By Andrew Edwards, Press-Telegram
The kind of employment that leads to financial success is getting harder to find.
Sure, there have always been tycoons who figure out how the world is going to change before anyone else does. Rockefeller had oil. Ford had the assembly line. Zuckerberg has data.
But extreme wealth is just that — extreme. People dream, if an old TV show is to be believed, of champagne and caviar. But if Americans really believe their own narratives, success for many has been defined as being in the middle.
OK, maybe the upper middle. Steak trumps hamburger.
But how does one attain — or keep — a traditional middle-class lifestyle when the jobs that used to get people in such a position have gone away?
“One of the reasons why you haven’t seen as much wage growth is due to the jobs that we’re generating,” said Jordan Levine of Beacon Economics, a Los Angeles research and consulting firm.
The way Levine sees it, California is becoming a “barbell economy” with relatively heavy job growth in high- and low-wage occupations while the middle gets squeezed.
But why? Levine contends California has become too expensive for employers to hire middle-wage workers. A lot of the blame for those high costs, he said, can be placed on the state environmental laws and other regulations that make California a more expensive state for doing business.
Besides employers’ direct costs of complying with state requirements, Levine said there is an indirect cost created by regulations and NIMBY-ism (Not In My Back Yard) that has driven up housing costs to a point where its too expensive for businesses to hire Californians, who require higher wages than their counterparts in other states simply to have a place to live.
“I think it’s something that’s going to be a long-term challenge, and it really comes down to the cost of living,” Levine said. “If you look at who’s moving out, it’s people making $50,000 or less.”
The decline of manufacturing employment, which shrank 18 percent in Los Angeles County from 2007 through 2013, is perhaps the trend most commonly associated with the vanishing middle class.
“The biggest place where you’re seeing that is the closure of the C-17 plant,” said Erick Serrato, deputy director of Long Beach-based Pacific Gateway Workforce Investment Network, a public agency created to help people find work. Its duties include sending counselors to job sites where major layoffs occur, pointing workers to new jobs or training that may help them switch careers.
“There are a lot of individuals who are facing new realities with their wages,” Serrato said. “What we do is try to connect them with a new area of the economy that’s growing,”
The five areas where Serrato said local job seekers may have the most success finding work are in health care, goods movement, advanced manufacturing, hospitality and retail and construction.
Official numbers bear out Levine’s assertion that the jobs being created tend not to be the ones that give people the means to live a comfortable lifestyle.
From 2007 to 2013, the last full year for which official data are available, the two private sector industries with the greatest rates of job growth in Los Angeles County were the health and education sector (45 percent) and leisure and hospitality (10 percent).
Nominal wages, that is the actual amounts, for Los Angeles County workers in the health and education sector, which includes doctors, nurses, teachers and home health aides, fell 6 percent to $810 per week, according to the state Employment Development Department.
In the traditionally low-paying leisure and hospitality sector, nominal wages rose 7 percent from 2007 to 2013, from $601 to $646 per week in Los Angeles County.
When inflation is taken into account, however, workers may as well have taken a pay cut; $647 in 2013 amounts to $575 in 2007 dollars.
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Low-paying jobs are among the ones that are projected to be the most in-demand in Los Angeles County.
The state’s Employment Development Department projects job openings for personal care aides, who earn roughly $21,000 per year, will exceed those for any other line of work until 2020.
Elba Ramos Gomez, 43, of Long Beach has been a home health care worker for 27 years. Gomez has two daughters and a husband who spends most of his time in Las Vegas to care for his ill father, she said.
At a wage that falls just short of $10 per hour, she said she sometimes has to choose between rent, groceries and utility bills and is rarely able to treat her 18- and 6-year old daughters to outings.
“You have to think, did I pay my bills or my rent? Can I buy food? Can I take my kids to the museum?,” she said.
Still, Gomez derives a great deal of personal satisfaction from caring for seniors, and this is what she said she tells people who are surprised to learn she commutes from Long Beach to La Mirada to care for her clients:
“I get in love with my seniors,” she said. “You are not doing it for the money.”
Only two job classifications among the top 10, in terms of projected job openings, come with annual salaries greater than $35,000. Those jobs would go to registered nurses and professionals at the general management level.
This is a trend that worries policy makers like Hasan Ikhrata, who is the executive director of the Southern California Association of Governments, an agency that oversees regional matters, such as planning transportation projects for most of Southern California.
Ikhrata said Los Angeles, Orange, Ventura, San Bernardino, Riverside and Imperial counties have regained the jobs lost during the recession, but some two-thirds of those jobs pay wages amounting to less than $22,000 per year.
“It’s not a good indication of the future. If people don’t make enough money to move to the middle class, to move the social ladder upwards, they’re not going to have enough money to buy a house. They’re not going to make money to buy a lot of stuff,” he said. “That’s going to affect the economy overall.”
Like Levine, Ikhrata put forth regulatory reform as being necessary to rebalance economic trends toward middle-income jobs. Ikhrata said current regulations result in infrastructure work taking some 17 years to complete.
Shaving five years from that time line, could save taxpayers billions of dollars and create more jobs for construction workers.
Meanwhile, as employment levels have grown in relatively low-paying occupations, some labor unions have lately focused much of their energies seeking to organize workers on the lower rungs of the ladder — such as hotel workers and Latino supermarkets in Long Beach — and retail and fast-food workers across the country.
Fact is, Americans now live and work in a country where the prospect of $9-an-hour retail jobs at Wal-Mart is the stuff of national news.
In Long Beach, union-aligned hotel workers persuaded voters to approvea minimum wage ballot measure in 2012. Measure N set what is now a $13.53 per hour wage for employees of large nonunion Long Beach hotels where workers do not exercise collective bargaining.
People in other industries, such as restaurants and home health services, are seeking similar gains.
Fast-food workers have held public rallies to demand a $15 per hour wage. Los Angeles’s City Council last year adopted a law increasing hotel workers’ wage there to $15.37 an hour. Hotel groups filed a federal lawsuit against the L.A. measure and business advocates have contended it will force hotels to lay off workers.
In Los Angeles County, United Long Term Care Workers are trying to win that kind of wage in newly-started negotiations with county officials.
Those currently making less than $10 an hour, including Gomez, often cannot afford basic necessities, said Melissa Uribe, a spokeswoman for the Service Employees International Union – United Long Term Care Workers.
“The most basic necessities that they need, making $9.65 an hour does not help them achieve,” she said.