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The State of Working Sonoma Report
The State of Working Sonoma Report

Jobs With Justice Report: "Hourglass Economy" Continues

Dec 22, 2018
by Will Carruthers

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Without legislative action, Sonoma County will become increasingly unaffordable, as middle-class jobs disappear and new wealth continues to move upwards, according to a new report from a local labor organization.

The State of Working Sonoma,” a report published by North Bay Jobs with Justice, tells a worrying tale: In the coming years, the number of low and high-wage jobs will continue to grow, while middle-class positions continue to disappear in a process likely to be exacerbated by the 2017 fires.

While the changes shown in the report reflect economic changes across the nation, the Bay Area’s high cost of living paired with persistently low wage growth for the lowest income families are a devastating combination.

Sonoma County’s economic problems have been exacerbated by the rise of the tech industry and the disappearance of manufacturing jobs, according to the report.

“Manufacturing as a sector directly and indirectly produced a significant share of middle-class jobs. Conversely, the high-tech sector directly produces a large number of high-wage jobs while indirectly creating a mix of high and low-wage jobs,” the report continues. 

Jesús Guzmán, the report’s author is a policy researched and chair of the North Bay Labor Center’s board of directors.

“The State of Working Sonoma” is the latest in a series of reports published by the North Bay Jobs with Justice exploring how different Sonoma County residents are experiencing a changing economy, according to Guzmán.

“I think the findings show that although the recession officially ended in 2010, there are still a lot of people feeling the effects of it,” Guzmán said during a speech at a meeting of the  Alliance for a Just Recovery, a coalition of labor, environmental, housing and community organizations that launched in the wake of the October 2017 fires.

The "Hourglass Economy" Continues

In 2005, New Economy, Working Solutions (NEWS), a now-defunct nonprofit, published a report with very similar projections, outlining the root causes of the “hourglass economy.” 

“A disturbing chain of causation that begins with the polarization of the job market, leads to a sharp spike in income inequality, and ultimately results in the paradox of growing working poverty despite rapid economic growth,” the 2005 report explains.

Many of the trends shown in the 2005 report have continued.

Adjusted for inflation, the bottom ten percent of Sonoma County workers have seen their wages drop by 14 percent since the 1970s while the top ten percent of earners have seen their incomes increase by 26 percent, according to the 2018 report.

The wages of the middle forty percent of workers have remained stagnant during the same time period.

Real Wages Graph

Wage Disparity by Race Grows

In Sonoma County, a person’s race is increasingly a predictor of their place in the economy.

For instance, Latino families are the most likely to be stuck in a condition of working poverty – defined as a household with an income below the poverty rate, $50,200 per year as of 2016, despite having at least one family member working.

In 2016, forty percent of Latino families were stuck in working poverty, compared with 20.1 percent of black families and 10.7 percent of white families in the county.

Working Poverty Graph

Since 2005, the Latino population has grown by 35 percent, currently making up 27 percent of the county’s population, according to the report.

Between 2005 and 2016, the portion of residents working in low wage jobs – defined as below $16.10 an hour, or two-thirds of the median wage – increased from 28 to 33 percent of the population.

Between 2014 and 2024, 83 percent of new jobs in the county’s top ten employment fields are expected to pay less than $15 per hour, with a median wage of $13.09 per hour. 

Housing Costs Leave Many Over-Burdened

At a time of slow wage growth for the county’s lowest earners, housing costs have continued to rise, increasing the economic burden on low and middle-income families still further.

Before the 2017 wildfires, many households were already “burdened” by rent and mortgage payments, meaning they spent more than 30 percent of their wages on housing.

For low-income families, the numbers are stark. ­In 2016, 85.7 percent of renting households with an income below $25,000 per year, 71.5 percent of households making between $25,000 and $50,000, and 31.7 percent of households with a median income of $50,000 to $75,000 were considered rent burdened.

Rent Burden Graph

Between 2007 and 2014, the county and cities issued permits for just 41 percent of the housing units called for by  Association of Bay Area Governments, not nearly enough to offset regional job growth and rising costs.

Then the county lost 5,130 homes in the 2017 fires, worsening the problem further.

“The failure of wages to rise in tandem with spiraling rents and housing costs, the sharp decline of funding for affordable housing, and the destruction of 5 percent of the county’s housing stock during the 2017 Tubbs fire are the root causes of a near catastrophic affordable housing crisis and the displacement of thousands of low income residents,” the report concludes.

The number of displaced residents has yet to be calculated, but academics predict that the fires will displace residents, most likely the region’s poorest workers.

“The past is clear: Fire produces gentrification,” Geographer Mike Davis told the  Los Angeles Times in December. “We are going to see this play out again and again, and it’s just a taste of what will happen with a major earthquake.”

Jobs With Justice suggests a package of legislative changes to ease the economic burden on some of the region’s lowest earners.

“These recommendations include a region-wide $15 minimum wage, rent control and just cause eviction protections for tenants, and increasing the real estate transfer tax on the sale of high-end home to fund affordable housing,” the report concludes.

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