While there are national and global pressures on manufacturing, they are acute in California. We have cutting-edge safety and environmental regulations, high costs of living, and a large underclass that does not have the training to serve the demands that manufacturing requires.
Income inequality sharply increased in California as the state emerged from the Great Recession, with the top 1 percent of Californians capturing 135 percent of income growth between 2009 and 2012, according to a new national analysis.
In contrast, the recoveries in the middle part of the country have been, to date, more egalitarian, with incomes rising quickly among a broader number of workers. At the same time, minority incomes in cities such as Houston, Dallas, Miami, and Phoenix tend be far higher, when compared to the incomes of Anglos, than they do in places like San Francisco, New York, or Boston. In these opportunity cities, minority homeownership—a clear demarcation of middle income aspiration—is often twice as high as it is in the epicenters of the ephemeral economy.
Based on average pre-tax income earned by the third quintile, or the middle 20% of earners in each state, middle class incomes in California declined the most in the country. Incomes among middle class Californian households fell by nearly 7% between 2009 and 2013, while income among the state’s fifth quintile, or the top 20% of state earners, grew by 1.3%.
A study by the National Retail Federation and the National Association of Manufacturers estimates that a 10-day shutdown would cost the nation’s economy nearly $2 billion a day and “could be catastrophic” for retailers, manufacturers, farmers and other industries across the economy that rely on the ports for both imports and exports.
The income gap between African Americans and whites in California has reached its widest point in decades, a trend that reflects a broader, growing chasm between the state’s wealthy and poor, experts said.
Taught by local construction workers, young men and women on the margins learn how to operate heavy equipment at Job Corps’ sprawling Meadowview center before they move to “The Ranch,” Operating Engineers Local 3’s Rancho Murieta training grounds. There, they receive seven weeks’ more paid instruction with the opportunity to apprentice with the union and work with local construction firms.
Its official poverty rate was roughly in line with the nation as a whole, but the Census Bureau’s alternative measure, which took into account all forms of income and the cost of living, found nearly a quarter of Californians to be impoverished, by far the highest rate of any state.
In this information age, brains are supposed to be the most valued economic currency. For California, where the regulatory environment is more difficult for companies and people who make things, this is even more the case. Generally speaking, those areas that have the heaviest concentration of educated people generally do better than those who don’t.
The danger in focusing on the most superficial indices of economic health, such as the official unemployment rate, is that politicians will pat themselves on the back and not take the steps, such as regulatory reform, that would be needed for broader, sustainable recovery.
Once again, the two agencies are disagreeing over the extent of outmigration from California to other states, but this time, the Census Bureau is seeing less movement than the state’s demographers. “Domestic migration is the big cause,” says state demographer John Malson.
A more buoyant economy and tightening labor market were supposed to draw in those now sitting on the margins. But the probability of a worker re-entering the labor force continues to slump. Over the past three months, an average of 6.8% of those outside the labor force either found a job or began looking for one. That means people are entering the labor force at the lowest pace in records kept since 1990, down from more than 8% in 2010.
Thursday’s report by the state Department of Finance found that natural increase – the difference between live births and deaths – added 243,000 California residents. The other 92,000 came from net migration to the state, the report shows. More California residents are leaving the state than moving in from other states, but immigration from other countries more than offsets that.
The economic boom is leaving behind workers in California who lost their jobs in manufacturing and construction during the Great Recession and won’t ever regain those vanished positions, and the Bay Area is at the forefront of the upheaval in those and other sectors, according to a reported released Wednesday.
California’s once-soaring population growth slowed markedly during the last two decades, barely keeping pace with the nation as a whole since 2000, and a new Census Bureau report indicates that the state’s growth will continue that pattern for the next half-century due largely to slowing birth and immigration rates.