Op-Ed: L.A.’s middle class is gone. How do we rebuild it?
Of all the problems besetting Los Angeles, the most fundamental is this: It doesn’t have much of a middle class.
Like the nation as a whole, only more so, L.A.’s economy has morphed over the last half-century from one that featured widespread prosperity to one in which the pay is too damn low and the rent is too damn high. That was the conclusion of the real-estate website Zillow, which determined that L.A. ranked first among the 35 largest American cities last year in the percentage of income that residents with median-income levels had to pay, on average, for rent (49%; the national average was just 30%). Millions of Angelenos can barely afford to be Angelenos.
Just as the hollowing-out of the L.A. economy was partly caused by events beyond local control, so the rebuilding of an Angeleno middle class isn’t something that local leaders and residents can accomplish by themselves. But there are some things they can do that can surely help.
At the root of L.A.’s decline is that fact that, like the cities of the once industrial Midwest, it has de-industrialized — indeed, de-industrialized twice. In the 1970s and ‘80s, the L.A. area, which had been home to a concentration of auto factories second only to Michigan, saw them all close down, taking with them tens of thousands of unionized jobs that had been filled by a racially diverse work force. In the ‘90s, with the Cold War’s end, the local aerospace industry, which employed hundreds of thousands of unionized production workers and engineers, saw massive cutbacks from which it has never recovered.
In a 1985 survey conducted by the Los Angeles Area Chamber of Commerce, six of the dozen largest Southern California employers (both public and private) were aerospace manufacturers, ranging from Hughes Aircraft, which ranked second, with 65,704 employees, to Lockheed, which ranked twelfth, with 20,302 workers on its payroll.
The most plausible immediate hope for creating [local middle-class] jobs is a ballot measure being put together ... that would raise the county sales tax by a half-cent.
In 2014, just two of the top 20 L.A. County employers were aerospace manufacturers (or, indeed, manufacturers of any kind): Northrup Grumman, with 17,000 workers, and Boeing, with 10,500. Six of the top 10 were public sector (with L.A. County and the L.A. Unified School District topping the list). Government, hospital companies, universities and retail chains dominated the top 50.
Thus the public sector supports the largest part of what remains of the middle class. The number of such jobs was reduced in the wake of the 2008 crash, however, and has not yet returned to its pre-recession levels.
But the link between public spending and middle-class jobs in Los Angeles is not new. Even the great aerospace companies of the postwar boom, after all, were funded chiefly by taxpayer dollars funneled through the Defense Department.
The chief distinction between public- and private-sector jobs in today’s L.A. — and today’s United States — is that public-sector workers are unionized and have retained the power to bargain for wages and benefits, while workers in private-sector industries that were once largely unionized — construction and trucking, for instance — have lost that power, largely as a consequence of management’s hostility to worker power.
Where will the middle-class jobs of L.A.’s future — particularly, blue-collar jobs with decent pay and benefits — come from? Not likely from manufacturing, in which globalization and the expanding role of technology will suppress the number of jobs created. Hiking the minimum wage to $15 will raise incomes in service and retail jobs, but only to a yearly level of $25,000 to $30,000, assuming near full-time employment.
The most plausible immediate hope for creating such jobs is a ballot measure being put together for November’s election that would raise the county sales tax by a half-cent, which would generate $120 billion over the next 40 years for an ambitious program of rail and highway projects. Besides building numerous long-overdue rail lines — including one to LAX and another through Sepulveda Pass — the measure will generate many thousands of middle-income jobs. The Los Angeles County Economic Development Corporation estimates that Metro’s union-labor projects will employ 190,000 construction workers, and that when the economic multiplier effects of the project are tallied up, it will create a total of roughly 425,000 new jobs in the County.
Can L.A. rebuild its middle class? In November, voters can do their bit to help.
Harold Meyerson is executive editor of The American Prospect.
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