Income Gap Still Widening Locally
MARCH 5, 2005
Ukiah Daily Journal
By QUINCY CROMER

Mendocino County has experienced labor polarization and a growing gap between the rich and poor over the past two decades, according to a Sonoma County research group study to be released at a Santa Rosa forum today.

New Economy, Working Solutions is presenting the report which examines growth, inequality and poverty in Mendocino, Sonoma, Marin and Napa Counties at Santa Rosa Junior College today.

Researchers analyzed demographic, employment and income trends since the 1980s and found four significant reasons for economic hardships. A growing percentage of working families living in poverty, income inequality growth, polarized job market and a Latino economic underclass were the primary reasons found by researchers that have resulted in North Bay economic problems, the study states.

While the region has experienced notable population growth since 1980, which continued through the Bay Area recession in 2001, the study found that white population has decreased and the Latino population has grown to account for more than 16 percent of area residents.

The bottom four-fifths of income distribution in Mendocino and Lake Counties declined, the study states, while the top one-fifth experienced income growth in the 1990s. According to NEWS board chair Martin Bennett, there were many shocking discoveries from the study and many issues will need to be addressed before the situation worsens.

"We are not talking about just the lowest fifth but about the bottom 80 percent. It raises the issues of how do we bring quality and living-wage jobs to the county," Bennett said.

One of the most significant reasons stated for economic trends in the area is an hourglass economy. Researchers found a job market dominated by low-skill, low-wage jobs with limited advancement opportunities and high-wage, professional jobs, the study states.

Mendocino County increased wage and salary employment by almost one-quarter over two decades and researchers discovered that the service sector accounted for 70 percent of employment in the county.Researchers determined that government employment accounted for almost half of new jobs in Mendocino County where the service sector has remained relatively unchanged since the 1980s.

High-skill professional jobs and low-skill service occupations accounted for 60 percent of job growth in the county, according to the study. Disparity between wages in the two groups is a major contributor to the widening gap between rich and poor, Bennett said.

"With the growth of ag and service industries in Mendocino, more and more Latinos are moving to the county, which is a population that is growing very rapidly. They are the ones who are really being left behind which has many troubling consequences," he said.

Income polarization increased throughout Mendocino and Lake Counties where the rich became wealthier and the poor made even less money.The NEWS study states that the declining value of minimum wage, growth of low-skill service industries and introduction of immigrants and minorities are contributors to insufficient wages in the North Bay.

"We definitely see the declining value of the minimum wage because it did not keep pace with inflation over the past 30 years. The decline of unionization, the increase of low-wage service jobs and the spread of big box around Ukiah have added to the problem," Bennett said.

Living Wage Coalition Coordinator Ben Boyce, a project of NEWS, said that minimum wage is one of many problems that must be addressed in order to provoke economic change in the North Bay. "The minimum wage needs to be raised in order to stimulate economic activity and to reduce the burden on public services. Many people are working two or three jobs just to pay rent, bills, basic child care and for food," Boyce said. "Living wage is the basic cutoff point ? for which a person can live in a particular area and not live on public welfare or charity."

Affordable housing and medical costs are other areas where improvement is needed to help workers in low-wage jobs who cannot make ends meet, Boyce said. "The study will recommend a public investment in creating more affordable housing or subsidies. There are many solutions out there for medical costs," he said.

The group of working families determined to be poor has grown seven times faster in the county, the study states, where the self-sufficiency wage for two parents with full-time jobs to raise two children is $9.75 per hour. "The numbers that are the worst in Mendocino are for single parent with an infant where 57 percent are not making a livable wage. It is significant that when the cost of living is lower than other areas and there is such a high percentage of people who are working poor," Bennett said.

Nari Rhee, co-author of the study and doctorate candidate at the University of California Berkeley, said that more than 32 percent of working families are considered poor and some 38 percent of members of working families are classified as working poor in the county.

With a steady rising population and further polarization of jobs, researchers found that poverty has continued to grow. In Mendocino County, two out of five residents were determined poor in the 2000 census where 51 percent of children were found to be living in poor families.

"We have to tackle this problem on a regional level. When people are making low wages and have to turn to state or local governments for food stamps or Medical. This strains the public sector which is already overburdened because there are so many long-term troubling consequences," Bennett said.

Another important issue throughout the North Bay area is public subsidy accountability, which Boyce said must be addressed to ensure that tax-payer money is being used for worthy projects. "Public subsidy accountability deals with how public monies are disbursed to private actors. Almost every municipal or county system has a pool of money called redevelopment money which the economic elites get access to and create more low-wage jobs," he said.

After releasing the study, Bennett said he hopes that the study will result in important changes throughout the area and possibly policy implementation in the future. "We have concrete policy goals and we really want to see is this policy implemented," Bennett said. "The state-wide minimum wage needs to be raised and we hope this report is going to provoke a policy discussion."

The SRJC public forum will be in the faculty lounge of the Doyle Student Center from 9 to 11:30 a.m. The executive summary or the full NEWS report can be downloaded at www.neweconomynorthbay.org.