KPCC's business analyst Mark Lacter talks about wages in the Southland; he also talks about the disparities by gender that continue to exist in the work force.
Susanne Whatley: On Tuesdays we talk about the latest business stories with Mark Lacter. Mark, there has been a lot of discussion about the unemployed, but for the people who do have jobs how do L.A. wages compare with other areas?
Mark Lacter: Well, it all depends on what you’re comparing it to Suzanne – the government just released a report on weekly pay throughout the nation, and L.A. County was averaging just under $1,100. Orange County was at $1,069. Compare that with New York City, which was at almost $1,900, tops of any area in the country. After New York comes Santa Clara, Washington, D.C., and Arlington, VA. L.A. and Orange County did beat the national average of $942, and, just as a point of comparison, Jackson County, Oregon, which is right at the California border, was at $688.
Whatley: Why is L.A. so far down the list?
Lacter: Well, you have a workforce here that is very large and very diverse. So there are lots of folks making great money and lots of folks making terrible money. Compare that with a place like Santa Clara, which doesn’t have nearly the percentage of lower-wage workers that are in Los Angeles. Actually, having so many people at different pay levels can be a plus because it allows, say, a restaurant owner to find all the people he needs, and it also allows a law firm to find all the people that it needs. The problem is that the folks at the bottom have a much harder time moving up the ladder.
Whatley: That’s not the way it used to be…
Lacter: Exactly. The middle class jobs that folks at the lower end might have aspired to are simply not there – at least not without training or education. The government did an interesting study that compared the difference in weekly pay now compared with a generation ago. The basic conclusion was that if you have less than a high school diploma, you’re probably much worse than your father. Even with a high school diploma, you’re worse off. Only someone with a bachelor’s degree or higher is in better shape. And this is a very big deal in Southern California because there are so many workers who don’t have high school diplomas. So the question becomes what happens to them?
Whatley: What about wage differences by gender?
Lacter: Well, the disparities are getting smaller, but a lot depends on the type of job and location. In California, women on average make almost 89 percent of what a guy makes. That’s the highest level of any state, though the District of Columbia is over 96 percent parity, probably a reflection of all the government workers. Now, compare those numbers with, say, Louisiana, which is at 65 percent. Also keep in mind Suzanne that pay parity has a lot to do with how old you are.
Whatley: How so?
Lacter: Women under 35 are earning, on average, about 90 percent of what a guy makes, according to the Labor Department. But what’s interesting (actually it’s kind of depressing) is that once you get to the age bracket between 45 and 54, the disparity widens. Women in that group make only 74 percent of what men get paid. One explanation is that older women came into the workforce when pay inequities were a lot more substantial. They started at such a lower salary base that there was no chance to catch up. Lots of women figured they were better off starting their own businesses – some of them doing better than if they had kept working for someone else.
Whatley: I guess the big concern is just holding onto these jobs.
Lacter: That’s the other problem about working for someone else. After a certain age you run the risk of losing your job – and if that happens in this kind of economy, the chances of getting rehired any time soon are not great. Frankly, the out-of-work folks over 50 or 55 may never find work, certainly not the kind of work they were trained for. And this is one of the reasons why the employment problem is so serious – it’s not just a recession we’re going through, it’s a restructuring of the job market, and for some people, that’s just too much. THANKS SUSANNE
Whatley: Mark Lacter is a contributing writer for Los Angeles Magazine and writes business blogs at LA Observed.com and at kpcc.org.