It's not your imagination. Economic life is tougher in L.A. for the average resident.
A new report concludes that income growth for blue-collar and service workers, who compose the lion's share of Los Angeles wage earners, has gone down in the decade between 2005 and 2015. The period includes the Great Recession (2007 to 2009) and the subsequent era of supposed economic recovery. The Apartment List analysis, “As Knowledge Workers Thrive, Blue-Collar and Service Sectors Left Behind,” found that when growth in housing costs was taken into account, working-class Angelenos are faring worse.
Los Angeles has a huge working class — bigger than in most cities — that has been walloped by a housing crisis that has seen a recent annual increase of people living on the streets of 23 percent. Rising rents, low vacancy rates and high housing demand add up to a need for 551,807 more affordable units in the county, according to the California Housing Partnership Corporation.
According to Apartment List, which parsed federal Bureau of Labor Statistics data, blue-collar workers who aren't service employees compose about 1 in 4 income earners in Greater L.A. Service workers make up about half of the workforce. Accounting for housing costs, blue-collar income decreased nearly 3 percent between 2005 and 2015; service-worker income decreased 9.4 percent.
“As the cost of rent has risen significantly, wages for working families have not kept up, resulting in significant economic uncertainty, residential displacement and homelessness,” Roy Samaan, senior research and policy analyst at the labor-affiliated group Los Angeles Alliance for a New Economy, said via email.
At the same time, “Post-rent wages for knowledge workers increased by 7.3 percent over the past decade,” according to Apartment List. “Knowledge-worker employment increased by 14.1 percent.”
The report defines knowledge workers as educated professionals in engineering, health care, management and the like. The data reflects the area's growing gulf between rich and poor. Sydney Bennet, a content marketing associate at Apartment List, says that while employment and pay for knowledge workers have grown, the core of L.A.'s workforce has been hit hard by flat income and rising rents.
“A lot of job growth nationwide and in L.A. in the past decade was driven by knowledge-worker employment,” she says. “But the average worker may have seen wages decline. And Los Angeles rents have jumped so much that they're extremely unaffordable for a lot of low-wage workers.”
She prescribes solutions we've heard before: Increase the production of new housing, particularly for low-income residents; increase pay for low-income workers; and improve public transportation so workers can live in affordable neighborhoods that are sometimes farther away.
LAANE's Samaan agreed: “In order to create more equitable cities, elected officials at both the national and local levels should prioritize policies that increase wages for working families, strengthen existing rent-control laws and build more affordable housing. This will ensure that the people who make our cities run can also afford to live and thrive in them.”