Strong L.A. economy boosts income inequality in city, study says
A relatively strong local economy in Los Angeles, which is stoking the fortunes of its higher-income residents, is helping boost income disparity in the city, the Brookings Institution study shows.By Walter Hamilton
5:30 PM PST, February 21, 2014
Of the 50 largest U.S. cities, L.A. has the ninth-highest level of income disparity, according to the analysis by Brookings Institution, a Washington think tank. The top three are Atlanta, San Francisco and Miami.
Inequality has become a flash point nationwide as the wealth of top earners surges while the middle and lower classes grapple with stubborn income stagnation. Politicians have clashed loudly on what's driving the dichotomy, and what steps, if any, should be taken to reverse it.
The study found, however, that rising inequality may simply be an unavoidable byproduct of robust local economies that plump the incomes of coveted workers.
Fast-growing industries with highly paid employees — such as technology, finance and entertainment — tend to cluster in large metropolitan areas, said Alan Berube, a Brookings researcher who specializes in inequality. And the ongoing gentrification of many cities, such as in downtown Los Angeles, is drawing wealthier people.
At the same time, big cities also draw large numbers of low-income people seeking lower-skilled jobs.
The study analyzed inequality in the 50 largest U.S. cities in 2012. It compared the earnings of a family exactly at the top 5% — that is, at the 95th percentile of all U.S. households — to one at the 20th percentile.
The average annual income of a top 5% family was 10.8 times higher than a bottom 20% household. For the country as a whole, the ratio was 9.1 to 1.
"It's not necessarily a bad thing that big cities are home to more rich and poor than the rest of the country," Berube said. "The question is how do cities and leaders navigate that but keep their cities diverse and able to provide opportunities for upward mobility."
In L.A., a top 5% household made an average $218,000. That was 12.3 times higher than a 20% household.
The study analyzed only the city of L.A. It did not include nearby areas with well-heeled residents, such as Beverly Hills or Santa Monica.
The inequality debate intensified after President Obama in December called it "the defining challenge of our time."
Critics worry that income imbalances weaken cities by hiving off rich from poor. Among other things, that can push out younger residents, lead to pockets of entrenched poverty and undermine school quality.
Even some extremely wealthy Americans acknowledge the threat of rising inequality.
"It's a genuine problem," Stephen Schwarzman, the chief executive of private-equity giant Blackstone Group, said in an interview with The Times on Thursday. "It's been growing for over 30 years. It's not recent. It's something that has to be addressed."
San Francisco illustrates the dynamic of a vibrant economy exacerbating the gap between rich and poor.
The tech boom has dramatically pushed up the earnings of those at the top.
The average $353,000 income for a top 5% household towered over that of every other city. Its inequality ratio was 16.6 to 1.
In Atlanta, a top 5% family took in $280,000, compared with less than $15,000 for a bottom 20% family.
Inequality tends to be lower in cities with less robust economies, where there is less of a gap between the highest and lowest paid, according to Brookings.
Altogether, 18 cities in the Brookings study suffered a statistically significant rise in inequality from 2007 to 2012. But that was due more to the bottom dropping out for low-income people in the last recession.
"Most were not places where the rich made astronomical gains, but where low-income households suffered most from the recession and weak recovery," the study said. "Many are Southern and Western cities — including Sacramento, Charlotte, [N.C.], Tucson, Fresno, and Albuquerque — where house-price collapses reduced work opportunities for poor households."
California’s homeless: Casualties of class warfare
Last November the US Department of Housing and Urban Development (HUD) released its 2013 Annual Homeless Assessment Report which found that southern California remains home to the largest homeless population in the country.
January 9, 2014
WELFARE COSTS FOR CHILDREN OF ILLEGAL ALIENS IN L.A. COUNTY OVER $48 MILLION IN JUNE
Annually the cost of illegal immigration to Los Angeles County taxpayers exceeds over $1 billion dollars, which includes $350 million for public safety, $400 million for healthcare, and $500 million in welfare and food stamps allocations. Twenty-four percent of the County’s total allotment of welfare and food stamp benefits goes directly to the children of illegal aliens born in the United States.
“Illegal immigration continues to have a catastrophic impact on Los Angeles County taxpayers,” said Antonovich. “The total cost for illegal immigrants to County taxpayers exceeds $1 billion a year – not including the millions of dollars for education.”
Inside the Cartel - First of four parts
Unraveling Mexico's Sinaloa drug cartel
As drug smugglers from the Sinaloa cartel in
Mexico sent a never-ending stream of cocaine
across the border and into a vast U.S.
distribution web in Los Angeles, DEA agents
were watching and listening.
THE DEMOCRAT PARTY BUILDING THE LA RAZA MEXICAN WELFARE STATE OFF OUR BACKS. ARE THEY BUYING THE ILLEGALS’ VOTES??? You bet!
Maywood, California, then, with an estimated illegal