The glitter has rubbed off the Golden State.
Besides the obvious problems of excessive housing and energy costs, traffic congestion and smog, California is now becoming a class structured society divided between the haves and the have-nots, with little in between.
According to recently released Census Bureau figures, California has more than its share of wealthy residents and poor residents. What it doesn’t have much of is a middle class.
Those Census figures put California in the top five states for the percentage of families making more than $200,000 a year , 3.7 percent, compared to the national average of 2.7 percent. The percentage of families earning less than $20,000 was 15.8 percent, compared to the national average of 15.7 percent.
The most disturbing figure, however, is the percentage of California residents in the middle income bracket of $35,000 to $75,000 a year. At 34.7 percent, California ranks second lowest among the states for the percentage of population in the middle class.
The Census figures, compiled from a snapshot survey of 700,000 households across the country, confirm studies released over the past few years by the Public Policy Institute of California.
Institute studies released in 1999 and in May of this year indicate that over the past 20 years the gulf between rich and poor in California widened faster than in any other state. The Census figures now show that, as a result of that widening gap, the middle class has been strained and narrowed, the way the center of a taffy pull narrows until it breaks.
The reasons for this economic inequality are myriad. Most often cited is the influx of poorly skilled or uneducated immigrants. Another factor is the state’s increase in lower-paying service sector jobs that replaced well-paying, unionized manufacturing jobs lost to plants overseas or to cutbacks in defense spending. Add to these causes the growing demand for ever larger profit margins at the expense of employees and consumers alike.
The social importance of a strong middle class can not be overstated. The middle class is the foundation of the American Dream, the vehicle that allows movement from the lower economic scales to the upper scales. Without a strong middle class, the rich get richer and the poor simply get poorer. Social unrest like that seen at recent world trade conferences is the ultimate result.
Nor can the economic importance of the middle class be exaggerated. Just as small business is the engine that drives the economy, middle-class spending is the fuel that keeps the engine running.
The middle class, with its discretionary spending, is the main target market for the high-tech gadgetry and biotech pharmaceuticals on which so much of our state’s new economy is based. Squeeze out the middle class, and the economy falls apart like a house of cards.
Education and skills training is generally accepted as the best cure for this growing inequality. But even college graduates and skilled workers need a place to work. As long as our manufacturing base , and the jobs it once provided , continues to be shipped overseas, the chasm between California’s classes will continue to grow wider, while the chances of economic collapse and social unrest continue to grow greater.
