Study recommends ways to realign North Bay economy
MARCH 9, 2005
Petaluma Argus-Courier
by Lois Pearlman

When Petaluma gave the developers of the Petaluma Sheraton $2.75 million in loans to build the luxury hotel, the deal required the hotel to sign a "card check/neutrality agreement" that would make it easier for hotel workers to unionize.

That agreement, according to the authors of a study on economic equality in the North Bay region, is one of the ways municipalities can help realign an economy that is making the rich get richer and the poor get poorer.

Other recommended solutions include training collaborations to boost low-wage workers up the career ladder, minimum wage increases indexed to inflation, living wage ordinances, more affordable housing, factoring the needs of low-income workers into city planning, migrant worker centers and better support services programs.

Commissioned by New Economy Working Solutions, a local organization that promotes economic equality, the study found that, while the general economic picture got rosier in the North Bay during the 1990s, the growing economic disparity between rich and poor left thousands of working families in poverty.

According to a report on the study presented March 5 at Newman Auditorium on the Santa Rosa Junior College campus, the income of the richest 20 percent of families in Sonoma County increased 24 percent during the 1990s while the poorest 20 percent saw only a 4 percent increase.

In inflation-adjusted dollars, the average yearly household income for the wealthiest 20 percent jumped from $144,476 to $179,615, while the families in the bottom 20 percent experienced an increase of only $990 -- from $23,001 to $23,991.

The report's authors, Nari Rhee and Dan Acland from the University of California at Berkeley, call this an "hourglass" economy.

"North Bay industrial growth since 1990 has produced a polarized job market that is lacking in the middle," they explained in the report's executive summary.

As a result of this uneven economic growth, more than 30 percent of North Bay workers do not earn enough to provide the basic necessities for themselves and their families, which in Sonoma County is $12.56 per hour for a family with two full-time workers and two children.

The hardest-hit group is Latino workers, who make up the largest percent of the working poor, with 43 percent of Latino families in Sonoma County earning less than a living wage.

Jose Silva, a Sonoma County farm laborer for the past 15 years, said he earns only $8.18 an hour.

"We, the farm workers, are making the winery owners very rich," he said through a translator. "It is time they respected us."

Francisco Vasquez, a professor at Sonoma State University, warned that, with Latinos expected to make up more than 40 percent of the state's population by 2020, their poverty would affect everybody.

"Those of us who are thinking of a good retirement had better invest in the Latino workforce so they can support us," he said.

South county supervisor Mike Kerns, another member of the panel that presented the report Saturday morning, called the widening gap between rich and poor "unfair.

"It really comes down to equality," he said. "It is not fair, it is unjust, and we have to do something about it."

One way the county is attempting to address the problem, he said, is by including measures in the general plan update that will make it easier to build affordable housing in the unincorporated areas. This will include zoning code changes, reductions in building restrictions, and a requirement for new developments to include affordable housing or pay in-lieu fees that will go into an affordable housing fund.

"Let's hope that we can be a model here in Sonoma County," he said.

In addition to the ethical considerations, the "hourglass economy" also places a burden on the community because poor families require more health and social services and have less time to care for their families and contribute to the community, according to the report.

"A nurturing family cannot be a nurturing family if they don't have a living wage," Vasquez suggested.

(Contact Lois Pearlman at argus@arguscourier.com)

INCOME GAP AND POVERTY IN THE NORTH BAY

The main findings of a new re-port, "The Limits of Prosperity: Growth, Inequality and Poverty in the North Bay," include:

* Growing income inequality. Income inequality in the North Bay grew incrementally during the 1980s, but spiked sharply during the 1990s.

* Growing ranks of working poor. During the 1990s, the percentage of working families living in poverty and facing serious economic hardship increased. One in six working families in the North Bay do not receive wages and income sufficient to pay for basic needs.

* Emergence of the hourglass economy. The primary cause for growing inequality and poverty 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.

* Latinos are a growing underclass. Latinos, the fastest growing ethnic group in the North Bay, are the most likely to experience working poverty.