County economic boom bypasses working families: Despite boom times in the 1990s, number of working families facing hard times increases
MARCH 23, 2005
Sonoma West Times and News.
by Kia Penso, Sonoma West Staff Writer

SEBASTOPOL - Sonoma County, like most of the North Bay, has experienced dramatic growth in its economy and population over the last 20 years, but most of the benefits of this growth have accumulated at the top of the wage scale.

The number of low-wage jobs has increased but the number of jobs that actually enable a family to live on its earnings has shrunk, resulting in what the report calls an "hourglass economy" - jobs at the top and the bottom and not much in the middle.

These are the findings of a new report on the state of the economy of the North Bay. It addresses the question: Can most people hope to live or get ahead on the types of jobs that are available in the North Bay?

The report, "The Limits of Prosperity," was issued earlier this month by New Economy, Working Solutions (NEWS), a nonprofit research and educational organization. It was written by two researchers at the University of California, Berkeley.

Among the report's most striking findings

+During the economic boom of the 1990s the percentage of working families living in poverty and facing increasing serious economic hardship actually increased in the North Bay. The top one fifth gained 24 percent in earnings during the 1990s in Sonoma, while the bottom one-fifth saw a wage increase of just 4 percent.

+Working families at the middle and bottom trailed far behind the richest families in income growth

+Projected job growth for the region is likely to worsen the income inequality and the poverty as the technology and manufacturing jobs that sustain a middle class are shipped overseas and the demand increases for low-wage service jobs.

+The brunt of the economic inequality is borne by minorities and women.

+Three out of every five new jobs created in the North Bay pays less than $40,000 a year.

Even as income has stagnated for the growing number of low-wage workers, costs such as housing and fuel have risen so as to take an even bigger chunk out of already tight household budgets.

Working families that can't make it to the end of the month resort to food banks so they can eat.

The Redwood Empire Food Bank supplies food to about 49,000 people a month, according to executive director Dave Goodman. Working families make up 38.6 percent of those served, while the remainder is distributed among people on social security, SSI, unemployment and others.

"People tend to think that it's a bunch of lazy people looking for a handout, but the reality is that it's a lot of people who are working who can't make ends meet.

"When gas prices go up you don't get to negotiate to take a dollar off the price. You can't negotiate the cost of your rent. Food is one of the areas where people can actually cut back, with lesser quantity or lesser quality or fast food - fills my belly but has no nutrients.

"So hunger and food insecurity play out in a different way, it's invisible.

"All day long and every day people come in and out looking for food. The phone rings, people are looking for food ... By the time people are looking for food they've hit rock bottom. We already know that they've cut back. There's an immense amount of dignity lost when people go to get that handout for food. They don't want to. Whenever their paychecks or benefits come they don't come for food distribution. Towards the end of the month it picks up."

The report found that even during the economic boom that peaked in 1999, one in five Sonoma County residents was not earning enough to support themselves. The situation was worse for families: 36 percent of residents were not making enough to support a family of four, even with both parents working.

"People ask, 'Why should we subsidize these people?'" said Goodman. "It's a question of who is subsidizing whom. When you can get a burger for $1.99, somebody is subsidizing somebody else's lunch."

Matt Myers, vice principal of Cali Calm?cac Charter School in Windsor, attended a NEWS forum on March 5 to discuss the report and its recommendations.

Myers said the report was in agreement with his own observation and experience in education.

"People assume that education alone will solve the income gap; if the school system improved people would get better jobs. I feel that while we need to do everything we can to improve education, at the same time it is going to take changes in our social structures to really solve this."

Children who don't go to preschool start out at school with a disadvantage, Myers said. Moreover the need to hold sometimes two or three jobs to make ends meet means that parents don't have the time to focus on their children in a way that will help them to learn.

A growing population of young unskilled Latino workers is heavily over-represented in agriculture, service and production jobs, the lowest paying of them all - that is, they work at those jobs in numbers way out of proportion to their numbers in the population.

The report states that Latinos, largely confined to these employment categories, don't pull wages down, as their low wages don't have any direct impact on wages outside of those sectors. But the result, the report says, is the creation of a "minority underclass - as it turns out, composed primarily of Latinos."

Women are likewise disadvantaged. Single mothers are constrained to working part-time because the cost of child care can make working more hours a losing proposition.

It is a pretty bleak picture, acknowledged Marty Bennett, board chair of NEWS.

"Our purpose is to sound the alarm with this report," said Bennett in a phone interview. "There is nothing inevitable about the continued growth of the hourglass economy," he added "It awaits the political will and the political muscle to implement reforms that can put us on the high road."

The high road, Bennett explained, would be employment patterns that are characterized by high levels of skill and education, high productivity and high levels of unionization. The high road, he says, leads to more sharing of prosperity.

"We'll still have a difference between rich and poor, but all income brackets would grow together instead of pulling apart."

The low road Bennett characterizes as a low-wage, low-skill with high turnover.

Much of the initiative for change can come from local efforts, and one of NEWS's goals has been to educate local governments in the county about their options for securing better living and working conditions for their residents.

One idea is the Community Impact Report, which is like an Environmental Impact Report except that it looks at the impact of a proposed development (such as, for instance, a new Wal-Mart in Santa Rosa) in terms of whether it will actually be helping to improve economic life of its workers and the community or whether the larger public will end up subsidizing the gaps between workers' living expenses and their wages.

Cities can also use their redevelopment funds in creative ways to stimulate the creation of good jobs. As the communities along the Russian River contemplate redevelopment, Bennett thinks that this is an opportunity to think about what kinds of jobs and working conditions will be offered to residents.

"You have to look beyond quantity and ask 'what is the quality of these jobs?' I think there's potential on the River to have more economically sustainable jobs there."

Some communities have used living wage ordinances. A raise in the minimum wage is another recommendation.

The report also suggests job/housing linkages for big businesses seeking to get established .

It also recommends that communities support workers' right to organize in unions.

"All of these are not the answer," said Bennett, "but we would say that they are local initiatives that over time can have a major impact."

Without some such steps, Bennett suggests, communities in Sonoma could find themselves in the situation of Silicon Valley, which has found that the gap between wages and housing, resulting in long commutes and high costs for employees, is affecting the bottom line.

"One reason why our report is resonating is that many people can see the consequences of inaction in their lives: they have a longer commute, their kids can't live in the community, they get laid off from Agilent and the only alternative is a low-wage job, their kid comes back and lives in the house after college because they can't afford to move out."

The report cites instances where local governments have worked with business to make jobs more livable for their workers. Bennett hopes that as governments and communities discover what their sources of leverage are, they will also discover the political will.

The report is available on line at www.neweconomynorthbay.org or at New Economy Working Solutions, P.O. Box 6298, Santa Rosa 95406, phone 545-7349, ext. 221.