SPECIAL REPORT * Though some L.A. areas are being called 'trade losers,' experts say . . . : A Success Story Is in the Making

By ANNE-MARIE O’CONNOR

June 28, 1998 12 AM PT

TIMES STAFF WRITER

Jessica Maes did not just witness the wrenching economic upheaval wrought by the flight of Los Angeles’ heavy industry, she lived it.

Her brother lost a $15-an-hour union job. Her city, Huntington Park, lost economic muscle, as did 18 other areas, according to a new study, when “deindustrialization” swept 200,000 jobs out of the Alameda Corridor and left cities like Huntington Park stranded in a Southern California rust belt.

Maes still remembers commiserating about hard times when her buddy Larry Flores delivered fresh tortillas to the store where she then worked as a grocery checker.

Today Maes, Huntington Park’s first Latina mayor, is presiding over its revitalization. She is talking to Home Depot about building a 120,000-square-foot store on the lot where her brother’s abandoned drill bit factory stands, silent and gray, like an empty shell.

Flores, now a self-made millionaire, no longer delivers tortillas. But in a stroke of marketing genius, his supermarket now delivers his customers--many of them Latino immigrants with no cars--to their homes, along with the groceries they purchased from his store. His slogan is: “Shop with us, and we’ll take you home.”

Maes and entrepreneurs like Flores are presiding over the “reindustrialization” of Huntington Park, one of 19 Los Angeles County areas that a recent UC Santa Cruz study deemed “trade losers” because they have lost jobs without getting a share of the prosperity that global trade has brought 19 “trade winner” areas in the county.

Some hope that market forces, like those at work in Maes’ community, can turn the losers into winners. Harry Pachon of the Tomas Rivera Policy Institute, a Latino think tank, compares Huntington Park’s bustling business district, Pacific Boulevard, to Calle Ocho, the Miami street where many Cuban American millionaires got their U.S. start.

“There has been an economic miracle in Southern California,” Pachon said. “Small business is providing a lot of opportunity, and a lot of those businesses rely on immigrant labor. It is reaching a critical mass in communities like Huntington Park.”

Pachon believes that many success stories like Maes’ will radiate not only out of Pacific Boulevard, but also from Valley Boulevard--the “Calle Ocho” of Monterey Park’s Asian Americans--just as they did from Miami’s Little Havana.

“It is no longer far-fetched to find a mayor who began as a cashier, or a restaurant owner who starts a chain of Mexican restaurants,” he said.

Manuel Pastor, the author of the UC Santa Cruz study, is not so sure. The new jobs are mainly minimum- or low-wage, providing “reason for cautious optimism and worry,” he said. “One needs to worry about the quality of employment.”

According to Pastor’s study, international trade is becoming the lifeblood of Los Angeles, but its bounties are flowing largely to educated, mostly white areas.

These communities--including Santa Monica, Culver City and Beverly Hills--are on a fast track that has left the “trade losers”--from East Los Angeles to South-Central, Compton, Cudahy and Maywood--in their dust, widening the gap between rich and poor in Southern California, says Pastor, chairman of Latin American and Latino studies at the university.

“It is disproportionately Anglo areas that gain from international trade and disproportionately minority areas that suffer,” Pastor’s study said. “This new ground zero for the international economy has also been ground zero for inequality and social tension.

“What will be interesting will be whether those neighborhoods will be able to get on the train, because it’s whizzing through their neighborhoods,” he said.

One of the tickets is education. The trade winners are boosted by highly skilled jobs in entertainment and in high-tech industries with booming exports, Pastor says.

When large plants such as Firestone, Goodyear and General Motors closed their doors, they rolled up the ladders to upward mobility for many blue-collar families. Those union jobs paid good salaries, benefits and pensions, propelling even those with little education to homeownership and the middle class.

The low-wage service jobs proliferating in their wake offer no direct path to upward mobility. On this new playing field, Pastor says, education is a powerful dividing line between the haves and the have-nots--an ominous assessment at a time when higher education is becoming more expensive, public schools are underperforming, and Los Angeles’ Latino high school students are dropping out at high rates.

Education Seen as Key

Some immigrant parents see the writing on the wall.

For Huntington Park High School junior Alberto Perez, 18, such warnings are a family mantra. His parents work in garment industry jobs that are low paying at best and sweatshops at worst. But they refuse to let him work after school so he can study.

“They say, ‘We are giving you everything so you can succeed.’ It makes you want to get ahead, so you don’t end up like your parents,” said Perez, who came from Mexico as a child and just completed his first year out of bilingual education. He is looking at a career--computer programming--where his evolving English won’t hold him back.

“They say, ‘We sacrificed to bring you here for the opportunities,’ ” said Maria Gonzalez, 17, a Mexican-born junior in her second year of English-only classes after years of bilingual education. Gonzalez wants to be a psychologist.

“Here, one chooses one’s life,” she said, repeating an American ideal that is often an empty conceit in U.S. inner cities. Many of her fellow students have dropped out of high school to help support their families. Others have joined gangs.

Mayor Maes is familiar with the forces that cull youths from the path to success. She grew up with 26 family members under one roof and got on the low-wage treadmill after high school. Her administration started after-school tutoring for disadvantaged youths and appeals to business organizations for college and trade school scholarships.

“I know what I went through, and I want to help them,” Maes said of her city’s young people.

Maes too sees hope in the economic recovery.

In the 1960s, during the “white flight” that followed the Watts riots, Pacific Boulevard was a ghost town of boarded-up businesses.

“It was spooky,” she said.

Then came the layoffs of the ‘70s and ‘80s. In 1980, a Rand study called the city an urban disaster. Maes, by then a real estate broker, had to tell prospective buyers they couldn’t afford homes because credit checks showed that their factories would soon close--though workers had not been notified.

“They would say, ‘No, I can’t believe it,’ ” she said. “I saw their suffering. It killed me. I wonder where some of them are now.”

Demographic Shift

Experts say the “ethnic recycling” of the industrial belt--Huntington Park was 4.5% Latino in 1960--was accelerated by globalization, which removed good union jobs at big local employers, like Firestone, which is now a unit of Tokyo’s Bridgestone Corp. In three short years between 1980 and 1983, 157,000 manufacturing jobs were lost in California. The end of the Cold War a decade later brought more cutbacks, in aerospace.

The economic downturn left affordable housing for immigrants, who moved in and brought cheap labor and high demand for consumer goods and health services.

The 19% of the “trade losers” who were black may have suffered multiple losses. Many remaining good jobs--as carpenters, construction workers and janitors--were taken over by immigrants. New drug laws, which penalized crack users more than cocaine users, gave more black men stigmatizing prison records.

But had immigrants not filled the vacuum, much of inner-city Los Angeles would be as desolate as the formerly industrial corridors of Midwestern cities, said Jonathan Goldhill, vice president of the Huntington Park Business Assistance Center.

The immigrants “are creating the new economy,” he said.

The demographic and economic transformation also has ushered in a growing demand for Latino leadership.

Maes’ election broke ground in a city where a cadre of white officials kept a firm grip until as late as 1990 and fractious police relations with the Latino community hit a low with the alleged torture of a 17-year-old Salvadoran burglary suspect in 1987. Nearby Maywood is on its second Latino mayor, Margarita Ruvalcaba.

Maes’ administration launched a job creation program and offered $1,000 micro-loans for auto shops and beauty parlors. Some, like the floral industry, are home-based, solving the day-care problem for many parents. If officially supported, tiny home-based businesses join the official economy and pay for taxes and business licenses, Maes said.

Maes implemented ironfisted code enforcement, giving her city a look that is usually the luxury of more affluent neighborhoods. If residents complain that new immigrants are hanging laundry outside or littering, she holds Spanish-language meetings with immigrant families. Many come from rural areas where washing machines and consumer waste are rare.

Today, Huntington Park’s 60,000 citizens are 93% Latino with a median age of 24. Pacific Boulevard is eclipsing downtown’s Broadway as the most popular shopping hub for Southern California Latinos.

Carlos Bonaparte has a 24-hour complex, El Gallo Giro--with a restaurant, tortilla factory, and butcher and bakery on Pacific Boulevard. He was among the businessmen who left Broadway after the 1992 riots. His 10-year-old Huntington Park flagship, opened in 1988, yields the biggest sales volume of his six-location chain, which grosses $18 million.

The advantage of Pacific Boulevard, Bonaparte said, is that it is surrounded by one of Los Angeles’ densest residential neighborhoods. The venue employs 100 people, making Bonaparte one of the city’s biggest employers.

Most workers make between $6 and $8 an hour, but the best-paid management staff members are largely recruited from the Latino rank and file, he said. And in April, all 400 employees of his chain got a health plan.

“This is a big step. We are very proud of it,” Bonaparte said. “Our company has given Latinos a lot of opportunities they wouldn’t get elsewhere. We want to encourage our better employees to stay with us.”

Business Picture

California’s small businesses have traditionally provided opportunity for those who feel excluded from mainstream institutions.

In 1990, California edged out New York as the home of the “largest number of successful black entrepreneurs” compiled by Black Enterprise magazine. And a lion’s share of Working Woman’s A-list of female firms is also in California.

Whether these businesses generate real prosperity for workers--as unionized industry did--will depend partly on whether they can tap the immense profits of the global marketplace, Pastor said.

“The real key is developing export capacity,” he said.

Daniel Villanueva, managing director of Bastion Capitol Corp., an equity fund specializing in Latino investment prospects, said many Latino food enterprises are poised to go global, as older leadership hands over direction to aggressive young heirs interested in mergers, acquisitions and public offerings.

“It’s going to create more jobs and benefits,” he said. “They’re the ones who are going to lead us out of this mess.”

The immigrants’ “plight is inseparable from” the city’s, he said. “Only if they prosper will the city prosper.”

Mercado Latino, a $100-million-grossing family-owned grocery wholesaler based in another “trade loser,” the City of Industry, already exports. Many of its 500 workers are immigrants from Latin America and Asia who live in places like Huntington Park.

Mercado Latino imports Mexican brands for U.S. Latino consumers and exports food products to Latin America. Their biggest exports are the religious candles they manufacture, according to George Rodriguez, the firm’s chief financial officer.

“The Mexican consumer prefers goods from the United States,” he said.

His workers’ salaries start above minimum wage, he said. There is health insurance, a 401(k) plan and paid vacations. He too promotes from within, “because you end up with extremely loyal, hard-working employees.”

He also chairs the Boy Scouts of San Gabriel Valley.

“As the Latino population grows, there’s a need for people to spend time with Latino kids,” he said. “Mom and Dad go to work, and the kid’s all alone. The temptation to join gangs is tremendous.

“The potential is great, but it’s not going to happen automatically,” he said. “People have to invest in the future.”

If policymakers do not try to correct the inequities of globalization, Manuel Pastor says, they can expect showdowns like the rain of opposition that snuffed out President Clinton’s 1997 congressional bid for broader latitude to negotiate future free trade accords. Opponents said the North American Free Trade Agreement with Canada and Mexico has moved U.S. jobs abroad in search of low wages and lax environmental laws.

“There will be resistance, tying the hands of the president, if there is a widespread perception that the costs and benefits are not shared equally,” Pastor said.

Next: How the residents of so-called loser cities are turning to private schools to turn their children into “winners.”

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Globalization’s Impact

A UC Santa Cruz study identifying Los Angeles communities as trade “losers” or “winners” found that educated, predominantly white neighborhoods are benefiting disproportionately from the shift to global trade, threatening to further widen the gap between rich and poor.

Some Trade Losers

Boyle Heights

Burbank

Carson

Compton

Downtown L.A.

East L.A.

Hawthorne

Huntington Park

La Puente

Lynwood

Pacoima