Around this same time, the Southern California economy was cratering. The working-class exurbs of Los Angeles had been the epicenter of America’s housing bubble, and they quickly became the epicenter of America’s housing bust. (That’s the main reason the city of San Bernardino recently declared bankruptcy; it ranks among the top five U.S. cities in foreclosures.)
California’s construction industry imploded: Statewide, the number of construction jobs declined by a mind-boggling 43 percent from 2006 through 2010. Employment within the building-trade unions of Los Angeles and neighboring Orange County, whose members work primarily on commercial and infrastructure projects, shrunk by half, according to Robbie Hunter, who heads the Building Trades Council of those two counties.
The overall unemployment rate in California skyrocketed, and it continues to have the second-highest jobless rate of all the states. As California is the most populous state by far, its construction bust significantly retards the nation’s recovery.
So Villaraigosa, in conjunction with the city’s transit activists, got an idea. The rail construction funded by Measure R would take 30 years. Since the half-cent sales-tax revenue from a county of 10 million people was about as assured a stream of revenue as anyone could devise, why not borrow against that stream and accelerate the construction to just 10 years? Building all the rail lines in one decade, Hunter estimates, would create close to 400,000 construction jobs, and the multiplier effect of those jobs would create, well, a whole lot of employment in a mega-city and mega-state that desperately need it.
Villaraigosa traveled to Washington — repeatedly — searching not for grants but for loans that the sales tax would repay. Problem was, the federal government — having no infrastructure bank — didn’t do loans.
Undeterred, Villaraigosa assembled a nationwide coalition (called America Fast Forward) of state and local officials urging the creation of such a loan program through federally guaranteed bonds. He also persuaded both Democratic and Republican members of Congress that, with interest rates at an all-time low, this was an idea whose time had come. The bipartisan transportation bill that Congress passed and President Obama signed last month included funding for just such a program.
Sufficient funds have already been raised by the sales tax to commence work on a number of lines; indeed, some are up and running. But the federal loans will speed construction of the broader system.
The project is groundbreaking in more ways than one. As part of its agreement with the county’s transit agency, Hunter’s Building Trades Council has set aside half of its apprenticeships on the project for veterans of the Iraq and Afghan wars and residents of low-income Zip codes. Since the ’80s, any transit project getting federal funding — whether grants or, now, loans — has had to comply with federal rules forbidding local-hiring preferences. The effect has been to exclude many inner-city residents from construction jobs — to the dismay of the multitude of mayors who’ve sought to boost local hiring.
This set-aside is not locally based — the low-income Zip codes can be anywhere in the United States — although it likely will increase employment in some of Los Angeles’ most beleaguered communities. As a result, the city’s labor and transit activists who crafted the set-aside — chiefly, the Los Angeles Alliance for a New Economy, the nation’s most creative low-income advocacy organization — enabled the Federal Transit Administration to authorize funding for the project. In a nation wracked by joblessness and poverty, this kind of set-aside — much like the vast construction project in which it is situated — is exactly what America needs.