Gov. Gavin Newsom’s website is topped by his official slogan, “California for All.”
“The California Dream — the idea that every person can achieve a better life, regardless of where they start out — is central to who we are as Californians,” it declares. “Even in a time of economic growth and record employment, too many Californians are experiencing the squeeze of stagnant wages and the rising price of building-block necessities such as housing, health care, education, and child care. We can and must reanimate the California Dream, building a California for All.”
In polling, most Californians endorse that noble vision, but the reality is daunting. Last week, Newsom referred to California as “the richest and poorest state,” and the gap is widening.
We have, for instance, the nation’s highest rate of poverty, as defined by a Census Bureau formula that includes the cost of living, with 18.1% or more than 7 million Californians impoverished.
That doubles to 14 million, the Public Policy Institute of California says, if Californians in “near-poverty” are added — a number virtually identical to enrollment in Medi-Cal, our program of medical care for the poor.
At the extreme edge of the underclass, there are, according to the most recent official counts, 151,278 homeless Californians, a nearly 17 percent growth in one year. But the official count is probably far short of reality, which may be two or three times as high.
The Yawning Income Gap
By sheer coincidence, incidentally, our official homeless number is almost identical to the number of California households in the top 1% of income. The one-percenters, who pay nearly half of the state’s income taxes, average $1.7 million in annual income.
A new PPIC report frames the yawning income gap.
“While California’s economy outperforms the nation’s,” it says, “its level of income inequality exceeds that of all but five states. Families at the top of the income distribution in California have 12.3 times the income of families at the bottom ($262,000 versus $21,000, for the 90th and 10th percentiles, respectively, in 2018), measured before taxes and safety net programs.”
The gap, if anything, is widening.
“Since 1980, incomes for families in the 90th percentile have increased by 60%, while incomes at the 50th percentile (median) and 10th percentile have grown much less (24% and 20% higher in 2018 than 1980),” PPIC says.
The trends reflect fundamental changes in our economy — a decline in blue-collar jobs, especially in manufacturing, and strong growth in technology and other industries demanding higher educational credentials.
The Income Gap Mirrors What Educators Call the ‘Achievement Gap’
“For families where any member holds a four-year degree or higher, median income increased by 30% since 1980,” PPIC continues. “It decreased slightly for all other families. Families with four-year degree holders earn $2.20 for every $1 that families without degree holders earn.”
There is a strong geographic component to the income gap, with the widest disparity found in the technology-heavy Bay Area, and a wide ethnic factor with Latino and black Californians overrepresented in the lowest income cohort.
The income gap, moreover, mirrors what educators call the “achievement gap” among the state’s nearly 6 million K-12 students, with poor and English-learner students — Latino and black children, particularly — perpetually falling behind more affluent white and Asian kids.
In the main, Newsom and other political leaders, Democrats all, have addressed these gaps by throwing taxpayers’ money at them but those efforts are puny stopgaps at best.
In the longer run, making California more attractive to job-creating investment, improving educational outcomes and lowering barriers to housing construction are the only approaches that might truly close the gaps.
CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary.