A City Consumed by Self-Interest

Born amid riots and recession, the 1990s consensus on subordinating narrow self-interest to hold Los Angeles together is disintegrating. The collapse can be seen in public-employee strikes, a police department in near-disarray, a largely uninspired leadership class and an all but absent business elite. As a result, the region, despite its strong economy, enters the new century without the civic leadership and social cohesion that the challenges ahead require.

Although never formalized, the ‘90s consensus, which followed the breakdown of the liberal coalition built by Mayor Tom Bradley, linked private-sector unions, middle-class Valley residents, Jews, an emerging Latino political class and the remnants of L.A.’s business elite. It was largely Mayor Richard Riordan’s creation, and, for a time, it worked reasonably well.

The new consensus helped rescue the city from the divisive racial aftermath of the Rodney G. King police beating and ’92 riots, the effects of a deep recession and, at the county level, a “near-death experience” on the edge of bankruptcy. The city became more hospitable to entrepreneurs, chiefly through the efforts of the mayor’s “business teams.” Several important projects--Staples Center, Disney Hall and the new cathedral--got off the ground.

The county, led by increasingly pragmatic liberals like Supervisor Zev Yaroslavsky, discovered fiscal discipline and the advantages of boosting the private economy. Perhaps most important, the crime rate dropped dramatically in the city and throughout the county.

Yet, during the past year or so, the consensus has started to unravel. Prosperity has become the problem, as middle- and low-wage workers, with the backing of most political leaders, have sought to get their share of the spoils of a vibrant economy. Low-wage workers, including janitors and hotel workers, organized and won some significant victories, with deservedly strong public support.

The union drive, however, has taken a more divisive turn. In strikes against the Metropolitan Transportation Authority and L.A. County, unions have, in effect, targeted the public, not corporations. Although labor and its allies like to portray these conflicts as a struggle for working-class rights, the reality is more complex. These job actions essentially pit relatively well-compensated public-sector workers against both the middle class, who pick up the bills, and, inadvertently, the working poor and poor, who receive the bulk of their services.

That the city must enter into a consent decree with the U.S. Justice Department to avoid a civil-rights suit against its police department is another sign of breakdown. Enlarging the police force to fight crime and burnishing the LAPD’s image formed the centerpiece of Riordan’s first mayoral campaign. They are central to his legacy. But the Rampart corruption scandal has changed all that.

Ultimately, the end of the ‘90s consensus may stoke growing pressure to break up Los Angeles. Although Riordan was largely elected by the Valley, which accounts for roughly half the city electorate, his inability to bring down significantly the cost of government, particularly in comparison with neighboring cities, his kowtowing to city unions and the humiliation of the once-proud LAPD may embolden secessionists.

The failure of Riordan and other political leaders to reform the public sector represents the biggest single factor undermining the ‘90s consensus. In the understandings reached in the fiscal crisis of the mid-’90s, the city and the county agreed to limit layoffs of public employees in exchange for wage concessions. Although nearly 400,000 Angelenos in the private sector lost their jobs, only a few thousand public workers lost theirs.

Now, with private-sector workers, particularly those in high-skill professions, reaping huge income gains and public treasuries bulging with surpluses, public-sector employees, whose members, overall, enjoy salaries roughly $9,000 higher than the county median, have become increasingly militant in their demands for higher wages and better fringe benefits. The unions’ militancy stems from their rapidly growing political power and influence, particularly at the city level. The election of numerous former labor officials to state legislative offices underscores labor’s political ascendancy regionally.

So great is public-employee union power in the city that even politicians who previously portrayed themselves as champions of middle-class taxpayers, such as Riordan and Councilman Joel Wachs, have flinched when facing the union juggernaut. “Joel thinks we should stand up to the unions,” explains one Wachs supporter. “It’s just that he doesn’t want to be the one to do it.”

One reason for their meekness is the utter inability of private-sector interests to present an alternative to labor’s agenda. Instead of standing up for taxpayers and the entrepreneurial class, most business leaders, particularly real-estate speculators and developers, seem content to rely on well-placed lobbyists who can steer their projects through the bureaucracy and the labor-controlled politicians.

Riordan’s pedaling in France while MTA buses sat parked aptly symbolized the attitude of a business elite that has abandoned its interest in keeping government accountable. Among the richest of Angelenos, moreover, there is a noblesse oblige that renders them incapable of standing up for a greater public good against anyone claiming to represent the poor or dispossessed.

The absence of organized business groups compounds the timidity. There really is no strong regional voice for business, with the possible exception of the L.A. Economic Development Corp. The L.A. Chamber of Commerce, once a power, has become something of a joke, ignored by most businesspeople and the media.

In contrast, unions have become increasingly adept at telling their story to the press and the public. Central to their narrative is the assertion that public workers now represent the core of L.A.’s middle class. Widespread acceptance of this view has enabled bus drivers and rail operators, for example, to win sympathy. In a stunning and effective example of this, the United Transportation Union allied with left-wing activists in the Bus Riders Union and convinced many in the media and the public that the average transit rider, who, on average, makes roughly one-third as much as the drivers, are in “solidarity” with the strikers.

The Service Employees International Union Local 660 is spinning a similar story in its fight against the county. In its political formulation, L.A. has largely become a city of poor people, mostly Latino and African American, and the affluent, predominantly Anglo people living on the Westside. Support for public-employee strikers, the logic goes, is the only way to ensure that there is still some semblance of a middle class left in the city.

This tactic ignores a central economic truth: The key to a city’s socioeconomic health is its private-sector-oriented middle class. Although the evolution of the digital economy in Los Angeles, as well as in other large urban areas, has exacerbated class divisions in the private sector, public employees still constitute only one-fifth of the city’s middle class. The remainder work in the private economy, sometimes earning more than their public-sector counterparts, but frequently with far less job security and often without the same kind of generous benefits.

The union strategy of urging cities and public agencies to “save” the middle class by accommodating public workers’ demands also has the effect of raising the cost of public services, which leads to higher taxes and business flight. “If you think that your middle class is all public employees,” says urban historian Fred Siegel, “that’s what you will end up with.”

L.A.’s private-sector middle class, which increasingly cuts across racial lines, has few champions in the political class. It was Cardinal Roger M. Mahony, not a politician, who persuaded county workers to suspend their strike and return to their jobs while contract negotiations continue. Still, perhaps the middle class’ last line of defense is county supervisors, including liberals Yvonne Braithwaite Burke, Gloria Molina and Yaroslavsky. Entrenched in office and arguably the most respected leaders in three of L.A.’s most important ethnic communities, these supervisors, in alliance with their two conservative counterparts, are drawing a line in the sand in favor of fiscal prudence and, at the same time, working to preserve some degree of efficient service for the poor, as well.

Although class-warfare enthusiasts close to County Federation of Labor chief Miguel Contreras portray the current strikes as akin to the labor struggles of the 1930s, the supervisors know better. The UTU and SEIU actions are not aimed at right-wing fat cats, although some top MTA and county bureaucrats might be considered overpaid. Instead, they unintentionally target a predominantly liberal public and, most tragically, the poorest citizens. This is not “solidarity forever,” but “give me what I want and damn the consequences.”

The need for a new consensus among the city’s political and business leadership, the middle class and unions is urgent. If not addressed soon, this region is likely to fall ever more into relative decline, with consequences that ultimately no Angeleno will be able to fully escape. *