What are the Economic Impacts on Communities as They Change from Black to Latino

1
What are the Economic Impacts on Communities as
They Change from Black to Latino?

• Terra Bennett
• Sandra Kim
• Michael Park
• Economics 116
• Professor Conrad
• 5/02/05

2
Current Context

• Los Angeles Mayor Elections
• Highlights the tension between the Latino and
  Black communities
• Addresses the economic situation of the city and
  the perceived different interests of the two
  communities

3
Economic Sociological Theories

• Theories
• Living Arrangements of Latino Immigrants
• Job Searching Methods
• Ethnic Economy (food service and retail trade)

• Predicted Effects
• Higher rent
• Higher employment rate
• Greater concentration in low-wage jobs
• Higher rate of entrepreneurship

4
Economic Changes

• Total population in both cities is increased,
  driven primarily by the growing Latino population
• Inglewood experienced more dramatic change in
  industries of employment than Compton
• Median Household Income experienced dramatic
  changes over the past 30 years
• Between 1990 and 2000, both communities medians
  lost most of the gain made between 1980 and 1990

5
Context

• Increased Latino Immigration
• Economic Restructuring in Los Angeles

6
Factors for Increased Latino Immigration

• Amendment to Immigration and Nationality Act in
  1965
• Globalization Latin America experienced great
  political and economic turmoil (1980 1990)
• Many immigrants and refugees arrived as
  uneducated and low skill workers

7
Economic Restructuring in LA

• 75,000 Manufacturing jobs lost (1970)
• Decreased government funding for anti-poverty and
  jobs programs in urban areas (1970)
• Decreased funding social services (1970-2000)
• Increased the perception and reality of
  competition among minority groups as low-wage
  earners
• Business owners in urban areas left due to
  increasing fear of riots and urban unrest

8
Economic Sociological Theories

• Living Arrangements of Latino Immigrants
• Job Searching Methods
• Ethnic Economy

9
Living Arrangements of Latino Immigrants

• Tendency for extended family to live together
• Cultural hypothesis Reflection of traditional
  family patterns brought from the home country
• Economic resource hypothesis Individuals with
  the fewest economic resources will be the most
  likely to live in extended arrangements
• Life-course hypothesis Living arrangements
  reflect the varying constraints and needs of
  life-course events and stages
• Predicted effect on the community
• Immigrants initially move into undesired areas
  with lower rents, such predominantly lower-income
  black communities
• Able to pay higher rents due to the multiple
  people contributing to it
• Overtime, this increases housing prices

10
Job Searching Methods

• Latino immigrants and their immigrant social
  network
• Tend to use friends, family, neighbors, and
  inside referrers to acquire jobs and develop
  highly localized and densely connected employment
  networks
• Reduce information costs in the job search
• More willing to accept any job they can get
  quickly due to lack of English, education, and
  papers
• Black residents
• More likely to rely on third-parties outside of
  the local neighborhood and immediate ethnic
  niches.
• More selective in their job searches and wont
  accept jobs with low-wages and bad working
  conditions because they are citizens, know their
  rights, and have access to welfare and
  unemployment benefits
• Predicted effect on the community
• Predominant jobs are increasingly characterized
  by lower wages and worse working conditions
• Higher employment rate

11
Ethnic Economy

• Primarily in the food service and retail trade
• Benefits
• Easier to get a job in ethnic stores
• Protect from discrimination
• Costs
• Not linked to social mobility
• Longer commute times with lower wages
• Relegate individuals to menial jobs and enforce a
  linguistic isolation that obstructs advancement
• Predicted effect on the community
• Higher rates of self-employment and of business
  ownership

12
Economic Change

• Population Change
• Types of Housing Units
• Medium Household Gross Rent
• Medium Household Income

• Poverty Rate
• Employment Rate
• Labor Force Participation Rate
• Unemployment
• Employment Residents by Industry

13
Population by Race/Ethnicity
14
Housing Units by Occupancy Status
15
Median Household Gross Rentin 1999 dollars
16
Median Household Income in 1999 Dollars
17
Poverty Rate
18
Employment Labor Force Participation Rate
19
Unemployment Rate
20
Employed Residents by Industry
21
Discussion

• Actual Results
• Little increase in available housing
• Rent increased by 100
• Poverty increased by 192 in Inglewood and 48 in
  Compton
• Employment decreased by 0.7 in Inglewood and
  increased by 12 in Compton
• Median household income decreased by 25 in
  Inglewood and by 17 in Compton
• Unknown given available data

• Predicted Results
• Large increase in available housing
• Increase in average rent
• Greater concentration in low-wage jobs
• Increase in employment rate
• Increase in self-employment rate and business
  ownership

22
Further Research

• Evidence on the topic is inconclusive
• Race-Specific data needs augmentation for this
  type of research
• Qualitative research is necessary, including site
  visits and interviews
• Though most immigration occurred between 1980 and
  1990, the time period, 1990-2000, witnessed
  severe economic fluctuations and warrants further
  study