CALIFORNIA TRAILS NATION IN WAGES.

Byline: Chris Sieroty Staff Writer

Despite an economic expansion that by many measures has surpassed all expectations, the income of the average California family of four has dropped below that of the nation, concluded a survey released today.

The study by the Sacramento-based California Budget Project compared wages and incomes of California workers and their families over the recent decades with the nation as a whole.

Since 1994, the state has added more than 1.5 million jobs, and total personal income has risen by more than one-third. Yet, the rewards have not been widely shared among the state's workers and their families, the study found.

Despite falling unemployment and tight labor markets, the survey found that average incomes and hourly wages are lower than they were a decade ago, after adjusting for inflation.

Jean Ross, executive director of the nonprofit think tank, said her researchers' aim was to track the economic well-being of California workers.

``The single most surprising finding was that the purchasing power for hourly wages in Los Angeles County is declining,'' said Ross. ``That speaks to a lot of the restructuring that went on during the recession in the 1990s.''

``People have found new jobs, but the pay is less and without the same benefits and pension plans they had before,'' she said.

Aerospace workers, for example, who used to earn from $18 and $22 per hour before being laid off are now earning between $12 and $15 per hour without their previous pension benefits, she said.

``Without those higher-paying jobs, people are not able to replace that standard of living in Southern California,'' Ross explained.

Former aerospace workers may have had a tough time recently making ends meet, but for those fighting to stay above the poverty line, the past 20 years have been anything but easy.

A full-time worker needed to earn in excess of $8.19 per hour in 1999 dollars to rise above the federal poverty line. Since 1979, the share of the California work force earning poverty-level wages has increased by 56 percent.

Nationally, the share of poverty-level earners rose between 1979 and 1989 but declined in the last 10 years, the survey found. In contrast, California's share of poverty-level workers has increased steadily over the past two decades to 28.7 percent of the state's hourly wage earners.

Jack Kyser, chief economist with the Los Angeles County Economic Development Corp., said immigration also has contributed to the high number of workers earning poverty-level wages.

``A lot of these people have minimal work skills, English skills and education, making them only eligible for low-paying jobs,'' said Kyser.

To help minimize the problem, Kyser suggests the five-county region which includes Los Angeles, San Bernardino, Riverside, Ventura and Orange counties focus on attracting additional manufacturing jobs.

``Most cities focus on retail,'' he said. ``What they need to do is focus on small- to medium-size manufacturers who can take the recent immigrant, train them and move them into the middle class.''

Although technology is slowing overall, there has been some rebirth in aerospace with S.R. Technics moving to Palmdale, Kyser said.

Also the Bay Area's wage growth exceeded that of Los Angeles County, the state, and the nation over the past decade, the survey said. That wage growth had Los Angeles workers earning poverty-level wages at twice the rate of Bay Area employees last year.

Shirley Svorny, a labor economist at California State University, Northridge, called the data used to compile the survey flawed.

``One of the problems is that they are comparing 1989 and 1999,'' Svorny said. ``You can't compare 1989, which was a boom year, to last year, in which Los Angeles was still recovering from the recession of the early to mid-1990s. You need to compare one peak economic year with another.''

The survey found that 34.4 percent of workers in Los Angeles lived in poverty compared with just 17.6 percent in San Francisco.

``We were hit much harder by the recession than San Francisco, because a lot of the recession was defense-related,'' she said. ``In 1996-97, Southern California started to recover from the recession.''

While comparable wage data were not available for the state's smaller metropolitan and rural areas, Ross said available information suggests that these areas have fared less well, too.

Fourteen of the state's 58 counties - all either rural or in the Central Valley - had double-digit unemployment rates in June of this year.

Meanwhile, income earned by the median four-person California family was lower than that of the nation in 1998. Moreover, the purchasing power of that four-person family declined by $1,069 between 1989 and 1998, while that for the United States as a whole increased by $2,477.

California's wage trends differ significantly from those of the nation as a whole.

Nationally, the hourly earnings of low-wage workers increased dramatically from 1989 to 1999, from $6.97 to $7.35, in inflation-adjusted dollars.

The earnings of California's low-wage workers fell from $7.32 to $7.05, after adjusting for inflation, a shift from substantially above to below the nation as a whole, the study said.

CAPTION(S):

2 charts

Chart: (1) CALIFORNIA'S SOUR WAGES

(2) POVERTY RATES RISE IN LOS ANGELES COUNTY

SOURCE: California Budget Project