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We Must Build an Economy that Works for All Angelenos

We need to prioritize those who have been left behind, particularly low‐income Black, indigenous, and communities of color.

The Challenge

Historical systems of discrimination such as prejudiced hiring practices, systemic incarceration of people of color, and redlining have shaped the spatial and economic landscape of Los Angeles, allowing some areas to prosper while leaving others to suffer. Given this legacy, it is no surprise that LA’s poorest areas, predominantly communities of color, have suffered the most during the COVID-19 pandemic.

While COVID-19 has certainly affected us all, it has disproportionately burdened the large percentage of Angelenos already under economic stress. Those who lost employment were disproportionately from communities of color and in vulnerable industries like retail or hospitality. Moreover, although the federal and local governments have mounted major fiscal stimulus efforts, those initiatives were unequally divided – informal workers oftentimes people of color, were frequently left with no relief or protection. Similarly, undocumented workers could not tap into federal relief due to their immigration status. Minority-businesses were also left to fend for themselves, while PPP loans went to wealthier whiter areas, potentially widening existing disparities. 

Even those who kept their jobs or businesses often had to take on unfair and unnecessary health risks. Essential workers, the heroes of this crisis, were forced to put themselves in danger if they wanted to support their livelihoods. Even as the economy has shown signs of recovery, this disparity has persisted. In truth, LA’s unemployment rate has improved significantly since its peak of 18.82% in May of 2020, but this average rate hides significant variation in unemployment by race and income level. 

Economic stress also takes a severe toll on mental and physical health. Those suffering from financial worry are less likely to have health insurance or be able to access affordable care, no matter their insurance status. On a deeper and perhaps more insidious scale, economic stress can be intergenerationally inherited, setting up children for restricted educational opportunities, poor health outcomes, and lifelong income disparities. To be sure, direct discrimination also plays a part in this. In 2018, Black and Latino Angelenos with a bachelor’s degree made $31 and $27 dollars per hour, while the median wage for their white counterparts with similar qualifications was $39 per hour. This discriminatory wage gap is further compounded by discrepancies in the demographics of business ownership, with 12 African American business owners for every 1,000 African Americans in the workforce, compared to 12 white business owners for every 83 white individuals in the workforce. 

The Way Forward

New programs developed during the pandemic are laying the groundwork to address economic stress rooted in inequality. COVID-19 recovery efforts have often been multifaceted, covering basic income initiatives in the City and County of Los Angeles and Long Beach, youth mentorship, community-based wellness, and closing the digital divide. For instance, the $25 million Los Angeles Restaurant and Small Business Fund created mini-grant packages for businesses in underserved corridors. The nonprofit sector has also stepped up; the collaborative “Making Los Angeles Whole” advocacy effort prioritizing the needs of those most affected by the pandemic and helped direct public spending priorities to programs that addressed economic stress. 

However, we cannot keep simply reacting to new challenges. While there are immediate needs that need to be met to keep the most vulnerable communities afloat through the pandemic, we must also recognize that this broken system will continue to fuel inequality until we reform it fundamentally. 

Our economy can be reimagined as one that prioritizes those who have been neglected and shut out. A fair economy empowers and protects workers, ensures equal access to essentials like technology and transportation, makes benefits universal and portable, and puts diversity in hiring and leadership at the center of the economy.