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Los Angeles Workers are on Life Support with high cost of living and low income

Income and cost of living in Los Angeles do not equate. Unions provide a stable force in the growing informal business sectors that pay low wages in spite of increasing cost of living.

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"The cost of living in Los Angeles is 48 percent higher than the national average, but per capita income falls just below the national average. And what’s worse, we’re making less headway in raising residents’ income than California or the nation," reports Daniel Flaming of the nonprofit Economic Roundtable.

A recent study by the Economic Roundtable found that union workers in Los Angeles County earn an average of 27% more than nonunion workers in the same job, a figure that does not include differences in other types of compensation like health insurance. The differential is highest in the service sector, where unionized workers earn 64% more than their nonunion counterparts.

A quarter of L.A.’s households gets by on less than $25,000 a year, and another quarter gets by on more than $100,000 a year – but there is a long, lonely stretch in between these two extremes. The household in the middle of L.A.’s income distribution has an annual income of $51,315. But this is not at the top of a bell-shaped curve. It’s the low point in a trough between the extremes of our polarized economy. And it’s this middle area that is being filled in by union workers.

40% of L.A.’s union workers earns $25,000 to $30,000 a year.

40% earns $30,000 to $60,000 a year.

These clerical workers, bus drivers, teachers and nurses are filling in the missing middle in L.A.’s labor market. Without the wage boost that their unions give them, many would be on the fringes of poverty, or worse.

Part of the problem in Los Angeles is our vast and growing informal sector. Our population has grown 16 percent since the collapse of aerospace in 1990, but we still have fewer jobs in our formal economy than we did then. Under-the-table jobs have become L.A.’s growth engine in such areas as car washes, lawn care, room additions and restaurants.

Growing Industry Sectors in LA's Economy

Health Care and Social Assistance
Private Households
Retail Trade
Food Services
Information
Fire
Construction
Arts, Entertainment and Recreation

Holding Their Own

Security Guards
Repair Services
Private Education
Wholesale Trade

Losing Jobs

Durable Manufacturing
Nondurable Manufacturing
Employment Services
Transportation and Warehousing
Professional and Technical Services
Regional Offices

Daniel Flaming is president of the Economic Roundtable, a non-profit public policy research organization in Los Angeles.

Edited by Carolyn Allen
| employment | Los Angeles |

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