Hitting the Wall

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Despite Determination and Hard Work, Most Working Poor Don’t Advance

Land of opportunity? Not for hundreds of thousands of low-income Angelenos who are discovering that even in these golden economic times, working hard for six or seven bucks an hour won’t always lead to advancement.

It might just mean hitting a brick wall.

Even with L.A. County’s unemployment rate dropping from a peak of 10.2 percent in 1994 to the current 5.7 percent, the opportunities for those at the lower end are remarkably limited.

Consider:

– Of the five occupations in L.A. County that showed the greatest absolute job growth between 1992 and 1999, only two general office clerks and instructional aides were paid more than the $7.90 an hour that would keep a family of four out of poverty. The others below that $7.90 level are retail clerks, guards, and waiters.

– The average Mexican immigrant to California will make less than $300 a week if he starts working at 25 and will make barely more than that when he is 50.

– Of the 4.3 million people employed in L.A. County in 1998, an estimated 32 percent almost 700,000 live in poverty, making less than the $16,600 a year the federal government says is needed to keep a typical family fed, clothed and housed.

“As far as we can tell, there are far fewer ladders in this new economy,” said Paul Ong, professor of urban planning at UCLA. “The relative size of the middle class is declining. The rate of upward mobility of immigrants has slowed. That’s not to say there are no mobility ladders, there are. But do we have a sufficient number of opportunities for people entering the economy from the bottom of the workforce?”

Promises of advancement

For decades it was assumed that anyone who worked hard enough could better his situation and acquire those things that ensured middle-class stability: a house, a couple of cars, some time for vacation. More importantly, parents who worked and saved could provide opportunities for their children so they wouldn’t have to toil as hard as their parents did.

Sometimes, it still works out that way.

Thousands of businesses get started every year in L.A. with very little capital and lots of hard work. Dishwashers save enough to become restaurateurs, and gardeners go into business for themselves.

For many newly arrived immigrants, even a minimum-wage income of $12,500 represents an improvement over what they might expect in their countries of origin. At an annual salary of $16,600 (the poverty level for a family of four), many are actually able to send money back to family members still in their country of origin.

But what happens after their first few years of work in the United States? Lacking basic educational skills and often even the ability to speak English does a food preparer or janitor have the means to break out of the low-wage strata? And what happens should the economy take a downturn and layoffs are instituted among this low-wage group?

Complicating matters is the influx of Latinos who have come to Los Angeles in the last 30 years. In 1998, Latinos accounted for about 44 percent of L.A. County’s population, but 68 percent of its poor.

“When things are on an upswing, as they are now, we tend to ignore what’s going on in the trenches,” said Abel Valenzuela, associate director of the Center for the Study of Urban Poverty at UCLA. “We have lots of people in Los Angeles who started at the bottom and after years of toil are still at the bottom and that’s wrong.”

Los Angeles continues to have a significant number of manufacturing jobs, but the days are gone when those right out of high school could get hired in a plant with a unionized pay scale, health insurance and pension benefits. In their place are thousands of non-union jobs that pay little more than minimum wage and often are part-time.

More than ever, a person’s earning potential is directly related to his level of education. A study by the Public Policy Institute of California found that a native Californian male with a bachelor’s degree in 1969 earned almost 50 percent more than one with only a high school diploma. In 1997, it was nearly 70 percent more.

During that same period, mean weekly wages for native-born men with 15 years of work experience but no high school diploma fell by one-third, from $750 to $500.

“Thirty or 40 years ago, if your father didn’t have much of an education but graduated from high school and went to work in a blue-collar job, his prospects for upward mobility weren’t far-fetched,” said Valenzuela. “You could have two cars in the household, perhaps own your own house, and send your children to a state-run university. That dream still exists, but in far fewer numbers.”

For immigrants, especially those who are illegal, the prospects are especially uncertain. Someone recently arrived from Mexico or Central America is much less likely to see his wages increase during the course of his lifetime than are native-born Latinos.

‘Employers favor younger workers’

One of the reasons, according to labor economists and others, is that employers often prefer to see their older immigrant workers replaced with younger workers at lower wages. Why employ a 40-year-old dishwasher at 8 bucks an hour when you can get a 20-year-old one at $6?

“Most employers favor younger workers. As workers age in our industry, they make a little more money,” said Mike Garcia, president of the Service Employees International Union Local 1877, which represents 70 percent of the janitors in the large commercial properties in Los Angeles some 8,500 workers. “If a non-union contractor takes over a union building, they try to get rid of the older workers. It’s very common. Younger workers are newer to the country and are more vulnerable. They feel less able to fight for their rights.”

Under a contract signed in 1995, 5,000 unionized janitors who have had only individual health care benefits up until now will finally receive family health benefits as of Jan. 1.

That will be a relief to 34-year-old Dolores Martinez.

It took her almost five years to pay off a $9,000 bill for her youngest son when he was hospitalized with an infection. She came here from Mexico with her husband and two children 11 years ago, and has been working in a Westwood office building for the last seven years.

She works from 6 p.m. to 2:30 a.m. five days a week, commuting by bus an hour and a half each way from the family’s apartment in the Mid-Cities area. For the past five years she has been making $6.80 an hour, which translates to somewhere around $13,500 a year. She still manages to send $150 a month back home to her parents.

Latinos not well served

“I came to this country like everyone else, with the illusion I was going to make a lot of money,” she said. “But the reality is that time has gone by and we haven’t been able to save any money. In terms of my children, I don’t think the prospects for them are good, because there is less opportunity than for white children. But that’s what we’re fighting for.”

She says her oldest son, 17, works part-time while going to school and has dreams of becoming a doctor or lawyer. But the numbers aren’t in his favor.

School participation in California of native-born children of Mexican immigrants falls from 95 percent for 15-year-olds to 88 percent for 17-year-olds. For Mexican children who are immigrants themselves, the percentage falls during the same time frame from 85 percent to 62 percent.

“Most of the kids in the L.A. school system are Latino, and they are going to need jobs when they’re adults. They aren’t well served by the system,” said Mark Drayse, research director for the Economic Roundtable, an L.A. think tank. “Leaving aside the welfare issue, in L.A. we have two broad sets of job growth: good-wage, high-skilled technical positions and low-wage jobs in the service, manufacturing and retail industries. In virtually all of the (second set), there is limited potential for upward mobility.”

There are unsettling social and economic ramifications regarding this split. While adult immigrants may resign themselves to their fate, their children are less likely to be as acquiescent.

“My feeling is that there is the potential for social disorder and pressure in our time, especially in Los Angeles,” said Georges Vernez, director of the Center for Research on Immigration Policy at the Rand Corp.

As for the economy, some argue that having such a large percentage of the population unable to consume the goods being produced could lead to under-consumption. That is, too much output relative to the amount of demand, which hinders economic growth.

“The basic idea is that for the economy to prosper, there has to be adequate demand, which comes from consumer spending, government and corporate purchases and exports,” said James Devine, economics professor at Loyola Marymount University. “Consumption is the biggest part of this, around 70 percent. And consumption can slow because of low wages.”

Not all economists agree with that scenario and indeed, the situation in L.A. is considered by many to be unique to the rest of the country and not the basis for any national downturn.

Nonetheless, if there is a recession whatever the circumstance it will be those at the lowest rung, including all those who have moved off welfare into jobs over the past couple of years, who might well feel the pinch first.

“It would be a good idea to think of the social safety net before we get to that next recession,” said Deborah Reed, an economist with the Public Policy Institute of California. “The ramifications in terms of instability, of a higher crime rate, are hard to gauge. But depending on the time and place, how can there be massive income inequality without political instability?”

L.A. County Occupations With Largest Job Growth, 1992 – 1999

Many of the fastest-growing job categories pay low wages.

Median

Annual averages Change hourly

Occupation 1992 1999 Number Percent wage*

Retail Salespersons 113,130 123,350 10,220 9.0% $7.32

General Office Clerks 115,810 125,960 10,150 8.8 9.72

Security Guards 39,860 47,840 7,980 20.0 7.69

Waiters, Waitresses 56,970 63,630 6,660 11.7 5.35

Instructional Aides 44,990 51,260 6,270 13.9 8.79

Food-Preparation Workers 41,240 47,170 5,930 14.4 6.13

Light-Truck Drivers 37,190 42,920 5,730 15.4 9.55

Cashiers 68,320 73,940 5,620 8.2 6.49

Accountants, Auditors 35,600 41,220 5,620 15.8 18.00

General Managers, Top Executives 108,780 114,320 5,540 5.1 31.68

*Statewide average in Occupational Employment Statistics Survey, 1996-97 Source: California Employment Development Department

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