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Report: Hundreds Of Thousands In Orange County Are Struggling Financially

Report: Hundreds of thousands in Orange County are struggling financially

By Margot Roosevelt / OC Registers’s Staff Writer.

With balmy weather and low unemployment, Orange County may be a fine place for those with well-compensated jobs, paid-down mortgages or decent retirement income.

But before we boast about our quality of life, consider the grim statistics in the county’s annual Community Indicators Report, released last week.

• Nearly 1 in 4 residents lives in poverty.

• Nearly two-thirds of local jobs don’t pay enough for a worker to rent a one-bedroom apartment.

• Orange County’s cost of living is 85 percent above the national average, but its median income is only 42 percent higher than the nation’s median.

The stark reality is that hundreds of thousands among our 3.2 million residents struggle against immense odds.

“We are not talking about people that are just layabouts,” said Max Gardner, president and chief executive of Orange County United Way, one of nine charitable groups and government agencies that contributed to the 70-page data-rich report.

“These are the working poor. They can’t support themselves on the wages they are making in the county today. They are trying like heck, but there’s an opportunity gap.”

Gardner and other officials spoke last week at a gathering of 130 business, philanthropic and government leaders sponsored by the Orange County Forum, a nonpartisan educational organization.

Lucy Dunn, president and CEO of the Orange County Business Council, which represents many of the largest local corporations, highlighted several innovative initiatives mentioned in the report, including programs to improve Latino education and keep the homeless out of hospitals.

But she warned, “If we don’t take care of the continuum of our people from the youngest to the oldest, this is not a healthy economy. Orange County risks losing the greatness and uniqueness that is ours.”


A housing shortage, and the related high cost of buying or renting, is driving millennials (ages 18 to 34) out of the county. Of the nation’s 10 most expensive metropolitan areas for housing, Orange County ranked second for the greatest proportion of millennials leaving, after Silver Spring, Md., a suburb of Washington, D.C., according to the report.

Over the next 25 years, residents 65 and older are the only age group projected to grow proportionate to other groups, jumping to 24 percent of the population from 14 percent. The result: a county with fewer workers paying taxes to support services, schools and pensions.

At the forum, Steve PonTell, president and CEO of National CORE, a nonprofit housing developer, said he asks local growth opponents: “How many of your children can afford to live in the community they grew up in? And if you don’t want your children nearby, how about your grandchildren?”

On the overall economic front, payrolls are growing more rapidly in Orange County than statewide or nationally, pushing down the unemployment rate. Even so, the report noted, wages for lower-paid occupations remain stagnant.

One bright sign: Venture capital funding in Orange County grew 71 percent in 2015 from the year before, rising to $856 million and fueling a host of innovative startups. In comparison, national venture capital investment grew 21 percent.

In education, a positive trend is the decline in Orange County’s high school dropout rate to 5.7 percent last year from 9.5 percent four years earlier. Schools are reaching out more aggressively to students in danger of dropping out and are offering them alternative education programs.

An initiative called OC Pathways, funded by a grant from the California Department of Education, offers internships in local businesses to high schoolers. Over two years, it has spurred a 40 percent boost in students taking STEM courses, those focused on science, technology, engineering and math-related skills that could lead to higher-paying jobs.

Still, only half of county students complete the courses that allow admission to a California State University or University of California campus, the report noted.

“We need to raise the bar in middle school and high school,” Al Mijares, Orange County superintendent of schools, said in an interview. “In other countries, school is more rigorous.”


Educational data reveal an across-the-board failure of many school districts to prepare students in basic literacy and math skills.

Less than half of the county’s third-graders last year met new state standards in English language and literacy, and only 51 percent met math standards. The lag continued through 11th grade, with less than two-thirds meeting literacy standards and only 39 percent meeting math standards.

Two years ago, Mijares said, the state adopted new, more complex testing methods, requiring students to use computers. And schools suffered through years of budget cuts during the recession and its aftermath, raising class sizes.

The report also focused on the deficits facing children before they start school: Cognitive development and emotional maturity tests show that less than half of the county’s 6-year-olds were prepared to enter kindergarten.

“A huge game-changer would be if the state could fund universal preschool education,” Mijares said. “Research shows that the brain is ready to learn at an early age. We have to intervene sooner.”

The education gap between poor cities and wealthy or middle-income cities is vast. Only 18 percent of third-grade students in Santa Ana and Anaheim met literacy standards, for example, vs. more than 70 percent in Laguna Beach, Los Alamitos and Irvine.

Some wealthier schools have foundations that “raise hundreds of thousands of dollars,” Mijares noted. In low-income districts, “students go home to an environment where they have no laptop and no internet access. They have a higher hill to climb.”

For financially unstable families, the report noted, “helping their children succeed in school is a challenge. Adults may be working multiple jobs and unavailable.”


High housing costs coupled with low wages are a key factor. According to the report, it takes an hourly wage of $25.46 to afford a median-priced one-bedroom apartment, up from $24.67 last year.

Skyrocketing rents explain why more than 23,000 students live doubled-up and tripled-up with other families, up from fewer than 10,000 a decade ago, the data show.

Poverty is taking a toll on health, with families struggling to provide a nutritious diet, along with access to safe parks and sports programs for their children. One-third of the county’s children are overweight or obese, with the rate climbing to more than half in some areas. Adults are suffering from rising rates of obesity-related chronic diseases, diabetes and heart disease.

Meanwhile, wages in the county’s four largest job clusters – tourism, business and professional, health services and construction – have been flat since 2006.

“O.C. cities promote themselves as tourism hubs,” Cesar Covarrubias, executive director of the Irvine-based Kennedy Commission, a housing advocacy group, said in an interview. “That means low-wage retail jobs. But they are not providing homes for these workers.”

The commission is suing Huntington Beach and Costa Mesa for promoting luxury apartment complexes while failing to comply with state law requiring the developments to include a portion of affordable housing.

Other cities, including Irvine, Brea and Santa Ana, Covarrubias said, have enacted ordinances to ensure affordable housing is built.

Orange County’s housing shortage doesn’t just create hardships for low- and middle-income workers, it also worsens the region’s severe traffic congestion. John Bellavia, a construction worker who was pumping concrete at a luxury development in Yorba Linda last week, makes $30 an hour. He commutes to work from Victorville, 60 miles away.

“It takes me three hours to get home,” he said.


New laws have improved the lives of many Orange County residents. For instance, the report noted, the proportion of residents without medical insurance dropped between 2013 and 2014, from 17 percent to 12 percent, as President Barack Obama’s Affordable Care Act took effect.

California boosted the minimum wage to $10 an hour from $8 over the past two years. Still, a minimum-wage worker would have to toil 102 hours a week, down from 126 hours two years ago, to afford a median priced one-bedroom apartment in Orange County, the report noted.

In considering the report’s trove of data, business and community leaders emphasized that all the issues – demographics, housing, wages, education and health – are intertwined. And they affect not just the poor, but the county’s middle class and wealthy too.

“If our children are not well educated, they won’t be able to fill the high-paying jobs that are here,” Dunn said, adding that business leaders are pushing for more housing by “meeting with cities who aren’t doing the right thing. We are learning to exercise our muscles a little more.”

Gardner underlined that the issues are not “isolated items.”

“You can’t get an education if you don’t have a stable place to live. If you don’t have a stable income, you are not going to have a stable place to live. We have to be thinking big picture.”

Contact the writer: mroosevelt@ocregister.com; Twitter @MargotRoosevelt

Click here to see original article on OC Register’s website.

Download the 2016 Orange County Community Indicator’s report.

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