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Title: Left Behind: Workers and Their Families in a Changing Los Angeles

Citation Type: Miscellaneous

Publication Year: 2006

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Abstract: For generations, Los Angeles has been known as a place whereone could go to achieve the American dream. Not long ago,this dream was easily realized in Los Angeles. Californiasmost populous county was once a place where jobs broughtthe middle-class lifestyle within reach of anyone who workedhard. Such jobs formed the foundation of Los Angelesprosperity and enabled the county to become one of the mostvibrant places in California.Over the past few decades, however, economic anddemographic changes have recast the landscape of the LosAngeles economy.1 Today, low-wage jobs have replaced manyof the jobs that once provided a gateway to a middle-class life.As the countys labor market has changed, many Los Angelesworkers and their families have been left behind. Job growthin Los Angeles has lagged that of the rest of the state, and thegap between the wages earned by workers in Los Angelesand the rest of California has widened considerably. As LosAngeles enters the twenty-fi rst century, its promise of the goodlife has faded. Workers tend to have lower wages, familiestend to have lower incomes, and residents have a higher rateof poverty in Los Angeles than in the rest of the state.It is unclear whether Los Angeles will continue to fall behindthe rest of California in the future. However, given the sheersize of the Los Angeles labor market with more than one infour of Californias workers (27.3 percent), and more workersthan 42 states economic trends in Los Angeles will havean extensive impact on the state and nation.2 This reportexamines how Los Angeles workers and their families havefared relative to their counterparts in the rest of California asthe countys labor market has changed. This report fi nds that:Los Angeles Was at the Center of the Bustand on the Periphery of the BoomLos Angeles was at the center of the bust in the early 1990sand on the periphery of the boom in the late 1990s. As a result,job growth in the county has fallen behind that of the rest ofthe state. The recession of the early 1990s resulted in joblosses in nearly every major sector in Los Angeles. Between1990 and 1995, the number of Los Angeles jobs declined by9.4 percent (389,100). In contrast, the number of jobs in therest of California increased by 3.7 percent. Although the boomof the late 1990s led to job growth in Los Angeles, the countysgains fell far short of those of the rest of the state. Between1995 and 2000, the number of jobs in Los Angeles increased by 8.7 percent (325,500) less than half the increase in the rest ofthe state (20.1 percent). Ultimately, over the last decade and ahalf, the number of jobs in Los Angeles declined by 2.8 percent(115,500), while the number of jobs in the rest of the stateincreased by a substantial 28.5 percent (2,386,100).Los Angeles Economic Base Has ShiftedIn recent decades, manufacturing which once formed the coreof Los Angeles economic base has declined considerably,and the service sector has expanded in its place.3 This shifthas increased the share of jobs in low-wage industries anddiminished the number of well-paying jobs available to workerswith relatively low levels of educational attainment. Additionally,the composition of Los Angeles manufacturing sector has beentransformed. Although jobs in both durable and non-durablegoods manufacturing declined during this period, job losses indurable goods were far more severe. Consequently, non-durablegoods jobs, which tend to have lower wages, have gainedincreased prominence in the countys manufacturing sector.The Composition of the Los Angeles LaborForce Has ChangedThe composition of the Los Angeles labor force has changeddramatically in recent decades. While the majority of LosAngeles workers (58.8 percent) were white in 1979, no singleethnic or racial group constituted a majority in 2005. Thecountys workers have become more ethnically and raciallydiverse largely due to the rising number of Latino and Asianworkers. Between 1979 and 2005, Latinos share of the LosAngeles labor force more than doubled, increasing from 22.7percent to 45.5 percent, while Asians share of the countysworkforce nearly doubled, rising from 7.8 percent to 15.0percent. The increasing diversity of the Los Angeles workforcealso refl ects immigration.4 During the 1980s and 1990s, thenumber of foreign-born workers in the Los Angeles workforceincreased by more than 900,000.While Los Angeles workers were more likely to have higherlevels of educational attainment in 2005 than they were in 1979,more than one-fi fth of the countys workforce (22.2 percent)had not completed high school, essentially the same share as in1979. It is particularly noteworthy that the share of workers inLos Angeles without a high school degree has not increased inlight of the large increase in the number of immigrant and Latinoworkers, who tend to have low levels of educational attainment.In 2005, 38.5 percent of Los Angeles foreign-born workers and45.1 percent of Los Angeles Latino workers had not completedhigh school.Los Angeles Workforce CharacteristicsDiffer Markedly from Those of the Rest ofthe StateThe Los Angeles workforce differs markedly from thatof the rest of the state. In 2005, nearly half of the LosAngeles workforce (45.5 percent) was Latino, compared toapproximately one-quarter of the workforce in the rest of thestate (28.1 percent). In addition, half of Los Angeles workers(50.5 percent) were born outside of the US, compared toless than one-third of the rest of the states workers (31.3percent). Los Angeles workers also tend to have low levels ofeducational attainment relative to workers in the rest of thestate. More than one in every fi ve workers (22.2 percent) inLos Angeles had not completed high school in 2005, comparedto approximately one in eight workers (13.2 percent) in the restof the state.The Wage Gap Between Los Angeles andthe Rest of California Has WidenedThe typical Los Angeles workers earnings have lost purchasingpower since 1979. Between 1979 and 2005, the infl ationadjustedhourly wage of the typical worker the worker at themiddle of the earnings distribution decreased by 6.4 percent.In contrast, the wage of the typical worker in the rest of thestate increased by 5.9 percent during the same period, afteradjusting for infl ation. As a result, the gap between the wagesof the typical Los Angeles worker and the typical worker in restof the state has widened considerably. In 2005, the typical LosAngeles worker earned 83.3 cents for every dollar earned byhis or her counterpart in the rest of the state, down from 94.3cents for every dollar in 1979.Ethnic Wage Disparities Have Widened, theGender Gap Has NarrowedThe typical Los Angeles Latino workers wage also has lostpurchasing power, widening the gap between Latino andwhite workers earnings. In 2005, the typical Latino workerearned 50.0 cents for every dollar earned by his or her whitecounterpart, down from 66.7 cents in 1979. Over the sameperiod, the gender gap in Los Angeles narrowed. Much of thisnarrowing has resulted from the declining purchasing powerof male workers wages. Between 1979 and 2005, the typicalmale workers wage declined by nearly one-fi fth (19.2 percent),while the typical female workers wage increased by 12.8percent, after adjusting for infl ation.The Share of Workers with Job-BasedBenefits Has DeclinedLos Angeles workers are increasingly less likely to have jobbasedhealth coverage. Between 1979 and 2004, the share ofthe countys workers with job-based health coverage declinedfrom 71.1 percent to 50.5 percent. Over the same period, theshare of workers in the rest of the state with job-based healthcoverage fell from 74.0 percent to 61.3 percent. A relativelysmaller share of the Los Angeles workforce had job-basedhealth coverage in 2004 compared to the rest of the statesworkforce at least in part because of the growing prevalenceof low-wage jobs in the county, which are less likely to offerhealth coverage.Los Angeles workers also were less likely to have a job-basedpension plan in 2004. Fewer than two in fi ve workers (37.2percent) had a job-based pension plan in 2004, down fromnearly half of all workers (48.8 percent) in 1979. The shareof workers in the rest of the state with job-based pensioncoverage decreased as well, from 55.6 percent in 1979 to justunder half (47.1 percent) in 2004.Incomes Are Lower and Poverty Is MorePrevalent in Los AngelesGiven that Los Angeles workers wages tend to be lowerthan those of workers in the rest of California, the typical LosAngeles income also is lower and poverty is more prevalent.The median family income the income of the family exactlyat the middle of the income distribution was $50,598 inLos Angeles in 2004, 13.3 percent lower than in California asa whole. In addition, 38.9 percent of Los Angeles residentshad incomes below twice the federal poverty level in 2004,compared to 29.9 percent of residents of the rest of the state.

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Authors: Ross, Jean; Anderson Garcia, Alissa; Carroll, David

Publisher: California Budget Project

Data Collections: IPUMS USA

Topics: Family and Marriage, Labor Force and Occupational Structure, Migration and Immigration

Countries: United States