Erasing Myths About South-Central

One of the awful consequences of Los Angeles’ 1992 riots is that in many minds it solidified the reputation of South-Central Los Angeles as a place to flee or avoid, not a place to go to or invest in. While it is certainly true that South-Central has some of the very serious problems that affect most other American inner cities, it also has a positive face that isn’t well-known or appreciated.

A new study prepared by Cal State Los Angeles economists dispels some of the myths about the area and shows that there is a viable economic base, more jobs than expected and a surprisingly low poverty rate. There are more manufacturing jobs there than in almost anywhere else in the region, although not enough to satisfy South-Central’s large population.

The Cal State L.A. study and organizations like Rebuild L.A. have found that in order to become more competitive in areas like South-Central, small and medium-size companies must work together to solve common problems. Dealing in combination, their clout and bargaining power grow.

South-Central of course needs economic development. It needs more banks and pharmacies and retail stores, more dry cleaners and youth employment and commercial development. That’s where public and private coordination comes in.

Government is making promises, and keeping some of them. The Clinton administration has funded a new economic development bank, set up by the city, to funnel new capital to businesses in depressed areas. If it works as planned, the development bank, in partnership with major private financial institutions like Bank of America, can spur the rebuilding of South-Central Los Angeles by helping entrepreneurs and investors who are willing to take the risk of doing business in a poor community.

Tax incentives are an obvious starting point. But there’s another powerful lure for investment in South-Central: Businesses are looking at a growing consumer market. On the industrial side, the owners of Casa Herrera, a South-Central firm that has been making machinery for tortilla factories for 35 years, can offer some positive figures.

The potential for South-Central is solid and ought to excite the interest of investors and companies looking to make the best use of their dollars.

One of the awful consequences of the 1992 riots is that in many minds they solidified the reputation of South-Central Los Angeles as a place to flee or avoid, not a place to go to or invest in. While it is certainly true that South-Central has some of the very serious problems that affect most other American inner cities, it also has a positive face that isn’t well-known or appreciated.

A new study prepared by Cal State Los Angeles economists dispels some of the myths about the area and shows that there is a viable economic base, more jobs than expected and a surprisingly low poverty rate. There are more manufacturing jobs there than almost anywhere else in the region, although not enough to satisfy South-Central’s large population.

The Cal State L.A. study and organizations like Rebuild L.A. have found that in order to become more competitive in areas like South-Central, small and medium-size companies must work together to solve common problems. Dealing in combination, their clout and bargaining power grow.

South-Central of course needs economic development. It needs more banks and pharmacies and retail stores, more dry cleaners and youth employment and commercial development. That’s where public and private coordination comes in.

Government is making promises, and keeping some of them. The Clinton administration has funded a new economic development bank, set up by the city, to funnel capital to businesses in depressed areas. If it works as planned, the development bank, in partnership with major private financial institutions can spur the rebuilding of South-Central Los Angeles by helping entrepreneurs and others who are willing to invest in the community. Minority-owned banks also have a key role to play here.

There’s another powerful lure for investment in South-Central: Businesses are looking at a growing consumer market. On the industrial side, the owners of Casa Herrera, a South-Central firm that has been making machinery for tortilla factories for 35 years, can offer some positive figures.

The potential for South-Central is solid and ought to excite the interest of investors and companies looking to make the best use of their dollars.

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Business Base

South- Central ranks second in number of jobs.

San Gabriel Valley: 418,454

South Central: 363,642

Burbank / Glendale / Pasadena: 320,008

Southeast (Downey/ Bellflower): 288,118

Sources: “County Business Patterns,” U.S. Bureau of the Census; Jack Kyser, Economic Development Corp of Los Angeles County