Top economists, reacting to a study out of UCLA that described a startling gap between the rich and poor in Los Angeles, say that the disparity points to a looming mismatch between the region's new white-collar jobs and undereducated workers, a phenomenon that they warn could lead the city to economic crisis.
The dilemma is a result of Southern California's extreme duality: a city that is at once a booming manufacturing and financial center thirsty for qualified workers, and a magnet for immigrants and urban poor who are educated only for blue-collar and unskilled jobs.
Unless dramatic changes are made in the way the minority and immigrant-dominated student population is educated, economists and educational researchers predicted, Los Angeles will be flooded with underachievers who cannot supply the job boom, and the area could face a generation of economic decline.
According to Stephen Levy, director and senior economist of the Palo Alto-based Center for Continuing Study of the California Economy, the region's students must be trained "not for the sake of altruism, but frankly to make the economy work.
"The problem is that the dental hygienist, computer repair person, physical therapist and secretarial jobs are growing--jobs in an office setting that require good English, meeting the public and interpersonal skills," Levy said. "We have to move the institutions to train young people for this new type of middle-class job, because if we fail that, we will move toward the bipolar society. And this is not an issue we can be divisive about."
The comments of Levy and others followed release of a UCLA study last week. In a nine-month study sponsored by the Graduate School of Architecture and Urban Planning, Professor Paul Ong and nine graduate students analyzed various federal economic, housing and demographic surveys.
They found that, despite an ongoing economic boom, the gap between mostly Anglo "haves" and minority "have nots" is worsening in Los Angeles, driven in part by a surge in low-paying jobs that mire full-time workers in poverty, and by inferior urban schooling that prevents the young from moving up the economic ladder.
Frank Levy, a noted economist, (no relation to Stephen Levy), professor of public affairs at the University of Maryland, and consultant to the Urban Institute, said the UCLA study appears to mirror a national trend in which American families have been trapped at or below the same standard of living for the last decade.
For the first time since World War II, a robust economy and rising employment levels are failing to lift the poor out of poverty or to boost the middle class, Levy said.
"If this had been 20 years ago, when average incomes were rising throughout the economy, you could have had growing disparity, but still everyone would have been getting better off," Levy said. "The rich would be getting richer faster, but at least the poor would be getting richer, too."
While most economists are reserving judgment on just how wide the gap has become between rich and poor, with many waiting until the 1990 U.S. Census figures are available, Levy said there has been "some decline for those who have low earnings, and some explosion in earnings at the top."
"Your gut sense is that while that explosion may not be very big in term of national numbers, it is concentrated in coastal cities like Los Angeles, New York and San Francisco," he said. "You wouldn't see the same kind of disparity in Kansas City."
Because incomes are flat or declining for all but those at the top, the potential for a growing division between the classes, with fewer workers left to supply the boom in white collar and technical mid-level jobs, has the experts concerned.
Forming Into Two Tiers
Allen Scott, a UCLA professor of economics and urban geography, and author of "Metropolis," a book on the Southern California economy, said the labor force here "is clearly bifurcating into two tiers. We are increasingly competing with the Third World, so a Third World economy and Third World conditions are being created here, and that is a policy disaster."
Goetz Wolff, chief economic analyst for the Los Angeles Economic Roundtable, warned that if the region attempts to compete against low-wage workers worldwide, "we will lose that battle, because they will always be able to pay less elsewhere."
While such complex issues may portend deep troubles for the region's economic well-being, city, state and federal policy makers are only now beginning to become aware of such possibilities, several economists and educational researchers said.
"Certainly the educational community is aware and the business community is very vocal about the need for educated students, but we are just at the stage of recognizing the problems and seeking solutions," said Gordon Palmer, principal economist for the Southern California Assn. of Governments.