The High Cost of Getting By in the Golden State
Ian Macdonald wants to do his part to help prop up our nation’s economy. But the 35-year-old advertising copywriter has been out of work for most of the past year, and his actress wife--who is expecting their first child next month--was idled for six months by last year’s actors’ strike.
“The president, the governor, the mayor. Everybody’s saying, ‘Please spend. Please spend.’ We’re saying ‘Spend what?’ I’m holding on to everything I have,” Macdonald says. “I’m worried about the economy, like everybody else. But we’ve been hurting all along. My family’s already feeling the squeeze.”
Until recently, the big picture of our state’s economy has been one of prosperity. The entrepreneurs, dot-com millionaires, big-money entertainment types have stoked not just our economy, but our collective dreams. But for legions of middle-class Californians, there is a different, less glamorous, reality.
“It really isn’t about living in mansions in Beverly Hills or driving a sports car,” said Macdonald, who is struggling to pay the $1,500 monthly mortgage on his Hollywood home. “It’s literally about getting by.”
And getting by is getting harder for many of California’s families.
It costs about $7,000 more a year today for a family to live modestly than it did two years ago. That’s according to the “Making Ends Meet” annual report by the California Budget Project, which details the climbing costs that devour family budgets and the failure of wages to keep pace.
A family of four--two working parents, two children--now needs an annual income of more than $52,000 to make ends meet, according to the nonprofit research group, which studies how public policies affect low-and middle-income Californians. That means both parents must make at least $12.50 an hour to be able to afford the rent on a modest apartment, car payments and maintenance, child care, food, clothing, health insurance and other basics.
A bank teller and a construction worker? They’re not quite making it, with a median combined income of about $50,000 annually. A preschool teacher and a restaurant cook? Their salaries--about $44,000 a year--fall short by $8,000. A cashier and a security guard? They’ll need another $15,000. For single parents, the threshold is higher. A single parent with two children needs a job that pays $20 an hour to earn the $43,000 it takes them to live comfortably. Schoolteachers, social workers, secretaries, police officers--their salaries put them on the margins of economic stability.
Even if they are able to make ends meet, home ownership for most of these families is but a dream. Stock portfolios, family vacations, saving for college, putting money away for retirement--those are unaffordable luxuries.
And things stand to get worse for low-wage workers, as the effects of the terrorist-induced recession ripple through our economy, affecting industries from tourism to construction to retail. Already, in Los Angeles, thousands of workers in travel-related companies have lost their jobs or had their hours cut.
Hundreds of airport workers--from janitors to baggage handlers to parking attendants--were laid off last week because new, tighter airport security left the LAX concourses and parking areas virtually empty. And airport director Joyce Kennard says up to 12,000 airport workers--and 40,000 employees whose jobs are linked to LAX--may be out of work by late fall.
Sure, jobs will be created by this crisis in other industries. Security, for instance. Security firms say they could hire 10,000 people immediately to fill the new demand by businesses beefing up security. But those jobs pay a paltry $8 an hour, more of the same for unskilled workers; hardly enough to support a family.
Until now, we’ve allowed rosy job-growth statistics to mask the struggle of many working families. We’ve led the nation in the growth of new jobs--yet we’ve lagged behind the rest of the country in pulling families out of poverty.
While we’ve been patting ourselves on the back for our robust economy, the combined forces of a high cost of living and a glut of low-paying jobs have left too many breadwinners in jobs that pay too little to sustain a family.
Many people--janitors, construction workers, store clerks, truck drivers, health-care workers--are in jobs that are actually paying less than they did a decade ago when salaries are adjusted for inflation. And while more people across the country are working their way out of poverty, the percentage of California workers earning poverty-level wages was higher last year than it was 10 years ago.
Still, we are nothing if not resilient in the Golden State. In fact, despite the depression in hourly wages, family income continues to rise because family members are working harder to keep from losing ground. The average married couple with children worked 185 hours more a year during the late 1990s, than they did a decade before. That’s the equivalent of an extra month each year.
It is that kind of effort that will help us weather this challenge to our economy. But we need to do more. Our immigration policies, our health-care system, our tax structure, our public schools, all the forces that shape our workforce should be on the table as we plot our recovery. Because it takes more than human capital to fashion an economy.
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Sandy Banks’ column runs Sundays and Tuesdays. Her e-mail address is sandy.banks@latimes.com.
