With economic unrest so prevalent around the world, the following excerpts from an article a friend sent me presents an interesting perspective on CA. . .
“California is the home to more super rich than anywhere else in the country – and it also exhibits the highest poverty rate in the nation, when cost of living is taken into account. Income disparities in the state of California are among the highest in the nation, outpacing such places as Georgia and Mississippi in terms of the Gini coefficient, a standard measure of inequality.
Some degree of income inequality is to be expected – people have different talents, skills and predilections, and markets will reward these in different ways. But there are serious consequences when things tip too far in one direction, as seems to be the case for California.
For most of the 20th Century, California had its share of rich and poor, but they were the outliers on either side of a broad middle class. The California Dream was the American Dream with a destination. While people no longer came to California to strike gold and stumble into riches, they did come to build a stable life for themselves and their families: a promising education, a good job, a home, a car. From around the country and around the world, migrants came seeking employment in our factories, and homes in our cities and suburbs. Stable, middle class jobs – and generally rising incomes – were the norm.
Beginning in the 1980s, the rich began to pull away from the rest. Between 1979 and 2012, California’s Top One Percent nearly doubled their incomes, increasing by 189.5 percent, while incomes for the other 99 percent actually fell by 6.3 percent.
The widening gap has many causes. As California, through Silicon Valley, led the world into the digital age, productivity rose to unprecedented levels. But virtually all of the economic benefits went to those at the top, partly because of the spectacular wealth created by the tech sector. In just the last 10 years, California tech companies added at least 23 billionaires to the list of richest Americans – Twitter alone boasted of creating 1,600 millionaires overnight when it went public 15 months ago. The state now has 111 billionaires; if we were a separate country, that would put us behind only the U.S. and China, and tie us with Russia.
Despite America’s reputation as a land of opportunity, intergenerational earnings elasticity (a measure of how likely you are to be stuck in the income group in which you were raised) is higher in the U.S. than in Canada, France, Germany and the Scandinavian countries, and just a bit better than in the United Kingdom or Italy.
And place matters in an even larger sense, with broad swaths of coastal California – including the Bay Area, part of Los Angeles and the Central Coast, and Orange County and San Diego – generally doing much better than those in inland California. This spatial separation by income also occurs in our daily lives: In 1970, for example, 65 percent of Americans lived in middle class neighborhoods, while only 15 percent lived in very rich or very poor neighborhoods. By 2009, only 42 percent lived in middle-class neighborhoods and 33 percent lived in neighborhoods at one of the extremes. California may indeed continue to be a land of opportunity–for the select few.”
