic expansion, while the state and nation still lag behind where they were.
Nevertheless, L.A. County residents continue to fare worse than those in the state and nation as a whole. The typical county worker's hourly wage is 9 percent less than the typical California worker and 4 percent less than the typical U.S. worker. The steady erosion of manufacturing jobs and the rapid growth of low-wage service sector industries have solidified the county’s status as one of the nation’s capitals of working poverty.
Los Angeles cannot be a truly great city when millions of residents are unable to provide a decent life for their families,” said Madeline Janis, executive director of the Los Angeles Alliance for a New Economy (LAANE), which released the report with the Partnership for Working Families (PWF). “We must face this challenge head on and find innovative ways to create shared prosperity.”
Employment growth projections suggest that low incomes, high poverty and inadequate health coverage will continue to plague large numbers of L.A. County residents unless measures are taken to improve job quality. Five of the ten occupations projected to produce the most new jobs offer meager wages, and jobs in several growing sectors are likely to lack health insurance. By contrast, the county’s manufacturing sector, which once provided stable middle-class employment to large numbers of workers, lost more than 170,000 jobs between 1996 and 2006. The percentage of county residents with job-based health insurance declined eight percentage points from 2001 to 2005, while there has been a nine percent increase in the number of uninsured.
While noting that increases in the state minimum wage, enactment of living wage policies and successful union organizing drives have improved conditions for some workers, the report concludes that far more needs to be done to overcome the region’s staggering levels of economic deprivation. Indeed, increases in the state’s minimum wage have failed to help workers make up much ground, with the purchasing power of the state’s minimum wage (which was raised to $7.50 in 2007) still 28 percent below its 1968 value.
The study calls upon businesses to invest in their workforce and support policies that expand opportunity, labor unions to rededicate themselves to raising standards through organizing workers, and policymakers to prioritize education and pursue strategies to help raise wages in growing low-wage industries.
The prevalence of poverty and low-wage jobs has implications for all the region’s residents and institutions,” said Janis. “It affects our schools, our neighborhoods, our ability to attract quality businesses and our health system. But if we work together, we can overcome these problems and transform Los Angeles into a symbol of hope and opportunity.”
LAANE is a nonprofit organization that has authored numerous studies on poverty, wages and economic development. PWF is a national organization and sponsor of the California Research Project, a network of regional organizations studying the status of working families with assistance from the Washington D.C.-based Economic Policy Institute. Three other California organizations also released regional analyses of poverty and jobs today in San Diego, San Jose and the East Bay (see below for contacts).
To read “Poverty, Jobs and the L.A. Economy,” please visit www.laane.org.
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