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Vidal Hernandez, right, came to Los Angeles looking for a brighter economic future for his family. Decades later, Hernandez has scraped together enough money, with the help of a community loan resource and his family, to start his own business - a cheesesteak food truck. Pictured left: Celestino Hernandez, co-owner. - 

Tess Vigeland: Saturday marks 20 years since riots swept across South Los Angeles. When the burning, shooting and looting ended, a swath of low-income black and Hispanic neighborhoods lay in waste -- 53 people were killed, more than a thousand buildings destroyed. Hundreds of millions of dollars were pledged for rebuilding and community development. But at the time, it was hard to believe how residents would ever prosper again.

From our Wealth and Poverty Desk, Marketplace's Mitchell Hartman visits South L.A. to see whether 20 years later it's any easier for residents to move up the economic ladder.


Mitchell Hartman: Just off Crenshaw Boulevard in the heart of South L.A., there are still empty lots where burned-out buildings were never rebuilt. Fast food, liquor, and payday loans seem available on every corner, but there are precious few groceries, banks, or office buildings.

One bright spot -- the Baldwin Hills Crenshaw mall. It's been spruced up. There's a Macy's, a celebrity chef's upscale restaurant, and a Walmart. Where Daniel Coles has a job, right here in the predominantly African-American neighborhood where he grew up.

Daniel Coles: I feel that it's great for the community, because it gets more convenient for the community to come and shop. Also more convenient for me, where I can just take the bus to get to work.

Coles isn't too happy with his $13-an-hour pay. But he likes the stores that the mall has attracted nearby: Starbucks, a juice bar, H&R Block.

Paul Ong: Certainly what we see is some heroic efforts to establish businesses there.

Paul Ong is an economist at UCLA.

Ong: And you do see some success. That being said, if we look at the raw numbers, a better indicator than just some of these visual landmarks, there are only four jobs to every 10 workers. This is a job-scarce neighborhood. And the jobs that are there tend to be lower-wage jobs. They're not the type of jobs that would make it easy to move into the middle class.

Ong says for many residents, the way up the economic ladder is to climb out of the neighborhood altogether. And many of those who leave are African-American. Before the riots, South L.A. was about half-black and half-Latino. Now, blacks make up just a third of residents.

Robbie Hawkins: I think the first place was on 36th Place.

Robbie Hawkins is 59. She was born and raised -- and still works -- in South L.A.

Hawinks: And we moved from there around the corner to East 68th Street, where we were there for 40 years.

Then, in 2005, she sold the family home, where she was living with her mother and her son, who works as a retail manager.

Hawkins: So we moved to a nicer neighborhood.

In the suburban community of Harbor City. She commutes to South L.A. -- she's a loan portfolio manager for a community lender. So I asked her:

Hartman: As a resident, are there things you miss?

Hawkins: No, nothing. You want to be able to go to a supermarket that's an Albertson's, rather than the little mom-and-pop store. And you want to be able pay prices that are not higher. I mean, my car insurance is less expensive now, my cell phone. If I wanted to go to a Rite-Aid -- a nice one that had anything in it -- I had to drive out. Now I live right next to a Rite-Aid. There's a Starbucks.

For decades now, African-Americans who can afford to have been moving out to the suburbs for better housing and schools, says Paul Ong.

Ong: And that sucks a segment of the population out of that area. At the same time, those who are not as well off, cannot afford housing, they are attracted to this area.

That's the new Latino residents, now two-thirds of the population. And it turns out these two communities are pursuing very different roads to upward mobility, according to Eugene Grigsby. He's a sociologist and city planner. He says blacks try to build family wealth by working for big companies or the government -- as utility workers, say, or teachers. You buy a house, save for retirement. He says Latinos tend to start small businesses.

Eugene Grigsby: The immigrant approach to economic development: you start low, you work 14-15 hours, you don't pay yourself very much, but you accumulate some capital. Then you can purchase something, you can bring some family members over, get them involved, and you can accumulate more capital.

I met Vidal Hernandez at the same community lending agency where Robbie Hawkins works. He and two nephews came here from Mexico around the time of the riots. They worked as cooks and dishwashers, saving everything they could.

Vidal Hernandez: First, we would try to buy a local business. We didn't have enough capital. So we started renting a truck.

A lunch truck. They specialize in Philly cheesesteaks -- hot sauce optional. Their wives make Mexican deserts to sell as well.

Hernandez: Then we rented a second truck -- more work, but it's even better. Finally, we got our dream come true, like, we're buying our truck. So we are kind of like, step by step, that's what we did.

That last "step" is a big one -- even used, the truck is more than $100,000. But if their bet pays off, and one truck becomes half-a-dozen, in time, they'll probably move up and out of the neighborhood, too.

I'm Mitchell Hartman for Marketplace.


Vigeland: As with any rule, there are exceptions to this one. Tomorrow on the Marketplace Morning Report, you'll hear from a businesswoman who stuck it out in South L.A. Plus, explore an interactive map and see for yourself the racial demographic shift in South L.A. over the past 20 years.

Follow Mitchell Hartman at @entrepreneurguy