This briefing paper reports on business recovery in buildings damaged during the 1992 civil unrest, the availability of jobs in different areas of Los Angeles, and changes in South Los Angeles’ industry base since 1992. Where were buildings damaged during the civil unrest located? Most buildings damaged during the civil unrest were located on commercial streets in high poverty neighborhoods in South Los Angeles.
Earnings of residents who were welfare-to-work participants grew from the fourth quarter of 1994 through the end of 1999. In 1999 it became convincingly evident that earnings had risen above the highest level in these workers’ previous earnings histories. This important news demonstrates that aided workers have made tangible progress toward self-sufficiency. Despite this progress, only 32 percent of residents who were in the labor market for five or more years had earnings above the poverty threshold of $13,424 for a single parent with two children.
Welfare reform raises the prickly question of what mix of understanding, support and pragmatic pressure is needed to move welfare recipients into employment. Many workers are scrambling to keep the wolf from their own doors in the face of industry restructuring, rapid technological change, and intense pressures to increase corporate profits.
Recent welfare reform legislation mandates that aid recipients become employed and economically self-sufficient. The allowable interval of continuous assistance is limited to 24 months for current recipients and 18 months for new recipients, with a lifetime limit of five years on welfare. At least 150,000 current welfare recipients in Los Angeles County must move into the workforce, securing at least partial employment by December 1999.
The City of Long Beach and other centers of aerospace production that reaped the rewards of the 1980s defense-spending boom must now confront the realities of restructuring. Since World War II, the Douglas Aircraft plant made Long Beach an important center of the US aerospace industry and dominated the local economy. In 1992, the Long Beach aerospace industry employed 36,100 workers, which was 22 percent of the city's total employment. Almost all of these workers were employed by McDonnell Douglas. Long Beach aerospace workers earned a total payroll of over $1.5 billion, which was 30 percent of the city's total payroll. These figures understate the total impact of aerospace on the Long Beach economy, through linkages with firms in other industries that provide inputs to the aerospace industry, and purchases of goods and services by aerospace workers.
This study examines how firms, workers, and regional economic development institution are dealing with the severe effects of defense downsizing in the Los Angeles region. Between 1988 and 1994 the Los Angeles region lost 127,000 jobs in defense-related industries, including aircraft, missiles, instruments, and electronics. The long economic slump set off by defense cuts has incited a major debate between the advocates of regional institution building and proactive economic development and those arguing for the laissez-faire approach of reducing taxes, wages, and environmental costs.