Study Debunks Some Myths of L.A. Economy

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True or false: “Since 2000, the rich in the L.A. area are getting richer and the poor are getting poorer.”


If you answered “true,” then you’ve succumbed to one of the numerous “economic myths” common in discussions of the Southern California economy, according to the UCLA Anderson Forecast released last week.


The quarterly forecast devotes one section to examining these myths. “Some turn out to be true, some wildly inaccurate, but most simply represent leaping one or two steps beyond the conclusions that the (economic) data support,” said report author Ryan Ratcliff.


Take the statement on wealth. While Ratcliff states that data support the conclusion that the nation’s rich are getting richer while the poor are getting poorer, the same does not hold true for L.A. County.


The share of L.A. County households with incomes over $100,000 actually stayed flat at about 18 percent between 2000 and 2004, while the share of households under $25,000 dropped 1.1 percent from 28 percent to 27 percent, according to data from the U.S. Census Bureau.


“At most, we may be seeing the rich get richer faster than the poor are getting richer,” Ratcliff said.


Another “myth” the Anderson Forecast explores is the statement: “High home prices are driving residents from the coast to the Inland Empire.” While Ratcliff concedes that this phenomenon may be occurring, he said it’s also possible that residents who move from coastal counties like Los Angeles may move out of the region entirely, while newcomers to the region settle in the Inland Empire.


What’s more, he said that housing prices may not be the reason behind most of the moves. He cited California Department of Finance figures to show that only 44 percent of those moving between counties said housing prices were the primary factor. One in four said their move was “job-related.”

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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