Compared to 25 years ago, the incomes of the wealthiest households and others are now further apart, and the region’s middle class is smaller. Much like the greater Bay Area and California as a whole, Silicon Valley is a far more unequal place than it used to be.
April 13, 2016
The enactment of California’s $15 state minimum wage is, of course, not the final word, as state leaders will be able to make adjustments over time to deal with the current unknowns. The plan to reach $15 by 2022 includes provisions for delaying the scheduled increases if the economy weakens or the state budget is projected to face a deficit, as discussed above. In addition, because the increase will be implemented gradually, policymakers will be able to monitor its effects and make additional adjustments if necessary. For example, it will be important to look at how the minimum wage increase affects lower-cost regions of the state, where the wage hike is expected to have a much greater impact, and also how it affects workers’ access to subsidized child care, which low-paid workers need in order to work.
Jan. 12, 2015
The CBP's report shows that even with increased state revenues and a continuing economic recovery that has yet to reach many Californians, the Governor's proposed budget prioritizes fiscal austerity over investing in broadly shared prosperity. The Governor's proposal does reflect a focus on policy changes enacted in prior years -- such as California's new K-12 funding formula and the state's implementation of federal health care reform -- that move the state forward in important ways. Yet, while the Governor's proposal includes long-term plans for paying down budgetary debt and saving for a rainy day, it does not present a similar vision for tackling California's biggest challenges: still-high levels of unemployment and poverty, widening income inequality, and a safety net severely weakened by years of funding cuts.
A new analysis from the California Budget Project (CBP) looks at how California could create its own state EITC and shows that a refundable state credit could provide an economic boost for more than 3 million households. In addition, a state EITC would help rebalance California's tax system, under which low-income families currently pay an outsize share of their incomes in state and local taxes, and would also strengthen our state's social safety net.
While the outlook for California’s jobseekers is considerably better than in recent years, substantial challenges remain. Unemployment remains high in many regions across the state, and persistent weakness in the public sector job market is undermining the overall strength of the economic recovery. Moreover, the current extended period of economic growth follows decades of wage stagnation and Great Recession will not be suffi cient to ensure broad-based economic growth that reaches workers across the wage distribution.