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Less Than Half of Californians are Middle Class

The middle class has shrunk to include less than half of all Californians, according to a new report from the Public Policy Institute of California (PPIC).

In 1980, 60 percent of Californian families were considered middle-income, a figure that had shrunk to 47.9 percent by 2010. After adjusting for the cost of living, the definition of “middle-income” was determined to include families earning between $44,00 and $155,000.

Incomes, the report reveals, have fallen across the spectrum. During the official recession of 2007-2009, median income in the state fell by five percent, but the figure dropped another five percent in 2010, even though the nation was officially in recovery.

Things are much worse for the poorest Californians, however. Households in the bottom ten percent of earners lost 21 percent of their income from 2007-2010. While Californians in the top ten percent earn more than their counterparts in other states, those on the bottom earn less, even though the cost of living here is higher. PPIC reports that high income families now take in $12 for every dollar taken by the lowest earners, making the income gap between rich and poor twice as wide as it was in 1980. Even then the income disparity in California was greater than in the rest of the country.

“Unemployment and underemployment are the hallmarks of the Great Recession,” says PPIC policy fellow Sarah Bohn, who co-authored the report with former PPIC policy researcher Eric Schiff. The findings indicate that a decrease in hours worked, from those that are unemployed or unable to find full-time work, is a larger cause of falling income than low wages themselves. “This suggests that policies that create jobs and promote full-time employment—rather than those that target wage rates—are more likely to be effective in raising family income to pre-recession levels,” Bohn continued.

San Diego County somehow seems to have bucked the negative trend, at least to an extent. It was the only region in the state that actually saw a growth in median income in 2008-2009, though wages here were falling again by 2010.

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The middle class has shrunk to include less than half of all Californians, according to a new report from the Public Policy Institute of California (PPIC).

In 1980, 60 percent of Californian families were considered middle-income, a figure that had shrunk to 47.9 percent by 2010. After adjusting for the cost of living, the definition of “middle-income” was determined to include families earning between $44,00 and $155,000.

Incomes, the report reveals, have fallen across the spectrum. During the official recession of 2007-2009, median income in the state fell by five percent, but the figure dropped another five percent in 2010, even though the nation was officially in recovery.

Things are much worse for the poorest Californians, however. Households in the bottom ten percent of earners lost 21 percent of their income from 2007-2010. While Californians in the top ten percent earn more than their counterparts in other states, those on the bottom earn less, even though the cost of living here is higher. PPIC reports that high income families now take in $12 for every dollar taken by the lowest earners, making the income gap between rich and poor twice as wide as it was in 1980. Even then the income disparity in California was greater than in the rest of the country.

“Unemployment and underemployment are the hallmarks of the Great Recession,” says PPIC policy fellow Sarah Bohn, who co-authored the report with former PPIC policy researcher Eric Schiff. The findings indicate that a decrease in hours worked, from those that are unemployed or unable to find full-time work, is a larger cause of falling income than low wages themselves. “This suggests that policies that create jobs and promote full-time employment—rather than those that target wage rates—are more likely to be effective in raising family income to pre-recession levels,” Bohn continued.

San Diego County somehow seems to have bucked the negative trend, at least to an extent. It was the only region in the state that actually saw a growth in median income in 2008-2009, though wages here were falling again by 2010.

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Incomes, the report reveals, have fallen across the spectrum. During the official recession of 2007-2009, median income in the state fell by five percent, but the figure dropped another five percent in 2010, even though the nation was officially in recovery."

Income has NOT fallen for government employees at all, they are actually receiving wage and benefit increases, as the state has increased spending 15% per year since this depression began in the 4th qtr of 2007.

Look at the prison guards new contract for proof of that, or the LA water and power, who receivied 7% increases EVERY YEAR of a 5 year contract that began in 2008-for a 35% increase over 5 years-3 times the rate of inflation.

Dec. 8, 2011

Dear S. Puppy619, In your haste to negatively cast state workers, you forgot that that many had their pay cut. And worst many lost their jobs,homes and futures. Also, myself, had no pay increases for five years while the cost of living went up. Our top administrators at UCSD (yes that 1%) have increased their pay and benefits during this time frame. You might want to consider that you get what you pay for too. I wonder what a minimum wage prison guard would be like?

Dec. 8, 2011

"In your haste to negatively cast state workers, you forgot that that many had their pay cut. And worst many lost their jobs,homes and futures"

I know of NO public employees who took ANY pay cuts, but there are plenty of documented cases of increased spendin in ALL areas, and since 90% of taxes got o gov compensation that means pay INCREASES for public emplpyees, such as the 12% (not 15%, I mis-typed above annual increases in state spending since 4th qtr 2007 when this depression began) the 7% bumps LA water and power got every year if a 5 year contract-35% increase over 5 years, the 3% annual increases the prison guards received. Thise are just two that are particularly outrageous.

I wonder what a minimum wage prison guard would be like?"

I would guess a GED minimum wage prison guard would be exaclty the same as the $200K GED educated ones they haveright now-where they brinbg cell phones and drugs into the prisons. How would they be NAY different???

Or do you think GED educated employees who work for the state deserve to be paid more than a medical doctor (or dentist or CPA or lawyer) with 10 PLUS years of college, half a million in student loans and was deprived of a chance to make a living for 10 PLUS years by beibng in school getting that medical degree??? BTW-doctors do not reitre at age 50 with $10 million oensiosn either.

I dont have the graphs anymore on the pay and employment of public employees since this began, but it was shocking.

Dec. 8, 2011

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