To Have and Have Not in L.A.

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While Los Angeles has a growing class of the ultra-rich who are distancing themselves from the mere wealthy, the traditional income gap between the rich and everyone else remains a significant issue on its own.


In fact, the area has seen its distribution of wealth become more unequal compared to the rest of the United States since the collapse of the defense industry in the early 1990s though that difference has reversed slightly over the past six years, according to a recent report by the UCLA Anderson Forecast.


The analysis notes that the slowdown in defense spending after the end of the Cold War was largely to blame for the loss of nearly 200,000 well-paying jobs that employed highly skilled technicians and engineers who were part of L.A.’s middle class.


“Some of these workers retired, others became self-employed and others migrated out of state. The reasons for migrating out of state relate to quality of life, cost of living, and economic opportunity,” according to the report by economist Jerry Nickelsburg, titled “Richer and Poorer: Income Inequality in Los Angeles.”


And as those skilled workers left Los Angeles, they were replaced by new immigrants with lower earning power. However, over the past six years job growth in higher paying service jobs in sectors such as construction, education, technical services and finance has helped reduce the gap, though it remains larger than the U.S. as a whole.


Nickelsburg warns, however, that immigrant workers may not be able to continue filling these jobs, forcing employers to recruit or move outside the area, unless public policies promote technical training for non-college trained workers. No doing so, he contends, could have drastic consequences.


“This trend in job creation, and the rapidity of the hollowing out of the middle class in the 90s, has very definite implications for policy and planning in Los Angeles in the coming years,” he writes. “A failure to respond to the challenge of preparing the next generation of middle class service workers can easily thrust L.A. back to developing country inequality levels.”

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