Homelessness and Economic Restructuring

The rise in homelessness in U.S. cities is partially an outcome of change in industrial composition and labor requirements which have reduced the income-earning abilities of workers at the lowest skill levels of the labor market. In downtown Los Angeles, absolute job loss in some manufacturing industries, decline in the relative share of low-skill jobs, and the decline in real wages among the low-skilled all contributed to the worsening situation of downtown low-skill workers. These were combined with (a) demand for local housing from the growing high-skill/high-wage workforce downtown, (b) pressure from industrial and commercial activities on sites of low-cost housing in and around downtown, (c) housing demolition to meet seismic standards, and (d) massive inflows of poor immigrants from Asia and Central America to the inner city. The outcome was increased competition for housing, leading to rising rentals, overcrowding, illegal construction of substandard backyard shelters, displacement of fixed-income households from their homes, and growth in the number of working poor on the streets.