The Long Beach Model
Bucking California trends, the port city remains devoted to a middle-class economy.
An hour from Hollywood, far from Malibu and other elite coastal havens but only 23 miles from downtown Los Angeles, Long Beach remains what much of Southern California once was: a gritty, blue-collar trade and manufacturing community. One of the area’s last remaining middle-class coastal towns, it stands on a spit of land extending over eight miles along the southern end of L.A. County, wedged between tough towns to the north—notably, Compton, as in “Straight Outta”—and to the south, comfortable, Mayberryish Seal Beach. Long Beach is hardly a 1950s middle-class paradise, but, in sharp contrast with Los Angeles or San Francisco, the state’s seventh-largest city remains unpretentious and vital. It feels like a small town, even with 480,000 people living in some 84 distinct neighborhoods.
The population may be far more diverse than it once was—more than one in four residents is now foreign-born—but most of the city resembles the place settled early last century, largely by midwestern migrants. Comprising mainly single-family homes and small apartment buildings, Long Beach remains suburban in form and feel, with only 8 percent of commuters using mass transit and 75 percent driving to their jobs alone. Most work in the city or in surrounding parts of Los Angeles County.
Long Beach’s location guarantees a mild climate, of course, but at a small fraction of the cost of Newport Beach or the cities of L.A. County’s South Bay. Average rents run roughly $2,000 per month, compared with, for example, $3,700 in Santa Monica. Long Beach has proportionally more middle-income earners, and fewer rich residents, than the state on average. In some of the city’s neighborhoods, per-capita income runs as low as $11,000 annually; in a few others, it exceeds $100,000. Unlike most Southern California beach towns, Long Beach, for the most part, is not home to many of the super-wealthy: only 3 percent of residents earn over $250,000, and barely 1 percent make over $500,000. More than 40 percent of the workforce earn between $50,000 and $150,000.
The key to Long Beach’s relative success—measured by fairly low crime rates, a far smaller rise in homelessness than in neighboring Los Angeles, and a spate of industrial expansions—lies in its embrace of a working- and middle-class identity. This identity shapes how Long Beach governs itself and the priorities it sets, which include retaining and growing high-paying blue-collar work. The Long Beach model is not about glitz or virtue signaling; it’s about grit, growth, and paving a path to upward mobility.
“Our opportunities for growth are in trade, aerospace, and defense,” explains John Keisler, the city’s dynamic director of economic development. Keisler, a Long Beach native, has been at the forefront of many projects, such as the thriving Douglas Industrial Park near the airport and the extensive skills-training programs conducted with the cooperation of local businesses and schools. “We see our role in economic development as playing on our existing strengths,” he explains in his office, which overlooks the cranes of downtown. “The talent is there; we just have to find new places for them to work and keep the ones we have. What we need is to build on the entrepreneurial ecosystem that’s already here. We are building our future on what we already are.”
This is a place where people often know one another, with a local orientation. It’s a city of neighborhoods, some affluent, others not; but overall, in city hall and elsewhere, Long Beach retains a sense of neighborliness rare in the increasing anonymity of Southern California. And it is a place where the connection with the blue-collar economy—through its port, its aerospace industry, and other manufacturing—remains strong.
In the early twentieth century, Long Beach served largely as a hub for retiring middle-class and working-class midwestern retirees, earning it the moniker “Iowa by the Sea.” Lacking the glamour of Hollywood and Beverly Hills, the city afforded retirees a Mediterranean climate and a congenial, conservative culture. With one-third of its residents over 60—and required, by law, to remain modest in attire, even on the seashore—Long Beach had a population very different in character from starstruck Angelenos. “They were in truth,” noted writer Hamlin Garland, “incredibly unaesthetic and yet they were worthy, fine serious folk who do not believe in drinking, smoking, or philandering.”
With the onset of the Great Depression, many Long Beach residents saw their savings dwindle or disappear, and they rallied to the plan of a local physician, Francis Everett Townsend, calling for a massive federal pension for senior citizens. Anticipating Social Security and, to a certain extent, spurring its adoption, the Townsend Plan swept the nation, attracting millions to join Townsend Plan Clubs. Yet, like Upton Sinclair’s contemporaneous, and somewhat similar, End Poverty in California movement, the Townsend movement never fully took hold. Townsendites were denounced even by liberal journalists, such as the New Republic’s Bruce Bliven, as “economic illiterates” looking for a conservative populist alternative to socialism and Communism. Northeastern observers regarded the “folks” the way many view today’s “deplorables”—as ill-informed, reactionary, and hopelessly ignorant.
As in much of the country, and particularly in Southern California, the onset of World War II transformed Long Beach. A thriving oil industry provided jobs and income, while the city turned to the seaside not just for recreation but for its port. As the United States prepared to battle Japan for control of the Pacific, Long Beach’s small naval base expanded dramatically, becoming the city’s largest employer. By war’s end, more than 16,000 people worked there; before it closed in 1997, it still employed 7,500.
Even more important was the rise of the aircraft industry, which churned out more than 100 C-47 cargo planes, A-20 attack bombers, and B-17 bombers each week, at its height, in facilities in Long Beach and in other Southern California locations. At peak production during the war, the region’s aircraft manufacturers, with Douglas Aircraft leading the way, employed 2 million workers and eventually produced 300,000 planes. Then, after a brief lull, the Cold War reenergized Southern California’s aircraft industry. By 1948, Southern California—soon to be the nation’s richest repository of engineering talent—gained a remarkable 55 percent of Pentagon plane contracts. Defense spending accounted for more than half of California’s economic growth between 1947 and 1957. Many of these workers settled in Long Beach and neighboring Lakewood, a 1950s suburban tract development of more than 60,000 homes, built with mass-production efficiency.
Long Beach, like much of Southern California, suffered from the end of the Cold War, with the decline in defense spending causing aerospace employment to drop precipitously. The job loss was accelerated by California’s hostile business climate and a political class less than effective in lobbying for contracts. All manufacturing businesses felt the impact of these forces.
As core industries shrank, the city’s demographics, like those across Southern California, were changing rapidly. Once a primarily white city, Long Beach over the past three decades has become increasingly diverse, with a large population of African-Americans and Latinos, as well as a growing Asian community. The city is now barely one-fourth non-Hispanic white, slightly poorer and with a lower homeownership rate than the county as a whole. Immigrants make up roughly half the manufacturing workforce. The greater diversity has had some downsides—including increased social problems, especially a spike in gang activity—but also many beneficial effects. The city’s Cambodia Town, for example, has become renowned for ethnic cuisine, and entrepreneurial activity has flourished there, particularly in the doughnut business. Long Beach’s 8,400 or so immigrant entrepreneurs generated $162.1 million in business income in 2016.
The city has worked hard to promote these newcomers’ companies, including facilitating the recent purchase of 30 parcels between 56th and 60th Streets on Atlantic Avenue by LAB Holding, a Southern California developer that prioritizes local businesses over box chains—as in its LAB “Anti-Mall,” first developed in neighboring Orange County, which features many small, ethnic-oriented businesses.
Like other coastal California communities, Long Beach has tried to leverage its enviable weather, its expansive beachfront, and its legacy architecture. During the dynamic mayoral tenure of Beverly O’Neill (1994–2006), the city constructed major new tourist facilities, including a new convention center, and began the gradual facelift of its old downtown. A 2016 report by Beacon Economics found that jobs in downtown Long Beach grew 6.5 percent from the first quarter of 2008 through the third quarter of 2015, surpassing the citywide growth rate of 3.9 percent and L.A. County’s rate of 2.2 percent. This tourism-centered economy shows no sign of slackening.
As in many cities, such efforts draw criticism from some community activists, who fear that the improvements will bring gentrification and drive poorer people, mostly minorities, out of town. “It’s not that we’re Blade Runner yet,” says longtime housing activist and former executive director of Housing Long Beach, Josh Butler, over lunch in a ramshackle Cambodian diner. “There’s all this development downtown, but it’s not helping much of the population. We may look good, but we’re also bordering Compton—not just the ocean.” Rents shot up 55 percent between 2011 and 2017, true; but Butler’s contention that growth is helping only the few is somewhat belied by the numbers.
Indeed, what most distinguishes Long Beach from many Southern California towns, and many communities nationwide, is that it remains committed to its blue-collar economy. More than 50,000 jobs in the city—one out of every five, and up from 30,000 in 2014—are port-related. Automation and the shift to a “zero emissions” facility may reduce some less skilled positions but should also provide more opportunities for higher-paid work. “We want to attract, retain, and expand good jobs in every sector,” says Mayor Robert Garcia. “Long Beach has historically been a blue-collar town, with the port and manufacturing jobs providing many solid middle-class job opportunities. The reality is, most people are not going to be in management, whether it’s here or anywhere else. Most people are going to be in the blue-collar sector, and we need to make sure those jobs provide a good wage and benefits so that families can afford to continue living in Long Beach.”
Los Angeles’s port is located far from its downtown; Long Beach’s is front and center. “Long Beach historically has always recognized the importance of its port,” says Noel Hacegaba, the port’s deputy executive director. “As we have gone from a Navy town to a trading one, the community has always supported us. In L.A., there’s a lot of distance from City Hall to the port. Here, it’s a big part of our identity.” Hacegaba acknowledges, though, that the port struggles with California’s notorious, and often capricious, regulatory regime. The combined L.A.–Long Beach ports have long been the nation’s leaders, but they’re not growing as quickly as more aggressive ports, particularly in Texas and the Southeast.
Unlike Los Angeles, where Mayor Eric Garcetti is more focused on creating the nation’s “greenest city” than on saving blue-collar jobs, Long Beach has sought to encourage and, where possible, expand the city’s manufacturing economy, working closely with employers to help them navigate state regulations and being generally responsive to their concerns. Blue-collar professions are particularly critical to Latinos, now 45 percent of the city population. Close to half of Long Beach’s Latino population works in construction, trade, and manufacturing, compared with 13 percent of the rest of the workforce. Manufacturing, energy, and warehouse jobs pay $10,000 to $30,000 more annually than hospitality and retail work.
After suffering decades of losses, the city’s industrial employment has risen since 2013. Even after Toyota pulled its U.S. headquarters out of nearby Torrance, moving to the Dallas suburbs, the company kept its specialty manufacturing facility—shipping parts to Mexico and San Antonio—in Long Beach’s hardscrabble Eastside. The plant’s 240 workers speak 29 languages and come from 40 countries. They make an average of $28 an hour, far above what they could in the tertiary sectors.
Toyota general manager Jim Zehmer sees Long Beach’s relatively skilled workforce—a product of the city’s history and training programs—and job-friendly government as reasons to stay in place. The company partners with Long Beach City College, which provides internships for maintenance and other manufacturing skills. “The city works hand in glove with us as we try to deal with state mandates,” he notes over coffee in his four-decade-old facility. “The state’s not so great, but at least the city seems on our side.”
Toyota represents the defensive side of the Long Beach model, but ultimately the future will depend on new businesses. One example is HydraFacial, which makes a machine for skin care and employs 470 workers at its Long Beach facility. “This is actually a great place to manufacture—we have a lot of skilled employees who don’t want to leave,” explains company executive Jeff Nardoci. “California is a great market for our product.”
Like Zehmer, Nardoci praises local officials for their cooperation. High state taxes and regulations remain problems, but Long Beach itself does not add to the burden. Hiring from elsewhere is tough, given the costs of living in California, but there’s only so much the city can do about that. “At least there’s a vision here, a sense of revitalization that also includes industry,” he says.
Located near the airport, the Douglas Park development—which houses the likes of Mercedes-Benz USA, United Pacific, and Virgin Orbit, along with the trendy Long Beach Exchange shopping center—demonstrates what sensible city policy can do. Some of this space is a holdover from the aerospace heyday, but there’s new construction, too, including four industrial buildings. It’s a promising signal of a California city that can still help provide a broad base of opportunities.
Even as the traditional aircraft industry continues to struggle—Boeing, with 1,300 employees, remains by far the city’s largest industrial employer—there’s a new rush to outer space, which city officials see as a big opportunity to cash in on its historic legacy and skilled workforce. “Aerospace created this community,” notes Forouzan Golshani, dean of Cal State Long Beach’s College of Engineering. “The footprint is everywhere. It’s both what California was and what it could be.”
After a long decline, Southern California’s aerospace employment—with barely 90,000 workers in Southern California, it’s one-third the size of its 1980s height—is growing again, albeit slowly. Much of this, notes Golshani, reflects a shift from aircraft to drones, telecommunications satellites, and spacecraft. Boosted by a tenfold investment surge since the early 2000s, global space-industry revenues have increased from $175 billion in 2005 to almost $385 billion in 2017—a growth rate of nearly 7 percent per year—and are projected to grow to between $1.5 trillion and $2.7 trillion by 2040. As the headquarters of critical players such as Virgin Orbit and SpaceX (located in Hawthorne, near Long Beach), California has a 21 percent share of the aerospace industry nationally and 9 percent globally; including multiplier effects, the state accounts for about 510,000 aerospace jobs.
The future is already happening at Virgin Orbit, which provides launch technology for small satellites. The company opened in 2015 and now employs 550. When Virgin Orbit conducted its job fair before opening, more than 1,000 people applied, many formerly employed at Douglas Aircraft, Boeing, or one of a host of aerospace contractors. The company sees Long Beach as a promising recruiting base. “Long Beach has an incredible history in aerospace, and the area around Long Beach has a tremendous history around aerospace and space in general,” Virgin Orbit vice president for special projects William Pomerantz suggests. “The talent pool is like none other in the world. If you’re going to develop a new system, you really want to attract people who have some familiarity with it and expertise.”
As aerospace revived over the past decade, it’s worth noting, California’s modest job growth in the field has been outpaced by states such as Florida, Oklahoma, and South Carolina, which have picked up far more positions, per capita. And many firms formerly located here—Northrup, Lockheed, Douglas—have either moved out of state or been absorbed. Over the past decade, California has seen the largest loss of aerospace companies of any state, notes Chapman University analyst Marshall Toplansky. Long Beach is helping to resist the trend.
In Sacramento, California’s educational establishment seems determined to weaken academic standards and shift from teaching fundamental skills to inculcating progressive ideology, but Long Beach’s public officials understand that, to keep a competitive edge, they need to supply industrial employers with skilled workers. This is all the more crucial as the aerospace workforce is aging—as much as 50 percent of Boeing’s workforce will be eligible for retirement in five years. Long Beach’s educational institutions have developed programs that include training “rocket scientists” and design engineers as well as teaching technical skills at the high school and junior college level—critical to Golshani’s notion of building a “new ecosystem” for growth. The Long Beach educational partnership seeks to combine efforts across the local longitudinal (pre-K through graduate school) educational stream—encompassing Long Beach Unified School District, Long Beach City College, and Cal State Long Beach.
Business leaders are impressed by community college offerings that include cybersecurity programming, advanced manufacturing, and global logistics and supply-chain management through the Maritime Center of Excellence, a port-sponsored initiative based at Long Beach City College. For emerging industries like space, notes Virgin Orbit’s Pomerantz, the biggest need is not tax breaks but assuring a supply of talent.
While Long Beach has the right idea to preserve a middle class in Southern California, it could face an uphill struggle without some relief from the state’s single-minded and aggressive regulators. California’s draconian climate-change policies, which drive up the cost and degrade the reliability of power supplies, could stifle the future of space-related manufacturing in the state. Such policies also work against affordable family-friendly housing, which becomes far more expensive to build. Other policies, like new laws on contract labor, could disrupt the flexibility of firms that seek to use part-time workers or short-term contracts.
Keisler is undaunted but recognizes the challenge. “We have survived all the changes from shipbuilding to passenger aircraft, but we are determined to make the transition to a new economy that increases opportunity,” he says. “We have three to five years to make it real.” With more reasonable state policies, the upside could be great. The emergence of a large-scale space industry, as well as a thriving port and a revamped industrial sector, would signal that, in at least one place, an increasingly feudal California isn’t bent on destroying its middle-class economy. The question now is whether the state still has room for such an approach.
Top Photo: Long Beach’s busy port has always been incorporated into the life of the city. (BILL COBB/SUPERSTOCK/BRIDGEMAN IMAGES)
City Journal is a publication of the Manhattan Institute for Policy Research (MI), a leading free-market think tank. Are you interested in supporting the magazine? As a 501(c)(3) nonprofit, donations in support of MI and City Journal are fully tax-deductible as provided by law (EIN #13-2912529).