Los Angeles: A critical essay looking into increasing inequality and its root causes in the metropolitan area across the last 50 years

Los Angeles is one of the most economically developed cities in the world and it represents a beacon of technological advancement, social progression and equal opportunity for people all around the world. Los Angeles (L.A.) was recently ranked 9th on the Global Economic Power Index (Florida, 2012) and 20th on the Global Power City Index that included criteria such as “livability”, “cultural interaction”, “environment” and “accessibility” (Institute for Urban Strategies, 2014). These ideas may ring true for some; however there are many who live within the city limits that experience a very different reality. In the last 20 years there has been an increasing amount of academic literature examining rising economic, social, political and underlying racial inequality within L.A. This essay will attempt to evaluate this literature so as to examine what inequalities are occurring and identify possible causes underlying them. For future reference within this essay, I am going to be looking at L.A. as the Greater Los Angeles Area, which includes the city of L.A. and other interconnected urban areas so as to avoid confusion on where possible boundaries are drawn and also to have a greater area from which to draw comparison from.

Socio-Economic History Leading to Contemporary Inequality

The situation Los Angeles is currently in can be attributed to the combination of events occurring over the last 50 years where the city experienced rapid economic growth whilst also receiving a large influx of international migrants. This economic growth was primarily driven by the emergence of L.A. as one of the major industrial centres on the West coast in the late 1960s and the development of it’s banking sector (Scott and Soja, 1996). L.A. earned the title of the modern “Ellis Island” in the 70s and 80s, as it became a gateway for immigration into the US, due to its prime location on the Pacific Rim and more importantly it’s proximity to the Mexican border (McCarthy and Vernez, 1997).
Unlike most major cities that began de-industrialising in the 80s, L.A.’s manufacturing sector actually grew due to the large pool of migrant labour which kept labour costs low for “Fordist” industries. This meant that when industry (particularly textiles) inevitably began to decline in the 1990s, mainly due to competition in the far East, the poorest people of the city, most of whom were first generation migrants, who were employed in this sector were hit the hardest and they experienced rapid job loss (Davis, 2006). As this narrative of job loss, poverty and decline occurred for vast numbers of migrants across the second half of the last century; there was a very different story for the skilled, predominately white workforce who reaped the benefits of the booming upper end of the services sector. These high-income jobs in finance, insurance and real estate (also know as the FIRE sector) saw a 79% increase between 1969 and 1989, driven by the flourishing banking sector (Scott and Soja, 1996).
By the mid 1990s, the rift between lower and higher income households was incredibly defined as the spatial parameters of this inequality had made it much more tangible. There was also a level of racial motivation to this spatial divide, which had manifested itself in what has became known as the “white flight”; the country-wide process of white people moving out of the inner city areas into the suburbs. This occurred from the mid 50s and carried on towards the end of the 20th century, becoming particularly pronounced in the years following the aftermath of the notorious Watts Riots (1965) where racial tensions reached fever pitch. The implications of this social and racial segregation have come to define what many people envisage Los Angeles as a sprawling suburbia with its incredibly wealthy, principally white areas such as Beverly Hills or Malibu as well as its deprived, predominantly black and hispanic areas such as the “South Central” neighbourhoods of Compton or Inglewood.

Racial Division and Resulting Spatial Inequality

Many argue that the spatial distribution of people in L.A. is both a symptom of, and a factor that exacerbates inequality in the city. The socio-economic polarization between people living in neighbouring areas is often incredibly defined and is a clear demonstration of how resources are not spread equally over space. It is important to note that city’s spatial expansion gathered momentum because of the prevalence and availability of the automobile in the second half of the last century, which meant that those on higher incomes who could afford cars had the luxury of living outside of the city centre (Scott and Soja, 1996). This idea of suburbia being reserved for the wealthy rings true with Walker, who states that spatial differentiation is inevitable and is the “product of the capitalist division of labour” (1981).
There are many that strongly argue that spatial mismatch in LA is a root cause of decreasing wages and job loss in low income areas, since there is mismatch between where low-income households are located and the proximity as well as accessibility to suitable employment (Bobo et al, 2002). Bobo et al also argue that this effect has a significantly larger impact on ethnic minorities, particularly African-Americans, and to a lesser extent latinos, because of the history leading to where they inhabit. Hellerstein et al argue that there is not “spatial mismatch” but “racial mismatch” with the problem being “not a lack of jobs, per se, where blacks live, but a lack of jobs where blacks live into which blacks are hired” (2008). Some claim that this is down to a racist agenda from business owners whose “stereotypes and prejudicial attitudes” determine who they employ (Johnson et al, 1997:1063). Others contest this view and believe ethnic minorities suffer significantly higher unemployment rates because of structural unemployment in L.A.’s “post-industrial transition” (Scott and Soja, 1996). The logic behind this being large proportions of ethnic minority groups were employed in “Fordist” and textile based industry so when they lost their jobs during industrial decline they lacked the skills to gain employment in the growing tertiary sector.
Although it is often argued that geographical racial segregation is imposed on ethnic minorities, be it due to racial, social or economic factors, there are also those who dispute this and claim racial segregation is the result of “ethnocentrism” (Patterson, 1997) where ethnic groups simply choose to live together. Bobo et al contest this by asserting, with the support of strongly correlated data, that whilst blacks are the most open to racial integration, other major ethnic groups including latinos but principally whites are least likely to want to reside in racially diverse neighbourhoods (2002).
Whatever the cause behind spatial division in Los Angeles, ethnic minorities have been hit hardest by its socio-economic implications as I will further discuss in this essay. Although there are some of those left unemployed who get involved in “micro-enterprise” in the “gigantic low-wage, largely off the books, economic ghetto” that has formed in these declining areas (Davis, 2006: xiv), the story for many is a spiral of poverty where the most vulnerable people’s weak “economic position is uniquely reinforced by their social milieu” (Wilson, 1991:12).

Income Disparity and Increasing Unemployment

The distribution of wealth within Los Angeles is becoming increasingly uneven; in the 60s and 70s the U.S. as a whole had a Gini Coefficient (one way of measuring income distribution where a lower figure shows a more equal spread) similar to that of most Western European countries (Diener et al, 2011) with the figure hovering around 0.36. A recent article, with the latest figures from the US Census Bureau, stated that L.A.’s income distribution had increased drastically over the last 20 years, far ahead of the country average and was now equivalent to that of the Dominican Republic (Florida, 2012) with a figure of 0.485. There are many possible explanations behind why L.A., along with many other large metropolitan areas in the US are experiencing this phenomenon of increasing economic inequality.
One possible explanation for this unequal spread is that top end salaries at “high profit making” firms are on the increase (Sassen, 2001). The Los Angeles Times recently reported that in L.A.“A top 5% household made an average $218,000. That was 12.3 times higher than a 20% household” (2014). Many put this down to the technology boom currently occurring in L.A. where tech firms are trying to tempt the best employees with attractive pay packages. This is backed up by the recent Portrait of California conducted by the Social Services Research Council who recognised the increase in the upper income levels whilst also observing a state-wide 16% drop in the median real income between 2005 and 2012 (Lewis and Burd-Sharps, 2014).
However, as Bobo et al notes (2002), this disparity isn’t just down to an increase in upper income levels, it’s also down to the fact that those on the lowest incomes experience stagnating pay or even a decrease in real (inflation controlled) terms. Another point presented by Scott and Soja is that the proportion of those on the lowest income increased as the manufacturing industry looked to reduce costs to maintain competitively since the late 70s, “made easier by the dramatic decline of industrial unionization throughout the region” (1996:12). Danziger and Gottschalk are also in agreement with this view, stating that globalisation and therefore increased global competition was the driving force behind these cost cutting measures (1995).
On top of decreasing wages, industry in L.A. has had to make a lot of people redundant in order to maintain competitiveness. Many academics have put this resulting unemployment down to structural change in the economy, which has been particularly noticeable in L.A. as it goes through “post-industrial transition” (Scott, 1988). The city over the last 20 years has seen a massive shift towards the tertiary sector and the quaternary sector, particularly towards the FIRE sectors, the entertainment industry (notable to L.A.) and more recently the technology sector. One possible explanation for continued high unemployment despite a booming local economy, specifically in African-American communities, is poor occupational mobility of labour (Scott, 1988). This lack of occupational mobility is possibly attributed to the poor provision of education in areas where African-Americans tend to reside, meaning that many of them lack the qualifications and skillsets to transfer from low-skilled secondary sector jobs to higher-skilled tertiary and quaternary sector jobs (Adar et al, 2012).

Political and Social Inequality

Those who hold economic power shape the social and geopolitical landscape, and this becomes a problem as those most in need lack the tools to change their situation (Scott and Soja, 1996). Abu-Lughod supplements this by stating that although they were more than proportionally represented in the city hall, native-born blacks in L.A. were “increasingly marginalized” and “confined to deteriorated and segregated quarters” (2000:386). Despite blacks becoming increasing politically empowered since the Watts riots, most saw little positive change even during the time Tom Bradley, the first and only black mayor of Los Angeles (1973-1993), held office (Gilliam, 1996). Critics argue that Bradley’s neo-liberalistic approach to the city did little to change the lives of struggling ethnic minorities and possibly contributed to socio-economic inequality during his time in office (Sonenshein, 1993). Bradley’s idea of supporting business with the intention of helping the poorest from increased employment and through the trickle down effect arguably failed.
Education remains a point of contention for those trying to reduce inequality because it has the potential to give an opportunity to those most in need. As mentioned in the previous section, ethnic minorities and especially African-Americans seem to suffer most under the current public schooling system because they do reach an educational attainment, on average, equivalent to their white counterparts. Adar et al offers an explanation for this by discussing various factors that affect academic attainment in schools where larger proportions of blacks and Hispanics attend including higher student to teacher ratios, less teacher experience, larger size and crucially higher student poverty levels (2012). Card and Rothstein showed that racially segregated schools means educational inequality for who attend them, as opposed to more racially integrated schools where blacks and latinos are more likely to reach higher levels of educational attainment (2005). This inequality is very hard to tackle by the government, as schools segregation is down to their geographic location, and it is unrealistic to try to get students from one area to attend a school in another. Perhaps a solution, be it more long term, would be to encourage families from a variety of backgrounds to coexist in more racially integrated areas to ensure the better educational outcomes for children in public schools.
Poor access to quality education in L.A. is arguably one of the fundamental driving forces behind spiralling poverty in declining urban areas (Scott and Soja, 1996). Those who lack basic education, as described earlier, struggle to find employment in the increasingly skilled urban economy. Hypersegregation has meant that areas left behind by the unequal schooling system can find themselves falling into social decline with patterns of crime, drug abuse and homelessness. Los Angeles is often noted for its homeless population with up to 54,000 people, which constitutes 9% of the U.S.’s homeless, living there (LA Times, 2014). This is likely the result of a combination of inadequate schooling, poor provision of jobs and social decline occurring in poorer areas. This social decline in certain areas, “once considered ghettos”, is the result of these spatially, economically and politically isolated areas in L.A. where residents are isolated from resources that have the potential to help them (Scott and Soja, 1996:346)

Conclusion

Over the last 50 years the literature suggests a snowballing of inequality, where a cycle exists of the rich getting richer and the poor getting poorer. Despite consistently high growth, we have not seen wages equally passed on to the general population. Although I have attempted to untangle the mess of inequality occurring throughout the Greater Los Angeles Area, it is important to note that the types of inequality that I have examined are all inextricably linked to one another. Racial prejudice has caused spatial divisions, creating unequal social welfare and therefore unbalanced economic outcomes have occurred in different areas. This makes solving the problem incredibly hard; as to challenge one inequality would mean challenging several interconnected ones. Racial inequality seems to be a fundamental underlying problem behind many other inequalities in L.A. and needs properly addressing before other the situation can improve. The problem in achieving racial inequality is that it involves dealing with a sort of intangible passive racism, which may affect people’s social behaviour and economic choices in a subtle, sub-conscious way (Bonilla-Silva, 1997). On paper, in terms of legislation, everyone is equal so the only way to achieve racial equality is through an overhaul of attitudes and prejudices against ethnic minorities in the U.S.A

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