March 5th Forum To Release New Report Analyzing The Widening Income Gap and Working Poverty In The North Bay

New Economy, Working Solutions (NEWS) will release a new report, "The Limits of Prosperity: Growth, Inequality and Poverty in the North Bay," at a forum on Saturday, March 5th 2005 at Santa Rosa Junior College. NEWS is a nonprofit research and educational organization supported by labor, religious, and, community organizations in the North Bay. The report, funded by the University of California Institute for Labor and Employment, documents the polarization of incomes, and the growth of working poverty in the North Bay and their impact on the economic well being of working families in Marin, Sonoma, Mendocino and Napa counties.

The study is an unprecedented analysis of long-term trends in inequality in the North Bay, based on the latest available data from the Census Bureau and the State of California.The report analyzes employment growth by industry and occupation; wages; working family income; and poverty. UC researchers Dan Acland and Nari Rhee examine how the economic growth and prosperity of the 1990's was accompanied by an expansion of working poverty, and the persistence of racial and gender inequality in all four counties.

The main findings of the report include:

1. Growing income inequality

Income inequality in the North Bay grew incrementally during the 1980s, but spiked sharply during the 1990s. Between 1989 and 1999, working families at both the middle and bottom trailed far behind the richest families in income growth.

+During the 1990s, the income of the top one-fifth of working families grew six times as fast as that of the bottom one-fifth in Sonoma and Napa. +During the same period, the income of the top one-fifth in Marin grew by 38%, while that of the bottom one-fifth fell 2% in real terms. +In Mendocino County, only the top one-fifth saw income growth (10%), while the incomes of the bottom four-fifths fell 2-10% in real terms.

2. Growing ranks of working poor

+During the boom of the 1990s, the percentage of working families living in poverty and facing serious economic hardship increased in the North Bay. The report indicates that one in six working families in the North Bay do not receive wages and income sufficient to pay for basic needs.

3. Emergence of the hourglass economy

+The primary cause for growing inequality and poverty even during times of rapid economic growth is the emergent hourglass economy, in which job growth is primarily split between high- and low-wage occupations, and middle-wage job creation is weak. Projected job growth in the North Bay will further widen the bottom of this hourglass and worsen poverty and inequality.

+Over one-third of North Bay workers do not earn wages that will allow two parents working full time to support two children. +Over one-half of North Bay workers do not earn a high enough hourly wage for a single parent raising an infant to meet the most basic monthly expenses.

4. Latinos are a growing underclass

+Latinos, the fastest growing ethnic group in the North Bay, are the most likely to experience working poverty. In Mendocino County, where economic hardship is the worst in the region, more than 30% of all working families and 60% of Latino families cannot make ends meet.

+Region-wide, Latinos are twice as likely to be poor as whites. +Compared to the population as a whole, Latinos are five times as likely to be in farming occupations and twice as likely to be in production and service occupations-the occupations with the lowest wages.

The report argues "the single biggest roadblock to working families' efforts to improve their lives is the poverty-wage, dead-end character of jobs in fast-growing sectors like tourism." The report concludes with specific policy recommendations to reduce inequality and poverty in the region such as raising the minimum wage, expanded protections for the right of workers to organize unions, and increased access for low-income families to affordable housing and quality health care.

Congresswoman Lynn Woolsey will chair a panel of elected officials including Assemblywoman Noreen Evans, Sonoma County supervisor Mike Kerns, Superintendent of Schools Dr. Carl Wong, and other community leaders who will hear a summary of the findings by the researchers and presentations by low-wage workers struggling to make ends meet. The forum will be held in the SRJC Faculty Lounge/Doyle Student Center at Mendocino Ave. and Elliott from 9:00am-11:30 am. Coffee will be provided at 9 am. The facility is wheel chair accessible and admission is free.

Co-sponsors of the forum include Family Action of Sonoma County, League of Women Voters of Sonoma County, Leadership Institute for the Ecology and Economy, Sonoma State University Hutchins Institute for Public Policy Studies and Community Action, Living Wage Coalition of Sonoma County, Catholic Charities of the Diocese of Santa Rosa, Sonoma County Housing Advocacy Group, North Bay Labor Council, Sonoma County Conservation Action, United Farm Workers, and the Service Employees International Union Local 707.

The executive summary or the full report can be downloaded after March 1st at http://www.neweconomynorthbay.org. For more information call Martin Bennett at 707-478-9663 ext 221 or email: JnnfFlch@aol.com

CLICK HERE FOR "THE LIMITS OF PROSPERITY"

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The Hour Glass Economy

by Martin Bennett
Santa Rosa Press Democrat
March 4, 2005 Closer to Home

Dark clouds are gathering on the horizon as the North Bay moves unevenly into the economic recovery.

The collapse of Telecom Valley and the slashing of 4,500 high-tech jobs have cooled the robust economic growth of the late 1990s, a period when regional job growth outpaced the state and national rates. Now a sober assessment of the boom years reveals the dramatic growth of income inequality and working-class poverty in the North Bay.

This week the nonprofit New Economy, Working Solutions (NEWS), released a report, "The Limits of Prosperity: Growth, Inequality and Poverty in the North Bay," by University of California researchers Nari Rhee and Dan Acland.

The report examines the transformation of the regional economy over the last two decades and calls for new public policy to address the crisis of low-wage employment and the polarization of wealth and income in Marin, Napa, Sonoma and Mendocino counties. The spreading economic insecurity and the structural weaknesses of the regional economy could undermine renewed prosperity.

The report argues that the emergence of an "hourglass economy," with job growth concentrated at the top and the bottom of the labor market while middle-income jobs are shrinking is driving the current economic insecurity.

Income inequality grew at "staggering rates" in the 1990s compared to the 1980s. In Sonoma and Napa counties during the 1990s, the income of the top one-fifth of working families grew six times as fast as the bottom one-fifth. In Sonoma County income for the upper one-fifth ballooned by 24 percent, from $144,476 to $179,615 in inflation adjusted-dollars. For the bottom one-fifth family income was stagnant and grew by only 4 percent, from $23,001 to $23,991.

The hourglass economy spurs the rapid growth of the working poor, families for whom wages and incomes are not sufficient to pay for basic necessities such as food, housing, transportation, child care and health care. The report documents how incomes at the bottom have failed to keep pace with spiraling housing, medical and other costs of living.

More than 30 percent of the workers in the North Bay do not earn wages sufficient to enable two parents working full-time to support two children. Adjusting for the cost of living in each county, the self-sufficiency or living wage for two parents working full-time to support two children is $9.75 in Mendocino, $11.48 in Napa, $12.46 in Sonoma and $15.05 in Marin.

Most alarmingly, job growth projections for the North Bay indicate that the base of the hourglass is continuing to widen. Service sector jobs such as janitors, child-care and home-care workers, security guards and retail sales will account for much of the the 62 percent of new jobs paying an entry wage of less than $12 an hour.

Latinos, who are clustered in industries that offer the least pay, training and job security, are twice as likely to be poor as whites. More than 43 percent of the Latino working family population in Sonoma and 60 percent in Mendocino do not earn a living wage. The California Budget Project suggests that Latinos will constitute over 43 percent of the state's population by 2020 and low levels of educational achievement for Latinos will limit upward mobility and could choke off future economic growth.

The NEWS report warns of dangerous consequences if the hourglass economy persists:

+A mismatch between jobs and housing will mean longer commutes for low and middle-income workers who cannot find affordable housing. +The increased demand from low-wage workers for health and human services will erode the public sector. +The rapid turnover and diminished levels of training and skills among low-wage workers will lead to declining productivity.

The authors conclude with a set of recommendations to address the deepening income inequality. They advocate for a higher state minimum wage indexed to inflation, more protections for workers seeking to form unions, increased access to affordable housing and health care, and ensuring that good jobs with benefits are created when public funds are provided for new commercial development.

Ultimately, the report suggests that shared prosperity, which enables all income brackets to grow together, is the basis for a healthy and sustainable regional economy.

Martin Bennett teaches American history at Santa Rosa Junior College and is the board chair of New Economy, Working Solutions. The report can be downloaded at: http://www.neweconomynorthbay.org

"THE LIMITS OF PROSPERITY"