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HomeMy WebLinkAboutMINUTES - 05031988 - S.3 S 3 TO: BOARD OF SUPERVISORS + FROM: Tom Powers, FirsDistrict Supervisor Contra t Costa DATE: Apri 1 26, 1988 County SUBJECT: Widening Gap Between Rich and Poor in Contra Costa County SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECONMENDATION: Refer to the Finance Committee the issue of addressing the concerns of the ever widening gap between the rich and poor in Contra Costa County and determine what if anything Contra Costa County, the cities, state and federal government, and the private sector can do to address this issue. Answers to key questions need to be developed: 1. Why is the gap widening so rapidly in Contra Costa County? 2. What factors are at the root of this gap? 3. What can we do to stop this economic loss? We may wish to appoint a Blue Ribbon Committee of government and private sector persons to answer these questions in Contra Costa County and to work on a regional strategy to reduce this large poverty gap. BACKGROUND: It was alarming that Contra Costa County was identified as the county in the Bay Area by the ABAG statistical analysist to be the greatest growth in the gap between prosperity and poverty. In Contra Costa County, the gap between the two numbers contained in the prosperity gap grew greater than any other Bay Area county. In 1978, the two income levels were just 16. 3% apart. In 1985, the average income was 42. 1% higher than the median income. This gap is widening at the same time we are finding an alarming increase in the homeless population in Contra Costa County, and at the same time the number of medically uninsured and under insured persons is growing rapidly. Also, the dramatic increase in drug addicted young, middle and old aged people may not be so coincidental. CONTINUED ON ATTACHMENT: X YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S) ACTION OF BOARD ON —May,May 3, 1988 APPROVED AS RECOMMENDED OTHER _X_ REQUESTED County Administrator, together with Private Industry Council, Community Development Department, Social Services Department and Housing Authority, to review issue of widening gap between rich and poor in the County and determine the feasibility of a Task Force to address this problem. VOTE OF SUPERVISORS X UNANIMOUS (ABSENT ) I HEREBY CERTIFY THAT THIS IS A TRUE AYES: NOES: AND CORRECT COPY OF AN ACTION TAKEN ABSENT: ABSTAIN: AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. CC: County Administrator ATTESTED egg Community Development Director Phil BAch.elor, Clerk of the Board Social Services Director of Supervisors and Count/ .Administrator Housing Authority M382/7-83 BY DEPUTY While the result of this disparity is not an issue that only local government can handle, it has to be raised so people begin to understand why it occurs and to go about correcting it. I would suggest that we need to have a comprehensive discussion about this out in the community so that the consequences of the widening gap are clearly understood by the individuals we deal with and so we can get input on how to correct the situation. Coincidentally, at the same time this announcement was made, two other announcements appeared in the newspapers which are circulated in Contra Costa County. One was that the Bay Area is suffering from the drain of blue collar jobs, and the other was about lay offs at two local public hospitals. Interestingly enough, the function of our local economy is pretty much tied to international and national events but there are steps we can take locally. We should explore these with our state and federal representatives to determine what activities we should be involved in. 72z- Consumer prices JU m ay Area S costs evenhigh. er By rhe Tribune news www" WASHItiGTON — Paced by a • record jump in the price of ituc clothing, the Consumer Price In- des climbed 0:5 percent 14 gap wider • March,the biggest advance in 14 1�g months, the Labor Department reported yesterday. �n �R�Aze, The news for the Bay Area tS3 (� ' was even worse. The inflation rate for March shot up 1 percent, By.> d De.•YOLY rritww or twice the national rate, with higher housing costs`accounting The Bay Area's rich are for about two-thirds of the over- getting richer,the poor are all rise. getting poorer and the mid- The quickening of inflation at dle class is disappearing, j the national level, to an annual according to a study re- rate of 6.4 percent, was a bit leased yesterday that calls brisker than generally anticipat- the trend"alarming." ed. Economists were divided in The skyrocketing cost of their predictions for coming homes and the loss of blue months,and on whether the Fed- collar jobs are chiefly re- eral Reserve would need to take sponsible for the deepening restraining measures in an elec- division between rich and tion year.The Federal Reserve's poor, according to study main weapon against inflation is author Raymond Bradv of higher'_-iterest rates,which tend she `Association of Bay to suppress economic growth. ":Area Governments. . Inflation fears first had S'BAY,RE.,page A heightened last Friday when the government reported that pro- ducer prices rose in March by 0.6 percent,the biggest increase the Labor Department's branch since last spring. What happens that handles the Consumer Price to prices at the producer level Index, cautioned against draw- tends to show up in consumer ing overly pessimistic conc!u- prices several months later. Patrick C. Jackman, chief of See PSICrS. Back Pa,e co ( ronicic Saturday,April 23, 1988 INCOME CHANGES IN RAY AREA While median income dropped between 1978 and 1985,the richest and poorest income classes in the Bay Area grew fastest based on tax returns reported to the California Franchise Tax Board. ■INCOME BREAKDOWNS ■MEDIAN INCOME Income Class SAY AREA TAX RETURNS Percent DROPS 5.9% (constant 1985$) 1978. 1985 change Adjusted forinflotion $044,000 672,967 867,715 28.9% $22,611 ;21,464 14,000.24,000 409,992 499,744 213% 24,000.36,000 372,720 430,128 15.4% .......... 36,000.50,000 300,246 315,758 5.2% 50,000-75,000 215,349 248,629 15.5% { 75,000 or more 99,392 124,314 25.1% , 1978 1985 Sources:Association of Bay Area Govemments;CoMmia Franchise T"Board Num be s r o f Rich and Paar Gravy As Bay Area Middle Class Falls , By Ramon G.McLeod ward trend in the region's median But this group constitutes only Chronicle Stq ff Writer income has probably continued about 22 percent of the Bay Area's since 1985. National studies have labor force,he said. The two extremes on the shown similar trends since 1973,the Bay Area economic scale—the peak year for median income in the Low unemployment figures rich and the poor—are pulling United States. sometimes mask the fact that tens away from each other rapidly, of thousands of Bay Area residents according to a study released 'The study showed what a lot work in service jobs that have not by the Association of Bay Area of people have known instinctively: kept pace with the increases in the Governments. We seem to have more money yet cost of living during the past-to we aren't doing as well, Brady said. years,Brady said. The report also showed that in Those in the middle-income Meanwhile, the of obs the evolving Bay Area marketplace tYP� j between 1978 and 1985, those with group making $36,000 to $50,000 that once paid middle-income wag- middle-class incomes have barely es — middle management and increased while the numbers of unionized blue-collar work— have wealthy and poor have dramatically been among the slowest-growing in expanded. WWe seem to have the region. The trends were particularly more moneyt et These trends were least evident evident in Contra Costa County, in high-tech Santa Clara County, where those reporting incomes of we aren't doin which also was the only Bay Area less than$14,000 grew by 37 percent g county where median adjusted since 1978 and those reporting in- as well' gross income rose between 1978 and comes in excess of$75,000 increased 1985,Brady said. by 30 percent. In the overall Bay Area,the un Income in Santa Clara CountN der-$14,000 income group grew 28.1 grew just 5.5 percent in Contra Cos- percent, whereas the over-$75,000 ta, close to the regional average of in 1985. group increased by 25.1 percent. 52 percent growth. The fact that Silicon Valley re The Bay Area's median income All of this is the result of the mained indecent shape during the actually declined during this peri- evolution of the Bay Area economy 1982 recession was the primary rea od,said one of the study's authors, into one in which job growth is fast- son the rest of the Bay Area's econc Ray Brady.The study was based on est in low-paying service sector jobs my pulled through better than otk state tax returns and included ad- and in high-paying professional and er parts of the nation,he said. justments for inflation. technical jobs,Brady said. Median adjusted gross income "What's happened is that those was$21,264 for taxpayers who filed in managerial,professional and sct '@!! @�lOrt. 1985 returns, ound.This was Bradyy entific fields did well through the _ °3FEPAGFCII . a 5.9 percent decline from 1978, period of high inflation(1978-81)and when median adjusted gross in- have continued to do so, because come was$22,611 after factoring in they have skills adapted tothe More LoCC1 jVows changing economic structure." he 5EF PAGE:BB THE TRIBUNE, Oakland, Caliora:z y Arealosmg mi'ddle class, sd- dys tu ays nt:Zued :r om Page A-1 This widening gap is alarm- Ba keasffer�n drain of blue-collarjobs eabecause it may point to in- yi Q� se polarization"in the Bay b ea population that would be a By Roland De Wolk agedy"if allowed to continue, The Tdbum based Plant Closures Project began compiling- report concludes. statistics — `well over' 500 companies have' `It will divide people," Brady They would park their cars — big Detroit closed in the gay Area, with the greatest d yesterday. "People will in- steel Fords and Chevys — at High and San concentration in the Eastbay, said Organizer, :asingly think only of their Leandro streets in Oakland and walk from one Leaaaa Noble. gnomic self-interest. The factory to the nest all day long. Only60 t of the le employed in. "Hell, a guy didn't need a car," Doug those usinesses have found new wr , she ength of the middle class has Higgins recalled,"except to replenish catalogs,akened. That's the key." p p added, and of those, 66 percent are making: Highlights of the study, which technical bulletins and maybe keep his lunch." "significantly less" than in their old jobs. imined incomes from 1978 to Hills was chief salesman of Bay Rubber The news for those who have kept middle- 35,include: Co. in East Oakland 25 years ago when selling class incomes in the Bay Area is also bleak. i The well-to-do — manageri- hoses,gaskets and belts required a strong pair The price of housing, having zoomed 87- scientific and professional of shoes and good a product. percent between 1978 and 1965, has also: rkers, who comprise only 22 Today, Higgins, now president of Bay Rub- pushed up rents and made it difficult -for: rcent of the Bay Area popula- her, sends his sales crew from one factory workers to lock in the price of shelter. n and earn $75,000 or so — client to the neat on airplanes. The market forces have taken away the wealthier today than 10 What happened? middle," said Gene Hammel, chairman of UC: in a^o. They left the Bay Area and took with them Berkeley's Graduate Group in Demography_._ i The middle class, which thousands of blue-collar jobs. Today,dozens of "It's not going to stop," said Stephen Bar, ms between,$36,000 and$42,- factories, warehouses and offices are rusting, ton, policy analyst for the Bay Area C64661. ) a year, is steadily splitting empty markers of the past. The Bay Area is positioning itself to Califor- o richer and poorer, and is _ nia the way Marin has positioned itself to the 3erally losing ground against And many of the men and women who once Bay Area. lation. filled these buildings have no trade,no job and "It will be the upscale area you're trying to s The working poor, who earn no money. get into. Everyone else will have to live in average of $14,000, are con- Since 1981 - the year that the Oakland- Stockton. The attitude will be 'tough luck.' ' s uing to grow in number. e The greatest growth in the - )sperity gap has been in Con- sand half making less. ence was less, meaning the ing power since 1978. i Costa County, where the in- When the prosperity gap — shrinkage of the middle class By contrast, upper-income me difference between the the difference between average was less pronounced. In 1978, white collar workers--moved h and poor has nearly tripled. and median income --is high,it the difference was 24.1 percent, ahead of inflation by 2.1 percent. The only Bay Area county means that a few people have while in 1985 the gap had grown Although the Bay Area:has ere the gap closed was Santa extremely high incomes. to 32.3 percent. been suffused with new-jobs in ira, largely due to the growth In Contra Costa County, for "It is highly unlikely that the the last decade,the report marms high technology jobs being example, the gap between the trends identified here are unique that "job production. is- .not ',ed by the middle class. two numbers grew greater than to the Bay Area,"Brady reports enough. It is the type of.jobs:" i Marin and San Francisco in any other Bay Area county. in the study. Brady explained -that_ be mties continue to have the In 1978,the two income levels In the gay Area,residents as a means "jobs that have incomes lest gap between rich and were just 16.3 percent apart. In whole enjoyed a 71.9 percent in- growing faster than inflation." V. 1985, the average income was -come growth in the last ten and "unfortunately, that means 3rady explained that the pros- 42.1 percent higher than the me- years. professional,scientific and high -ity gap is calculated by com- than income. However, severe inflation skill jobs." ring the average income of all The study attributed the divi- from 1976 to 1981 robbed resi- As he has in other recent y Area residents to the medi- sion to the increase of manageri- dents of most of the money, the ABAG studies, Brady emp6a- income. al and professional workers in report states. sized that economic growtk is a Che average income is what the central county cities such as Housing prices in particular regional problem that will.grow idents would earn if everyone Orinda, Lafayette, Walnut were responsible for much of the increasingly rancourous:as the i the same salary, if all in- Creek,Danville and San Ramon. lass, as tbose costs went up 87 stakes mount me were divided equally At the same time, large num- percent in the Bay Area and to- "Contra Costa is already.tear- iong all workers. bers of near-poverty-level in- day are the highest prices of any ing itself apart over it,"*Brady rbe median income is the comes remained in west Contra urban area in the United States. said yesterday, referring to'the ddle point between the richest Costa areas such as San Pablo More than half of Bay Area slow-growth movement follow- i poorest workers, with half and Richmond. residents in the study actually ing the economic boom:.of.Lbe wage earners making more In Alameda County,the differ- lost about 6 percent of their buy- last decade."