Los Angeles Daily News
Kevin Modesti
4/26/09
This could shatter Los Angeles' self-image as one of the world's sunny, happy, carefree capitals of the good life.
Forbes, the business magazine famous for publishing lists - from attention-grabbing ("Most Powerful Celebrities") to arcane ("48 Asian Altruists") - came out this month with a roster of U.S. cities where it's "Hardest to Get By" financially.
No. 1 is Providence, R.I. No. 3 is Riverside. The top 10 includes Buffalo, Detroit and Louisville.
And right there among those unglamorous places, No. 2 on this list of the American economy's most miserable municipalities, is Los Angeles.
When was the last time you saw Los Angeles, the Entertainment Capital of the World, and Providence, formerly nicknamed the Beehive of Industry, side by side in any context?
The worse news is that Los Angeles' poor placement on the Forbes list seems to come as no shock to people who live here.
"I'm not terribly surprised," said Shelley Baker, a West Hills resident since 1970. "L.A. is a wonderful place to live, but I see the desperation, the people on the streets ... people having to cut back. It's harder and harder and harder."
Forbes says the rankings were determined mathematically by measuring the cost of living, median household income and February unemployment rate for each of the nation's 50 largest metropolitan areas.
Los Angeles - actually, the L.A.-Long Beach-Santa Ana metro area - had a cost-of-living index that's 48 percent above the national average, a median household income ($56,680) that's slightly better than average, and an unemployment rate (10.2 percent) that's worse than the nation as a whole.
While even worse unemployment hurt people in Providence and Riverside, and low incomes afflict No. 4 Tampa and No. 5 Buffalo, it's the whopping cost of living here that accounts for Los Angeles' position on the dishonor roll.
Mostly, what accounts for our high cost of living is the high cost of keeping roofs over our heads. L.A. housing prices are 2 1/2 times the national average - though still less than two-thirds the prices in Manhattan.
Does Los Angeles' No. 2 ranking in this bottom 10 accurately state how hard it is for people here to make ends meet?
"I know we live in an expensive place," Mark Young, a children's animation producer from Woodland Hills, said one cloudy morning this past week outside the Woodland Hills post office. "And like everyone, I'm concerned that instead of leveling off, it's climbing (getting worse). I can't find solace in any direction anymore."
Local economists say they take some solace in knowing the Forbes finding is merely a statistical snapshot.
Because it's based entirely on numbers, the ranking doesn't give Southern California credit for its noneconomic good points, beginning with the weather.
"If you're looking for the cheapest place to live, this isn't it," said Elan Shore of the Los Angeles County Economic Development Corp. and the San Fernando Valley Economic Alliance. "But there's a reason people still want to live here ... still see this as a place of opportunity."
And because it reflects only a moment in time, the ranking doesn't tell if things here are getting worse or better.
As high as L.A. County's median house price is, it actually has fallen 34 percent since March 2008 - faster than the national average has fallen - according to California State University, Northridge, Professor Daniel R. Blake, director of the San Fernando Valley Economic Research Center.
If house prices continue to slide, so could Los Angeles' ranking on Forbes' bad-news list. On both counts, we have a lot of room to improve.
"I do think rents will stabilize or drop off, becoming a little cheaper next year. I don't see the lower-end housing, the cost of buying a home, dropping that much more," Blake said.
But, Blake said, if Forbes were to conduct the same study in 2010, "I think L.A. will be more affordable, relative to income. I think a year from now, unemployment will be down. I think L.A. would not be No. 2 on the list - but I would still expect it be in the top half."
Shore cited a competing study, by the Financial Times' Foreign Direct Investment Magazine, that recently ranked Los Angeles No. 7 among North American "cities of the future" for business.
By contrast, Shore said, "The Forbes study is based on looking backward."
That's no consolation to those who are looking at Los Angeles in the rearview mirror.
Doing interviews in front of the Woodland Hills post office on Friday, one was struck by the beleaguered looks of the people scurrying in and out. They were looks you'd expect in a Bronx subway, not on a leafy side street in a nice Valley neighborhood.
A reporter approached 10 people, asking if they could spare a minute. Five walked past, saying they were in a hurry. One listened to the reporter describe the Forbes conclusion, then said he'd lost his voice and would rather not be interviewed. One listened and said only, "It doesn't surprise me at all."
One, a 35-year-old Woodland Hills resident who declined to give his name, said the Forbes study was "interesting, because I just lost my job."
"I'm from Wisconsin, and I'm moving back to Madison," he said. "I would attempt to stay, but I know my funds would run out fast. I'd have to find (a job) pretty fast, and in this economy, that would be hard."
Good news for him: Madison, Wis., doesn't make the top 20 on Forbes' list of the places where it's Hardest to Get By.
Meanwhile, at this cash-strapped moment in time, Los Angeles is No. 2 in the nation, in a world of economic hurt.
We can't even have the satisfaction of saying we're No. 1.
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