Study: Income gap grows in county: Pay in 1990s found to rise average of 4% for poor families, 24% for wealthy
MARCH 1, 2005
Santa Rosa Press Democrat
by Mary Fricker

The North Bay was a spectacular job machine in the 1990s and into 2001, but the benefits went overwhelmingly to high-income workers while a growing number of low-income residents hardly gained ground, according to a study to be released today by a Sonoma County research group.

"Economic growth in the North Bay has failed to bring shared prosperity to the region's residents," said Martin Bennett, executive director of New Economy, Working Solutions, a group representing union, housing and religious organizations.

The study covering Sonoma, Marin, Napa and Mendocino counties shows "a crisis of low-wage employment and working poverty has spread across the North Bay," Bennett said. Growing wage disparity has been an issue nationwide among economists and policymakers for at least a decade or more. Several studies have documented the trends both in California and nationwide.

"It's the same everywhere. The well-off are doing better, and the worse-off are doing worse," said Christopher Thornberg, a senior economist at UCLA Anderson Forecast.

The 81-page study, using standard U.S. Census and state employment data, is the first to focus on incomes for specific economic groups in the North Bay. Earlier studies documented overall income gains but didn't look at the lowest, middle and highest earners in such detail.

The study found that in the 1980s, low-income families in Sonoma County made significant financial gains on par with the county's wealthiest households. But in the 1990s they fell behind.

After rising at almost exactly the same rate in the 1980s - 23 percent and 22 percent, respectively - the average income of the lowest paid rose only 4 percent while the highest paid soared 24 percent in the 1990s.

Many economists blame several factors: technology, which cuts the need for low-skill jobs and raises demand for high-skilled people; immigration of lower-skilled workers; and trade, which moves lesser-skilled jobs to other countries. Together, these trends hold down already-low wages and increase the demand and wage for high-skilled workers.

"The main factor is that there are two distinct labor markets in Sonoma County ... based on skill level," said Robert Eyler, chairman of the economics department at Sonoma State University. "There is a large amount of working poor, where their skill level does not allow them to pursue job opportunities that keep pace with the cost of living."

Experts offer a variety of solutions. Some focus on creating high-wage jobs that help support other workers; others say the key is higher levels of education and workplace training."Education, education, education" is the antidote, Thornberg said. Stephen Giordano of Rohnert Park came to that conclusion last year when he was making about $13 an hour as a driver for a courier service and decided to go back to school.

Now he's halfway through two years of night school at Empire College in Santa Rosa, working toward his associate degree in information technology, where jobs can start at $25 an hour. "The main goal for me is to make a liveable wage to start a family," said Giordano, 37, who now earns $16 an hour as warehouse supervisor at Merry Edwards Wines in Windsor.

The New Economy, Working Solutions study agrees education is a key solution. But it has a 10-point plan that also calls for building community support for unions, raising the minimum wage and passing living wage ordinances. It says technology and trade don't fully explain the trends this decade in the North Bay, where the economy is creating mostly low-paying jobs that can't be moved abroad, such as restaurant work, nurses aides and retail clerks - jobs that are not affected much by either technology or trade.

The study compares the bottom and top one-fifth of the county's estimated 100,000 working families, ranked by average income and adjusted for inflation. In Sonoma County, the average income for these groups in 1999 was $24,000 and $180,000, respectively.

In neighboring Marin, Napa and Mendocino counties, income for low- and middle-income working families lagged the wealthy in both the 1980s and 1990s, but the difference was bigger in the 1990s.

The trend is not likely to change soon, according to labor analysts at the state Employment Development Department. They predicted two-thirds of new jobs in Sonoma County at least through 2008 will be in fields that require no advanced education, only on-the-job training, the New Economy, Working Solutions study said.

New Economy, Working Solutions commissioned the study which was done by the University of California's Institute for Labor and Employment. The report is available at www.neweconomynorthbay.org.