Confronting L.A.’s Economy, Past & Present

When Dan Flaming, the president of the Economic Roundtable research group, describes the tanking of the L.A. economy in the 1990s, he pinpoints the cause to the loss of thousands of aerospace jobs. However, he explains, it was only immigrant migration that rescued Los Angeles financially. The skills, hard work and entrepreneurial energy of the estimated 100,000 immigrants who came here each year between 1989 and 2000 fueled an informal, low wage economy that kept the city humming. (See Flaming discuss L.A.’s present economic climate in the interview above.)

Listen to podcast interview with Dan Flaming

While many people have blamed immigrants for job losses, it was actually the end of the Cold War and subsequent job cuts in aircraft and related industries that led nearly 1.5 million people to leave L.A. for other parts of the U.S.

In their place immigrants arrived and provided work that was completely legal, but often done for employers who skirted the law by paying off the grid — avoiding payroll taxes and offering no safety or health protections. Many industries reaped large profits from the work of these low wage employees in clothing manufacturing, restaurants, personal services and many other fields. This arrangement not only short-changed the workers themselves, but also local, state and federal governments that rely on taxes for services and retirement benefits.

Today in Los Angeles more than 800,000 people – many immigrants but also many native-born — labor full-time but earn less than $15 an hour; they represent 41 percent of the L.A. workforce. These workers occupy well over half of the jobs in our retail stores, hotels, apparel manufacturing, restaurant and home construction. Low wages, combined with the high cost of living in Los Angeles (the third most expensive major U.S. city to live in), create an entrenched poverty that impacts us all through delinquency and crime, inadequate education and child poverty.

“It’s the economy, stupid” was a phrase from a long-past presidential race. But it couldn’t be more true than it is today, with stark wage disparities and the disappearance of American middle-class jobs. Flaming points out that other prosperous, Western nations have built their economies on a more equitable basis. We could do it here as well.

View publications from the Economic Roundtable at http://www.economicrt.org/publications.html