Part of a common site for Neighborhood Councils and Homeowners groups of the San Fernando Valley and information concerning the Valley issues Information about the November 5, 2002 election
A joint project of Los Angeles Alliance for a New Economy and UCLA Center for Labor Research and Education
Full report in original format
Table of Contents
Acknowledgements
Executive Summary
Section One Introduction
Section Two: A Closer Look at Poverty:
Section Three: Charter vs. General Law Cities: ;
Section Four: Lost in Transition? (Part I): ;
Section Five: Lost in Transition? ;
Section Six: A Good Job Is Hard to Find: The threat to economic
security for thousands of public employees and their families,
particularly lower-earning workers of color.
The City’s Workforce Under Secession
Section Seven: Conclusion: A brief conclusion about the failings of the two secession proposals, and the hope for meaningful public dialogue that considers positive solution’s to the region’s problems
While city ordinances and programs work to alleviate need in our communities, unionized public employment functions as one of the most effective anti-poverty tools, providing good salaries, benefits and worker protections.
Seven of the ten largest employers in the five-county area surrounding Los Angeles are, in fact, government or public agencies. {45}. With about 34,500 employees, Los Angeles City ranks ninth as a leading employer. {46} For that reason, significant changes to the city’s workforce, as may occur under secession, mean significant changes to the overall job market in Los Angeles. More pointedly, potential job losses or salary reductions could mean the difference between poverty and financial stability for a large number of city workers and their families.
Many city employees who would be paid poverty-level wages for comparable work in the private sector are able to raise their families’ standard of living through public employment. The table below compares the salaries of typical low-wage earners in the region’s general labor force with those of city employees.
Annual Wage Comparisons Between L.A. City Employees
and Workers Earning the L.A. Metro Median (2000) {47}
|
L.A. Metro Median |
City of Los Angeles |
|
|
Parking Attendants |
$14,019 |
$21,604-$24,531 |
|
Janitors |
$17,596 |
$24,603-$28,496 |
|
Gardeners/Caretakers |
$17,388 |
$28,791-$36.995 |
|
Clerk Typists |
$23,483 |
$26,997-$36,691 |
|
Library Clerical Assistants |
$19,760 |
$28,035 |
In particular, unionized employment offers opportunities for workers of color, who face markedly reduced earnings and options in the private job market. In 2001, for example, African-Americans employed in union jobs nationwide averaged an annual salary of $31,356, while non-unionized African-American workers earned $24,076 per year. The difference was even more significant for Latino workers, who nationwide on average earned $30,056 per year in unionized employment, and only $20,696 per year in non-union jobs. {48}
While union jobs benefit people of color across the country, unionized municipal employment represents a significant economic opportunity for people of color in Los Angeles. Sixty-one percent (61%) of the Los Angeles City workforce is comprised of people of color. For example, although African-Americans represent only 11 percent of the city’s overall population, they make up 21 percent of city employees. Asian-Pacific Islanders constitute 10.2 percent of the city’s population, but represent 14 percent of the city workforce. {49} To index
The method by which a new city gains its workforce is complex and controversial. During study of the viability of Valley secession, numerous ideas were suggested about how to make the transfer of employees from the remaining city to the new city. One plan was to transfer a fixed number of employees, determined based on varying factors. In some cases, analysts used overall percentages of department employees to assign staff; in other cases, they used the number of staff already assigned to field offices in the Valley. {50} There was no agreement, however, whether the workers would be transferred based on skill level, seniority, or the fact that they are currently employed in Valley facilities, nor was there agreement about whether the workers would have any choice in the matter.
The process that was ultimately adopted in the secession plans for both the Valley and Hollywood areas was that the remaining city would transfer the workers’ salaries (as well as any funds covering related costs) rather than the actual employees. For example, the proposed Valley city would be allocated 35.51 percent of the City of L.A. salary budget for the Bureau of Street Services—enough to fund 441 employees. In total, the Valley would be allocated funds for 9,219 positions {51}; Hollywood would receive funds for 1,591 positions. {52} Lacking any government infrastructure, the new cities would then turn around and contract out the jobs back to the City of Los Angeles for the first year of incorporation, what is considered the "transition period" starting July 1, 2003, and ending on June 30, 2004. In other words, the workers would remain employed by the City of Los Angeles, at least while under contract during the transition period, yet the new cities would have jurisdiction over the funding in the city budget that pays these employees’ salaries. What happens to either the workers or the jobs after that is anyone’s guess. To index
If a new city’s elected officials decide to cut any services during the transition period, they can do so as long as they give Los Angeles City six months’ notice. They may also decide to extend their service contracts with the city past the first year. Either way, city employees and residents who depend on their services are left with profound uncertainty about the future. .
Equally concerning, the final secession plans appear to circumvent California Government Code sections specifically intended to protect government workers in the event of secession. {53} When workers are transferred from an existing city to a new city, the new city is required to honor employees’ current collective bargaining agreements, provide the same level of retiree benefits, and recognize the unions who represent affected employees. However, because the secession plans involve the transfer of funds rather than actual workers, no responsibility for employee protections is transferred to a new Valley or Hollywood city.
Employees who work in the new cities would retain their current job protections only while they serve as L.A. City contract workers. Even so, the City of Los Angeles may be forced to lay off workers due to insufficient funds, which may very well occur if the new cities, given their own
serious revenue constraints, decide they do not want or have the resources to fund contracted services. The only guarantee left to L.A. City workers is the right to be laid off in an orderly fashion.
There are three likely personnel scenarios which may occur separately or in some combination during and/or following the one-year transition period:
Scenario 1: A new city cuts positions within departments or cuts entire departments.
Secession proponents in the Valley and Hollywood have vowed to improve municipal services while also cutting taxes. And yet the two new cities would start out with severe revenue constraints. In order to make up for budget shortages, it is likely that a new city would cut municipal employee positions or even eliminate whole departments. Again, in order to achieve "fiscal viability," Hollywood secession proponents had proposed eliminating the commissions on Children, Youth and their Families and the Status of Women, as well as the departments of Aging, Sanitation, Street Lighting, Disability, Emergency Preparedness, Environmental Affairs, Transportation, Neighborhood Empowerment, and Cultural Affairs.
Scenario 2: A new city creates its own departments.
It is likely, in any case, that a new city ultimately would want to create its own departments and hire its own employees, rather than accept employees transferred from the City of L.A. A new city would open up hiring for these positions and would be under no obligation to hire current workers at their present salaries, benefits and pensions, nor would a new city be obligated to recognize any municipal workers’ unions.
If city employees decide to reapply for jobs they now hold, there will be no guarantee that they will be: (1) rehired; (2) rehired at current salary levels; and (3) placed in their current ranking or position of seniority. {54}
Scenario 3: A new city contracts out jobs.
It is highly conceivable that the new Hollywood and Valley cities could simply opt not to hire for some positions and contract out municipal services to entities other than the City of Los Angeles. As general law cities, the new municipalities would not have the worker protections adopted by the City of Los Angeles, including the living wage law and other city contractor requirements detailed above in "Lost in Transition (Part I)." In fact, the new cities may be unable to duplicate Los Angeles’ worker-protection standards. As general-law cities, they would be subject to the state’s Public Contract Code, which may well prohibit them from re-enacting Los Angeles’ ordinances. The state’s rigid "lowest responsible bidder" requirement, which would govern in the new cities, encourages a race to the bottom in worker wages. ; To index
Secession presents all city workers with the threat of job insecurity, but workers on the lower end of the city pay scale would be especially vulnerable to any losses resulting from cuts in positions, salaries, pensions, or benefits. Overall, there are approximately 10,800 city employees whose positions may be transferred to the new cities; of those, more than 1,000 make under $33,000 per year {55} (less than 200% of the federal poverty level for a family of four). Those employees, and their families, may be in danger of slipping into poverty if their jobs are cut or salaries diminished.
The employees most at risk are predominantly service and administrative workers, including over 500 clerks, clerk typists, clerical assistants, and messenger clerks. {56} Seventy-eight percent (78%) of the city’s administrative support positions are filled by people of color, predominantly women. {57} Also threatened are 345 service and maintenance employees, including: maintenance laborers, warehouse and toolroom workers, gardeners and janitors. Again, those employees are primarily people (men) of color, who staff 80 percent of city service and maintenance positions. {58} It is precisely these employees who have the greatest need for unionized public employment, since comparable jobs in the private sector pay considerably lower wages. (See wage comparison chart on page 30.) Financially speaking, they—and their families—have nowhere to go but down. To index
Secession is an angry reproach to the complex problems that beset the City of Los Angeles. It not only fails to provide solutions, it could profoundly hurt the most vulnerable city residents.
This study concerns itself solely with the plight of the struggling and disadvantaged in the San Fernando Valley and Hollywood. It makes the following conclusions:
The depth of poverty and need in Los Angeles require regional solutions; secession would only increase fragmentation in government decision making and the provision of public resources.
The new cities’ municipal authority would be constricted under the state’s general laws, hobbling their ability to gear laws and services for their communities.
Residents and workers in the new cities would lose powerful legal protections that are currently provided by the City of Los Angeles.
The new cities’ fiscal constraints could cause cuts in city programs serving the most vulnerable and disenfranchised residents.
And lower-earning city workers—predominantly people of color—and their families would suffer considerable financial insecurity through negative changes in municipal job opportunities.
Although this study’s authors spent a great deal of time pouring through the various secession proposals and analyses, we found a deeply worrisome lack of detail about how the new cities would improve services for their residents—one of the key arguments on behalf of secession. Of particular concern was the lack of detail about the areas’ future finances, and their seeming instability. Many of the pro-secession movement leaders have been working on this issue for a quarter-century, and yet they have never offered a detailed plan on how exactly the new cities will function: what services they will provide and how they will pay for them. Secession presents far too much uncertainty for the residents of Los Angeles, particularly those most vulnerable to decreases in public resources and aid.
This study does not assess the relative merits of some of the policy proposals intended to address public discontent without going to the extreme position of breaking up the city. Nonetheless, we hope that the issues raised through the various secession campaigns continue to evoke considered, meaningful public dialogue about how to increase government responsiveness, improve and expand city services, and increase public participation in decision making. ; To index
1 League of Women Voters of Los Angeles; Report on Secession, April 2002.
2 The Los Angeles of today is a far cry from the Anglo-dominated city of the 1950s. Although racial demographics do not demonstrate the rich diversity of the city’s cultures, it does reflect the mix of ethnicities: 46.5 percent Latino; 29.7 percent White; 11.2 percent African-American; 10.2 percent Asian-Pacific Islander; 0.8 percent American Indian; 1.6 percent Other or Mixed Race.
3 U.S. Census Bureau; Demographic Profiles: Social, Economic and Housing Characteristics; May 2002. 4 U.S. Census Bureau; Census 2000.
5 Looking at demographic trends by comparing household income, however, may actually mask the extent to which the city’s middle class has declined. A "household" can contain more than one family, so may not best reflect actual income status. Los Angeles has an extreme affordable housing shortage in which there are a growing number of units considered overcrowded and severely overcrowded—which also means that there are more residents to contribute to a household’s income. Further, household income comparisons do not reflect cost-of-living differences. Los Angeles is one of the highest cost-of-living cities in the U.S.
6 Hollywood and Valley secession-area poverty estimates are provided by the Mexican American Legal Defense and Educational Fund in Los Angeles, and are based on Census 2000 data. Census analysts had to formulate estimates, since the secession areas do not line up with Census block-level poverty data.
7 LAANE; The Other Los Angeles; August 2000.
10 Tai Glenn and Jenny Hontz; Working Toilets Should Not Be a "Maybe" in L.A. Housing; Los Angeles Times, 2001.
11 L.A. Housing Crisis Task Force; In Short Supply; May 2000.
12 U.S.Census Bureau; Census 2000.
13 Institute for the Study of Homelessness and Poverty at the Weingart Center; Just the Facts: Housing and Poverty in Los Angeles; July 2001.
14 Fred Silva; Local Governance and Finance Reform: Dej~ vu All Over Again; Western City Magazine; November 2000.
15 See Ca. Const. Art. XI, sec. 3.
16 See Ca. Gov’t Code §65800 et seq.
17 SeeCa. Pub. Cont. Code § 20162.
18See Government Code § 53725.
19See, e.g., Cal. Sts. & High. Code §§ 10000 et seq.; Cal. Sts. & High. Code §§ 36500 et seq.
20 Los Angeles Administrative Code (LA AC) § 10.37 et seq.
21 The figure of 12,000 living wage workers was supplied by the Los Angeles City Administrative Officer.
25 Los Angeles Municipal Code (LA MC) § 151 et seq.
27 Information provided by the Los Angeles City Housing Department.
28 Information provided by the Los Angeles City Housing Department.
31 Information provided by the Los Angeles City Housing Department.
36 California Legislative Analyst’s Office; Understanding Prop. 218; 1996.
37 California Budget Project; Proposition 13: Its Impact on California and Implications for State and Local Finances; April 1997.
38 Fred Silva and Elisa Barbour; The State-Local Fiscal Relationship in California; Public Policy Institute of California; 1999.
40 Steven Erie, Christopher Hoene, Gregory Saxton; Coping with Loss of Fiscal Autonomy; Claremont Research Institute.36
41 Ca. Government Code § 56375.1.
42 Most notably, the new cities, under the state’s general law provisions, would be unable to levy the documentary transfer tax. Furthermore, the new cities would have to provide the City of Los Angeles mitigation payments that cover the cost of the city’s loss of documentary transfer taxes.
43 In fact, the new cities would not be allowed to spend as much CDBG funds on social services as the city does, because L.A. City is granted a special 25% allowance on public services, whereas most cities can spend a maximum of 15% of the annual grant on public services.
44 Total CDBG funds also include resources that augment the annual allocation.
45 The five-county area includes: Los Angeles, Orange, Riverside, San Bernardino, and Ventura
counties. City of Los Angeles 2000 Economic and Demographic Information.
47 U.S. Dept. of Labor, Bureau of Labor Statistics; 2000 Metropolitan Area Occupational Employment and Wage Estimates, Los Angeles - Long Beach, CA PMSA. City of L.A. numbers are from: Hamiltion, Rabinovitz & Alschuler, Inc.; The Division of Service Cost Burdens Following Separation of the San Fernando Valley from the City of Los Angeles: An Independent Appraisal; June 18, 2002; and The Division of Service Cost Burdens Following Separation of the Hollywood Area from the City of Los Angeles: Final Report of An Independent Appraisal; July 3, 2002.
48 U.S. Dept. of Labor, Bureau of Labor Statistics; Median Weekly Earnings of Full-time Wage and Salary Workers by Union Affiliation and Selected Characteristics; 2001.
49 Latinos, on the other hand, represent 46.5 percent of the population, but only 26 percent of the city’s workforce.
50 Allocation of staff—or staff salaries—was one of the most controversial aspects of the secession proposals. The City of Los Angeles wrote or commissioned many detailed studies that found the secession proposals’ allocation of staff deeply flawed.
51 This is the figure estimated in: Hamilton, Rabinovitz & Alschuler, Inc.; The Division of Service
Cost Burdens Following Separation of the San Fernando Valley from the City of Los Angeles: An
Independent Appraisal; June 18, 2002; with the addition of the 12 Department of Neighborhood Empowerment employees who originally were not included in the LAFCO consultant’s allocation of employees, but who have since been added by LAFCO. See LAFCO; Special
Reorganization of the San Fernando Valley: Executive Officer’s Supplemental Report; Fiscal Tables, page 7; May 20, 2002.
52 Hamiltion, Rabinovitz & Alschuler, Inc.; The Division of Service Cost Burdens Following Separation of the San Fernando Valley from the City of Los Angeles: An Independent Appraisal; June 18, 2002. And Hamilton, Rabinovitz & Alschuler, Inc.; The Division of Service Cost Burdens Following Separation of the Hollywood Area from the City of Los Angeles: Final Report of An Independent Appraisal; July 3, 2002.
53 Ca. Government Code § 56844.2 and 56888.
54 All seniority may in fact be wiped out, especially since, being a general law city, any new city would lack the Los Angeles civil service system, which is part of the L.A. City Charter.
55 Hamiltion, Rabinovitz & Alschuler, Inc.: The Division of Service Cost Burdens Following Separation of the San Fernando Valley from the City of Los Angeles: An Independent Appraisal; June 18, 2002; and The Division of Service Cost Burdens Following Separation of the Hollywood Area from the City of Los Angeles: Final Report of An Independent Appraisal; July 3, 2002. This report lists 904 positions paying less than $33,000 that would be allocated to the Valley and Hollywood. But because this breakdown includes only those workers the City of L.A. can do without in case of secession, an addition of 10.785 percent is used to reflect the additional worker salaries actually allocated by LAFCO, bringing the number of lower-income workers at risk to 1,165.
56 Los Angeles City Personnel Dept.; Workforce Analysis Report No. 7, Period Covered 01/01/02 thru 06/30/02, Job Category Totals for Full Time Employees.