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Is the widening gap between L.A.’s very rich and very poor such a bad thing after all? The Los Angeles Times presents a woe is us assessment of the disappearing middle class, citing a Wayne State University study that finds greater Los Angeles to be the most economically segregated region in the country. George Galster, a Wayne State professor, told the paper: “I think that poses real challenges to any society, politically and socially.” That’s been a standard-issue lament among academic types going back to the riots.
There’s only one problem: L.A. County’s job growth continues to chug along at a reasonable clip, as reflected in June’s employment report that showed the unemployment rate falling to 4.6 percent, from 5.1 percent in May and 5.3 percent in June, 2005 (the unemployment rate in the city of L.A. was 5.3 percent). Those readings can bounce around quite a bit, but there’s no denying that L.A.’s economy has been holding up – even though middle-income families only make up 17 percent of the population (low-income families account for 40 percent and high-income 42 percent).
A New York Times piece presents a nuanced assessment of the pattern, noting that some cities have benefited economically from having so many rich folks (New York, San Francisco, Boston and San Diego are mentioned, but Los Angeles, with its large numbers of millionaires, can probably qualify too). Joseph Gyourko, a professor at the Wharton School, said that in SF the percentage of households earning more than $100,000 a year rose to over 30 percent in 2000 from 7 percent in 1970. “Is that area worse off?” he asks. “At least so far, there’s a lot of evidence that economically they’re better off.”
By the way, all the hand-wringing stems from a Brookings Institution study that was reported by the Washington Post on June 22.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.