Tough Times Have Grown Even Tougher : Economy: In the eight months since The Times last analyzed the local impact of the recession, the downturn’s effect has swollen to a torrent of despair.
In the gray of a winter morning, as downtown Long Beach began to stir, a group of bleary-eyed people gathered outside the glass doors of a yellow brick office building and waited.
Hilton Hotels had announced it was hiring staff for its gleaming new downtown hotel, and the eye-catching advertisement beckoned the jobless to come out Dec. 2 and join “the winning team.”
They did. Four thousand secretaries, engineers, typists, salespeople, accountants, college students, senior citizens, handymen and out-of-work parents burdened by debt lined up to apply for a scant 250 jobs.
By noon, traffic was jammed around the building and the line snaked around the block. For four hours, people waited to interview for jobs as bellhops, maids, front-desk clerks and doormen--jobs many would not have considered five years ago, maybe not even five months ago.
“When we gave people jobs, they started crying and hugging and kissing us like we had just given them the greatest gift,” said Valerie Truesdale, the Hilton’s human resources director. “It was really sad. We had a gal, 24 years old, who was making $23 an hour as a shift supervisor for McDonnell Douglas. . . . Now she’s standing in line for a job that pays $4.50 an hour.”
Eight months ago, the odds were that if you lived in southeast Los Angeles County and worked in anything but aerospace or manufacturing, the recession was little more than a distant threat. Most people had yet to feel the pinch, national leaders were predicting rosy times just ahead, and economists said there were plenty of jobs to be found if people lowered their standards a bit.
But the recession that was supposed to go away is only getting worse. In the Southeast and Long Beach areas--home to some of the state’s poorest residents--thousands more people are out of work, fewer companies are hiring, and welfare rolls are swelling.
The manufacturing industry has been hammered. Businesses are leaving the state for cheaper property and less burdensome regulations. With each closure, every layoff, the walls close in. Indeed, the so-called trickle-down effect more closely resembles a torrent that has washed over large and small businesses alike and sent local economies reeling. Many cities and schools started the year with empty cupboards, and the prospects for the next two years are grim.
“I don’t see the light at the end of the tunnel,” said Leslie Levin, a Huntington Park manufacturer who has watched his business shrivel up. “The only thing I see is an express train coming down the other end.”
The aerospace and manufacturing industries, the backbones of the Southeast economy, are shadows of what they once were.
About 10,000 manufacturing jobs--most within the aerospace industry--were lost between June and October. Still officially uncounted are the 280 jobs that will be eliminated when the Golden West oil refinery in Santa Fe Springs shuts down in February due to the poor economy and the high cost of meeting state environmental standards.
Companies like McDonnell Douglas are shedding hundreds of employees each month and shifting others to lower-paying positions. In the last six months, 2,200 Douglas employees have lost their jobs; an additional 3,800 jobs could be axed by the summer of 1993.
“I thought that when I hired on (with Douglas) I’d be there for a long time; now I am out the door and there is nowhere to go,” machine operator Alec Price said. “There are just no jobs out there.”
After four years on the job, Price, 28, will work his last day at Douglas on Jan. 24. After that he, his wife and 5-year-old son will move to Carson City, Nev., where Price hopes to get a job on a construction site. Unemployment has continued to climb in every Southeast community in the last six months, with seven cities recording double-digit jobless rates in October. The unemployment average in southeast Los Angeles County was 8.8% in October, compared to the county average of 7.8%.
But unemployment countywide runs much higher than the statistics reflect. In October, almost 41,000 county residents exhausted their 26 weeks of benefits and their names were removed from the rolls, compared to 27,000 in October of 1990.
Still more startling is the cost of retraining the waves of laid-off workers. Ted Williamson, a manager with the Southeast Los Angeles County Private Industry Council, said that every July the council receives about $160,000 from the state to provide job training to laid-off workers in Cerritos, Lakewood, Bellflower, Hawaiian Gardens, Downey and Norwalk. The money usually lasts about nine months, he said. This year, it was gone in about 30 days.
“We are definitely in a crisis situation,” Williamson said. “There is a whole new population of laid-off workers.”
The double whammy of rising unemployment and the shrinking job pool have driven Southeast residents to welfare lines in record numbers. More people are flocking to social service agencies for food handouts and winter clothing at a time when few are giving.
Lupe Macker, executive director of Catholic Charities, which serves Long Beach and southeast Los Angeles County, said donations are down about 40%. The agency has been forced to shift its resources from self-help programs such as counseling to emergency food and shelter services. In Bell Gardens, the number of people coming to the Human Services Assn. for bags of beans, rice and other staples has doubled since July.
“Our dollars are being stretched to the limit,” director Barbra Hernandez said. “There are so many more folks coming in, and food prices are going up. At some point we may have to turn people away.”
With more people out of work and many spending less, sales tax revenue has plunged almost overnight. Sales tax revenue in the cities of Artesia, Bell, Bell Gardens, Bellflower, Commerce, Cudahy, Hawaiian Gardens, Huntington Park, La Mirada, Lynwood, Montebello, Norwalk, Pico Rivera, Signal Hill, Vernon and Whittier was down an average 49% from January to July, 1991, compared with the same period in 1990, according to Hinderlater, de Llamas and Associates, a Glendora-based firm that monitors local government revenues.
Automobile dealerships, once large cash cows that kept cities financially fed, continue to go belly up, with two dealerships folding in September. Since November, 1990, 12 automobile franchises have closed in southeast Los Angeles County.
Many city leaders have imposed hiring freezes, stalled employee raises and are eyeballing cuts in everything from park programs to tree-trimming as ways to save a buck.
In Long Beach, despite budget cuts and tax increases, the city took in $7 million less than it spent from July, 1990, to June, 1991. Administrators are predicting that 1992 will be one of the toughest years the city will face. City departments are being asked to cut their already tight budgets by another 5% and to forgo filling all but critical job openings.
In Norwalk, the City Council voted to lay off 10 employees, including three who help keep kids out of gangs. Downey city leaders froze 52 vacant municipal jobs and will not give its employees raises this year.
But cuts have not been enough. Residents in many communities are now paying more for utilities, trash collection, landscaping and street cleaning. Cudahy landlords pay the city $30 a year for every apartment unit they rent, and South Gate city leaders are mulling over proposals to build a medical-waste incinerator or a detention home for parolees in a desperate bid for cash.
Schools and universities are faring no better. Cal State Long Beach officials laid off more than 500 full- and part-time lecturers, canceled hundreds of classes, benched the football team indefinitely and have resorted to using volunteers to teach some courses.
Librarians, art programs, musical instruments and recreation programs have been stripped from the budgets of some school districts. What is left is no-frills education where teachers buy supplies, volunteers staff programs, and--at the nearly broke Montebello Unified School District--band members had to borrow marching tubas from another high school because they could not afford their own.
“It’s the meat and bone routine,” said Glenn Sheppard, acting business manager of the Montebello Unified School District. “You’ve got to cut to the bone, and then you still have to cut more.”
Not everyone is hurting, of course. New construction in Pico Rivera was up 5% over last year. Cerritos, where the Auto Square and shopping mall boomed for years before the recession, has a healthy reserve. Commerce and Bell Gardens have golden gooses--large, well-established card casinos that draw customers in good and bad times. Commerce also has been the industrial breadbasket of the Southeast, and although manufacturing has been hit hard by the souring economy, city officials say they have enough business to weather the recession.
“We have not reached a point of worrying a lot,” Commerce City Manager Louis Shepard said.
Indeed, most Southeast area residents are working, some are still buying cars, eating dinner out four times a week and keeping their regular appointments with the manicurist. But today, chances are that most Southeast residents know someone who is out of work, and even those with secure incomes say they are less inclined to whip out their credit cards, deciding instead to set aside a few dollars a month.
UCLA economics forecasters predict that the economy will not regain its strength until 1994. Even then many of the jobs that have been cut will never come back. A recent report by the Southern California Assn. of Governments predicts that 1992 will bring more job layoffs and further deterioration of the manufacturing, aerospace and construction industries. With the recession apparently settling down for a longer stay than expected, many people are battening down the hatches.
In a gritty industrial section of Huntington Park, Leslie Levin rolls his wheelchair through a nearly deserted corrugated furniture veneering plant. Levin’s 40 employees are on holiday vacation and the sawmill is silent.
Levin’s business is to provide other manufacturers with laminated hardwood and plywood components that eventually end up as office furniture, home furniture and higher-end architectural design work.
But with the glut of office buildings--office vacancy rates are nearly twice the norm--and a sputtering real estate market with little new home construction, Levin is facing one of his toughest years.
“The office furniture market is dead . . . and the home furnishing market has disappeared,” Levin said matter-of-factly. “We had a great third quarter, but on Nov. 1 it was like someone turned the lights off. No one wanted the stuff. Now we are just limping along.”
The recession is not the sole cause of Levin’s woes, but at a time when most businesses are juggling rising costs, it has not helped. Levin said that at the same time demand for his veneered wood has dropped, he is being slammed with more bills. His water bill went up 100%, his electricity bill jumped from $20,000 a month to $33,000 and his annual business license fee skyrocketed from $300 to $4,500 a year.
“This year we will be thrilled to break even,” Levin said. “We need new construction of houses and people to buy them. We need office buildings to fill up. Neither of those things are happening.”
In the meantime, Levin said he will continue to manufacture standard stock whether the orders come in or not, just to keep his employees working.
“I’ve got to keep my crew employed,” he said. “I cannot allow my plant to shut down. . . . Right now we’re prepared for a year’s tough living.”
Times staff writers Howard Blume, Rick Holguin, Gerald Faris, Bettina Boxall and community correspondents Marilyn Heck and Suzan Schill contributed to this report.
Southeast/Long Beach Unemployment
Unemployment is up almost everywhere in the greater Los Angeles area, according to a comparison of the unemployment rates in October, 1989, 1990 and 1991 .
Cities 1989 1990 1991 Artesia 3.0 4.4 5.6 Bell 5.1 7.4 9.3 Bell Gardens 7.0 10.1 12.5 Bellflower 4.1 5.9 7.5 Cerritos 2.0 3.0 3.8 Commerce 5.1 7.5 9.4 Compton 8.9 12.7 15.7 Cudahy 7.8 11.2 13.9 Downey 3.5 5.1 6.4 Huntington Park 6.4 9.3 11.6 Lakewood 3.4 5.0 6.3 La Mirada 3.6 5.3 6.7 Long Beach 4.1 6.0 7.5 Lynwood 6.0 8.8 11.0 Maywood 6.0 8.7 10.8 Montebello 3.7 5.4 6.9 Norwalk 4.3 6.3 7.9 Paramount 5.8 8.4 10.5 Pico Rivera 4.9 7.1 9.0 Santa Fe Springs 4.7 6.4 8.6 South Gate 4.8 6.5 8.8 Whittier 3.1 4.3 5.8 Los Angeles County 4.2% 6.2% 7.8%
Source: State of California, Employment Development Department, Employment Data and Research Division
Jobless Toll
The number of people in Los Angeles County who exhausted their unemployment benefits has gone up every month in which figures were available for this two-year comparison.
Month 1990 1991 January 22,816 28,657 February 23,387 29,902 March 23,842 31,105 April 24,220 32,804 May 24,115 34,638 June 24,270 36,120 July 24,519 36,076 August 25,802 38,423 September 26,025 39,525 October 27,150 40,799 November 27,401 N/A December 28,297 N/A
Source: Labor Market Information, California Employment Development Department
Public Assistance in Southeast L.A.
The welfare rolls are growing, according to statistics gauging the demand for public assistance programs administered by Los Angeles County. The three prinicipal programs are Aid to Families with Dependent Children (AFDC), General Relief and Food Stamps. AFDC is paid to parents of minor children. General Relief is a $341 monthly payment that goes to single adults who do not qualify for other forms of government aid. Food stamps are usually issued in conjunction with other welfare programs. The figures below show the number of people in selected cities receiving the three types of relief in September, 1989; August, 1990, and July, 1991, the most recent month for which figures were available.
General Relief/ Aid to Families Food Stamps City ’89 ’90 ’91 ’89 ’90 ’91 Artesia 558 638 730 69 72 89 Bell 3,118 3,670 4,428 456 544 673 Bell Gardens 5,171 5,524 6,093 908 1,073 1,327 Bellflower 3,023 3,445 3,907 359 360 446 Cerritos 510 644 735 51 60 74 Commerce 1,028 1,135 1,283 227 254 314 Compton 18,777 20,485 22,654 1,820 2,122 2,626 Cudahy 3,149 2,666 2,968 546 520 642 Downey 2,948 3,346 3,701 390 428 531 Huntington Park 5,261 5,471 6,501 936 997 1,233 Lakewood 2,203 1,983 2,174 292 273 336 La Mirada 726 809 909 55 63 78 Long Beach 49,359 50,510 55,610 4,776 4,757 5,881 Lynwood 6,985 7,298 8,048 1,063 1,115 1,379 Maywood 2,575 2,695 3,265 558 527 651 Montebello 5,027 5,436 6,025 755 876 1,082 Norwalk 4,777 5,758 6,589 658 785 971 Paramount 4,491 4,456 4,825 777 906 1,120 Pico Rivera 4,701 4,604 5,024 620 545 673 Santa Fe Springs 1,156 1,231 1,389 109 114 140 South Gate 6,786 6,869 7,631 1,310 1,328 1,639 Whittier 2,771 3,174 3,595 389 365 451
Source: Los Angeles County Department of Social Services
