Face of Recession : Southlanders Testify on the Slump’s Human Toll

The face of Southern California’s economic distress presented itself at an unusual congressional hearing in Los Angeles on Monday, and it was as diverse as the region itself. There were ex-gang members in baseball caps, unemployed aerospace workers in suits, homeless families with wailing children in tow and well-dressed would-be home buyers.

All of these people, who might rarely share a conversation in ordinary life, shared the podium in the daylong hearing to paint a rare composite portrait of the region’s lingering recession.

They sounded a common chorus of demand: Help keeping a roof over their heads, food in their bellies, the chance to see a doctor when they’re sick--and a way to retain their hope of pursuing the American dream.

None of these things can be taken for granted anymore, testified a parade of characters who formed a real-life echo of “Grand Canyon,” Lawrence Kasdan’s Zeitgeist film on cross-class malaise in ‘90s Los Angeles.

The hearing was sponsored by Rep. Henry B. Gonzalez (D-Tex.), chairman of the House Banking Committee. The 30-year congressional veteran from San Antonio has been holding meetings nationwide to drum up support for his community development funding bill.

What these gatherings--in Bridgeport, Conn., Spartanburg, S.C., Baltimore, Cleveland and Los Angeles--have produced is a woeful collection of tales of economic suffering, the sad detritus of the recession.

At Patriotic Hall downtown, surrounded by faded flags and battle paraphernalia from past conflicts, Rep. Maxine Waters (D-Los Angeles) and Rep. Esteban Torres (D-Pico Rivera) joined Gonzalez in calling for distribution of the “peace dividend”--the savings from defense cutbacks that are adversely affecting California’s economy.

A group of ex-gang members told the committee that they have found no peace in the streets, where 771 gang-related homicides took place last year, and no dividends in the current economic climate.

The group, decked out in earrings, caps and heavy jackets, were accompanied by former NFL star Jim Brown, who described his efforts to nurture their self-respect and job skills. But jobs for these men are few and far between.

Anthony (De Nice) Harris, 23, a former Grape Street Gang member who served time for dealing drugs, testified that he doesn’t have a job and can’t afford to finish high school until he does.

Even if he got a degree, he isn’t sure work would be there for him. Harris said his mother and grandfather used to work at a factory in South-Central Los Angeles, but the plant now seems to hire people from outside the area.

“I doubt if brothers like me could get a job,” he said.

Jon Goodman, a business professor at USC, told the panel that many higher-paying manufacturing jobs are disappearing from Southern California. She said the ratio of mostly low-paying service jobs to better-paying manufacturing jobs has shifted from 2-to-1 in 1970 to 5-to-1 today.

“No longer is it possible to earn a middle-class wage standing on an assembly line,” Goodman said,

She pointed out that California is in some ways worse off than other depressed regions Gonzalez has visited because its diverse economy, once considered a strength, has become a weakness.

“Los Angeles has bad luck. Half of the industries that make up its job creation drive are in the tank at the same time: agriculture, aerospace, light manufacturing, entertainment, banking and so on,” Goodman said.

California lost 240,000 jobs in January, according to government figures, putting its unemployment rate at 8.1%, well above the national 7.1%.

“The problem is, these jobs are not coming back,” Goodman added. She said she expected “little cheer” in the coming year because she believes that California is not just going through a recession, but fundamental structural changes in its economy.

Others complained that high prices in Southern California are making the American dream of home ownership just that--a dream.

Donna Spenser, a 29-year-old electrical engineer, testified that she and her husband have been living a Spartan existence since they married 2 1/2 years ago. Despite this, they have been unable to save enough for a down payment on the $200,000 house their joint $75,000 income says they should be able to afford. She can’t get an FHA loan because those are limited to house values that are unrealistically low for the California market.

“We live in one room at my in-laws’ home,” Spenser said. “We have no vacations, no privacy, no social life, all in an effort to buy a home. To think we tried to do all the right things and it’s still not enough is hard to swallow.”

But the Spensers are better off than several homeless or formerly homeless people who testified that they were unable to obtain public housing. In Los Angeles County, public housing is under such severe strain that 110,500 people are on the Housing Authority’s Section 8 waiting list.

One is Silviano Jimenez, who with his wife and nine children is squeezed into a one-bedroom apartment and collects bottles to pay for food. They are on a waiting list for public housing, but no units large enough are available. Jimenez, who was asked to testify after his plight was reported in The Times, volunteered to split his family in two to take two smaller units, but that wasn’t possible either.

Even the middle class is feeling pinched. Michael Lido, who was laid off as an aerospace contractor in May, testified that he has had to raid his retirement fund--absorbing huge penalties for early withdrawals--to pay health bills. The experience has left him angry and bewildered.

“It wasn’t like our division wasn’t doing good, that we weren’t producing,” he said. “After 20 years, you think you do your job well, everything will be OK. Then all of a sudden you have everything get up and leave.”

The committee also heard concerns about the impact of the proposed merger of Bank of America Corp. and Security Pacific Corp. The merger, the largest in banking history, could eliminate 20,000 jobs, half of them in Los Angeles.

Gilda Haas, director of Communities for Accountable Reinvestment, criticized the banks’ record of lending to minority communities. She also said a merger would lead to branch closures in underserved, low-income neighborhoods.