State Regulators Destroy Los Angeles’s Fellowship With the Ringmakers, by Syd Gernstein

Local jewelers and city government officials in Los Angeles, California came together to create a shining example of how public-private cooperation can fix a potential environmental health problem without harming economic health. The intervention of state environmental regulators, however, tarnished this arrangement and put the jewelers, property owners and workers at risk of losing their jobs and investments and is depriving the city of needed revenue.

The Los Angeles jewelry industry is very ethnic. The people who work in it come from diverse locations, including Mexico, Armenia, Iran, Russia, China, Vietnam and Cambodia – and many can’t speak English. Many came to the United States to escape oppressive governments. They believed that, living in America, hard work would be rewarded.

The actions of the California Environmental Protection Agency (CA/EPA) prove this notion is not always correct.

The fact that environmental regulations are putting minorities and immigrants at economic risk is an example of how existing policies to promote “environmental justice” need further consideration if they are going to actually be effective and fair.

In July of 2001, the presence of hazardous air pollution in the Los Angeles jewelry district prompted the CA/EPA to halt jewelry manufacturing in the Park Central Building, a major downtown building. Officials believed the health risks of air pollution generated by jewelers and imposed on workers justified their dramatic actions. However, a less dramatic plan to combat the problem was already underway.

For nearly two years before last July, in rare cooperative form, political and business leaders embarked on a mission to benefit everyone. The jewelers and city officials met regularly to plan and implement an economically responsible environmental clean-up plan.1 This effort was not just for the cameras. Los Angeles Assemblyman Gil Cedillo remarked that the negotiations were “a sincere intent from industry to come into compliance.”2

For once, it seemed that a marriage of business and government interests for a clean environment and prosperous economy has been created. But then the CA/EPA entered the scene with divorce papers.

Last July, without warning,3 state regulators ordered the closure of one of the city’s largest jewelry manufacturing centers. More closures were promised.4 In one stroke, years of cooperative and beneficial work between city and business leaders had been wiped out.

This oppressive closure order could prove as devastating as it was sudden. The closed jewelry firms most likely will go out of business.

The potential economic and social impacts of closing of these businesses cannot easily be overstated. The Central City Association estimates the city’s jewelry industry directly influences 15,000 jobs and indirectly influences another 45,000.5 In the past, jewelers generated over $11 million in tax revenue each year6 – and over $300 million in the past 20 years.7 Jewelrymakers are tenants in nearly 50 percent of all downtown Los Angeles office buildings.8

State regulators barged into a situation that was resolving itself and created a situation that could be detrimental to the entire city. The state regulators acted legally, and their intentions may have been benevolent. The state is right not to ignore potential environmental hazards.

Regulators should learn, however, that environmental protection does not have to be a zero-sum game. When city and business leaders worked together, they found ways to protect the environment without ravaging the economy. When state officials tried to solve the problem without warning or cooperation, they put thousands of jobs and millions of dollars of tax revenue at risk.

Ironically, state regulators claim their efforts are for the benefit of low-wage workers. How does taking away their jobs help them? The scores of unemployed can tell their children that it’s for their benefit that they can no longer save for college, family vacations, or worse, afford three balanced meals a day.


Syd Gerntein is a research associate of The National Center for Public Policy Research, a Washington, D.C. think tank. 

1 Jill Leovy, “Jewelers, City Question State Action,” Los Angeles Times, August 3, 2001.
2 Ibid.
3 Ibid.
4 “State Orders Downtown Buildings to Shut Down Jewelry Operations,” Associated Press, July 28, 2001.
5 “Life and Times,” KCET-TV, Los Angeles, California, August 15, 2001.
6 Peter Y. Hong and Lee Romney, “Citing Health Hazards, State Halts Jewelry Making in an L.A. Building,” Los Angeles Times, July 28, 2001.
7 “Life and Times.”
8 “CBS 2 News,” KCBS-TV, Los Angeles, July 30, 2001.

The National Center for Public Policy Research is a communications and research foundation supportive of a strong national defense and dedicated to providing free market solutions to today’s public policy problems. We believe that the principles of a free market, individual liberty and personal responsibility provide the greatest hope for meeting the challenges facing America in the 21st century.