Thread: Los Angeles too expensive for most Hispanics, new study finds

Los Angeles too expensive for most Hispanics, new study finds

• More than three-quarters of Hispanics in the Los Angeles metropolitan area have insufficient incomes to make ends meet, compared with about one-third of whites and nearly two-thirds of African-Americans, according to a study by the Washington, D.C.-based Economic Policy Institute.

By BRENDA GAZZAR | bgazzar@scng.com | Daily News
PUBLISHED: March 18, 2015 at 10:46 pm | UPDATED: August 28, 2017 at 7:00 am


If it weren’t for his children, Joe Sepulveda would gladly leave Los Angeles for a cheaper place to live.

Sepulveda, 41, of Reseda, who is unmarried and pays child support for his five kids, was laid off from his job as a drug and alcohol counselor in January and is now living on his unemployment insurance and earnings from odd jobs, he said.

Even when he was fully employed and with the relatively low rent he pays to rent a room, he still found himself struggling to cover his costs.

“It’s very expensive” here, Sepulveda said, while waiting to pick up bags of groceries during his first visit to the West Valley Food Pantry in Woodland Hills on Wednesday. “I would move if it wasn’t for my kids. A lot of my friends are in Arizona. They’re out of state and they’re living better.”

• PHOTOS: West Valley Food Pantry

More than three-quarters of Hispanics in the Los Angeles metropolitan area have insufficient incomes to make ends meet, compared with about one-third of whites and nearly two-thirds of African-Americans, according to a study by the Washington, D.C.-based Economic Policy Institute.

In addition, about 55 percent of all single, non-elderly adults and individuals in non-elderly families — or families that have at least one member below the age of 65 — have fallen short of a basic family budget threshold that would enable them to have “a modest but secure standard of living,” the study found.

Two-thirds of all children in the region also live in such families that are struggling financially.

“That’s pretty striking. It means there are many people who are barely getting by,” said Elise Gould, senior economist at the economic think-tank and a co-author of the study released last week. “They are struggling to make ends meet. They’re not able to invest in their future or the future of their children.”

To secure an adequate standard of living in the metro area that encompasses Los Angeles and Orange counties, a single individual needed about $34,300 in 2013, a couple needed a budget of $46,750, and a family with one parent and one child needed $60,600, the study found. A family with two parents and two children needed $72,697 while a family with two parents and three children needed $91,950.

The study evaluated income levels while taking into account the region’s expenses for housing, food, child care, transportation, health care, taxes and other necessities. The study, which used data from the Census Bureau’s American Community Survey, used modest budget thresholds that leave little or no room to invest or save money, Gould said.

“In some sense, it’s not surprising because of the high housing costs of California, and particularly Los Angeles,” said Manuel Pastor, a professor of sociology and American studies and ethnicity at USC. “It’s a combination of relatively low wages and high housing costs.”

Homebuyers needed to earn a minimum annual income of $91,550 to qualify for the purchase of a $452,140 statewide median-priced, existing single-family home in the last quarter of 2014, according to the California Association of Realtors.

About 78 percent of Hispanics in the L.A. metro region fall below the family budget line and thus face the highest share of “income insufficiency” while whites face the lowest share at 34 percent, the study found. About 65 percent of African-Americans fall below the family budget line, while 47 percent of Asians, Pacific Islanders and individuals of other races fit this category.

“It is pretty striking that there are such racial differentials in this experience,” Pastor said. But “it’s not that surprising for people who know the data because there’s in particular a significant challenge with the Latino population, which has a large immigrant presence and a significant group of working poor.”

Those lacking U.S. citizenship were especially vulnerable.

Nearly 80 percent of noncitizens in the region, including undocumented immigrants who are more vulnerable to exploitation, were below their family budget threshold in 2013, the study found.

It is noteworthy, however, that foreign-born immigrants who became U.S. citizens fared slightly better in having sufficient income to cover their basic expenses than U.S.-born citizens, Pastor said. Many would attribute that to immigrants working a great deal and their propensity to start businesses, which improves their lot, Pastor said.

African-Americans are also vulnerable to financial insecurity due to disadvantages they face in the workforce, partly because of education issues, high single-parent households and high incarceration rates that follow them into the market, Pastor said.

The study’s findings, which were released about six months after L.A. Mayor Eric Garcetti proposed raising the city’s minimum wage from $9 to $13.25 an hour by 2017, offer “an opportune moment” to examine how current income levels compare with actual expenses in the region, the study’s authors say.

With so many people with insufficient incomes, “policies should be considered to boost the incomes of people in L.A.” or to “help bridge the gap between the wages people make and the wages they need to make ends meet,” Gould said, noting that could range from increasing the minimum wage to determining what kind of businesses officials would like to attract.

Since Garcetti took office, the city’s economy has added tens of thousands of jobs but the decline in middle and working class wages “is holding back our city’s recovery,” Jeff Millman, a spokesman for the mayor, said via email.

“Mayor Garcetti has proposed raising the minimum wage to create broader prosperity and alleviate poverty for the 1 million Angelenos who are being left behind in our economic recovery,” he said.

The study also found that going from a one-person budget to one with a parent and two children doubles one’s expenses.
“It’s not because kids are eating so much, it’s primarily because of child care,” Gould said. “If you want to work and you have kids, particularly young kids, it can be difficult to find affordable child care.”

In a one-parent, one-child household, child care costs made up about 13 percent of the family’s budget, which was more than food (7.8 percent), transportation (7.6 percent) and health care (7.6 percent.) Child care made up about 15 percent in a household of two parents and two children, according to the study.

http://www.dailynews.com/2015/03/18/...w-study-finds/

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