Income Inequality

The rise in inequality experienced in the United States in the past three-and-a-half decades is not just a story of those in the financial sector in the greater New York City metropolitan area reaping outsized rewards from speculation in financial markets. While many of the highest-income families do live in states such as New York and Connecticut, IRS data make clear that rising inequality and increases in top 1 percent incomes affect every state.

The rise between 1979 and 2007 in top 1 percent incomes relative to the bottom 99 percent represents a sharp reversal of the trend that prevailed in the mid-20th century. This earlier era was characterized by a rising minimum wage, low levels of unemployment after the 1930s, widespread collective bargaining in private industries, and a cultural and political environment in which it was outrageous for executives to receive outsized bonuses while laying off workers. Today, millions of Americans feel tremendous anxiety about their grasp on the American Dream.

In 2013, income inequality was much higher in many states, metropolitan areas, and counties than for the United States overall. In 2013 the top 1 percent of families nationally made 25.3 times as much as the bottom 99 percent (Sommeiller, Price, and Wazeter 2016).

Publications

Raise LA: How Good Hotel Jobs Will Boost Local Businesses, Strengthen Neighborhoods and Renew Our Economy

Poverty jobs in LA’s hotels are exacerbating the problem of poverty throughout the city. Workplace standards for tens of thousands of LA’s hotel workers remain among the lowest of the city’s major employment sectors. Hotel workers are a key piece of LA’s highly successful tourism industry, but maintaining standards for workers has been largely ignored as hotel operators have focused intensely on boosting their bottom lines by increasing worker productivity.

Establishing a minimum wage for workers in LA’s large hotels will directly address the problem of growing poverty in the city of Los Angeles and will stimulate our local economy by an estimated $71 million per year in increased local consumer spending and related economic activity.

The Road to Shared Prosperity: The Regional Economic Benefits of the San Pedro Bay Ports’ Clean Trucks Program

The trucking system at the Ports of Los Angeles and Long Beach is broken. As currently structured, this industry fails workers, businesses, neighbors, and anyone who breathes the air and drives the highways in Southern California. Port trucking is a chaotic, fragmented market, dominated by hundreds of tiny, undercapitalized motor carriers and brokers who earn profits only by undercutting market standards, creating a race to the bottom. Motor carriers at the Ports overwhelmingly misclassify drivers as
independent contractors rather than employees, allowing the trucking companies to disclaim responsibility for the conditions of the drivers and their trucks.

The key to solving this long-festering problem lies in the Ports’ role as landlords and proprietors of these valuable public assets. The Ports have an interest in clean, safe, sustainable growth, as well as a stable and secure Port complex and a continuing source of revenue. The Ports can achieve these goals by entering into a direct contractual relationship with responsible motor carriers who meet higher standards. This market-based approach will ensure fair competition based on efficiency and quality of service.

This report examines the benefits to workers and communities of a Clean Trucks Program.

Examining the Evidence: The Impact of the Los Angeles Living Wage Ordinance on Workers and Businesses

Local governments are increasingly turning to living wage policies as a means to improve job quality for low-income workers. To date, more than 100 local governments around the country have passed living wage ordinances. Living wage laws set wage and benefit standards for workers employed by government contractors or other firms that have a financial relationship with the government. These laws have, in part, been a response to the stagnation of state and federal minimum wages, which have failed to keep pace with
inflation. In addition, these laws represent a reaction to the growing interest in contracting out city services as a means to cut costs, a strategy that advocates argue penalizes the low wage workers who perform city services. However, despite the prominence and continued growth in the number of living wage ordinances, only a handful of retrospective studies of firms have been published on the impacts of these laws. This study is the first to combine a random sample survey of affected firms and workers, a control group analysis of low-wage employers, and a matched firm and worker dataset. These elements make us confident that our survey results both isolate the effects of the living wage and accurately represent the experiences of living wage workers and firms.

As living wage laws have grown in popularity, so have debates about their effectiveness. Although these laws typically raise standards for just a small segment of jobs in a local labor market, they can focus public discussion on the issue of job quality. Proponents of
the law argue that the city should not be a low-wage employer, and that living wage policies put much-needed money in the pockets of low-income families, while also setting standards that have an impact beyond those directly affected by the law. Business groups have made similar arguments as those made against minimum wage hikes: that living wage laws will result in job reductions, harm small businesses, and will hurt the very population the policy is intended to serve. This study evaluates the experience in Los Angeles in order to determine what actually occurred after the living wage went into effect in that city, as well as provide broader lessons that contribute to the national debate.