"A Generation of Widening Inequality: The State of Working California, 1979 to 2006" is our site of the day

A report released today by the California Budget Project (CBP), A Generation of Widening Inequality: The State of Working California, 1979 to 2006,documents that the gap between low wage and high wage workers has widened.in the last three decades.

Based on U.S. Census data, the report meticulously documents that the jobs being created in California are largely either in low or high wage jobs, with little job growth that is in the middle of the earnings distribution. Coupled with the fact that California is a high cost state to live in, this has sobering implications for the decline of the middle class in California.

The report itself is 72 pages long and yet is very readable. There is a 4 page executive summary in the report.

There is also a separate 65 page report, "The State of Working California: A Profile of California Counties", that provides detailed population, employment, and poverty data by county and shows that there is both remarkable prosperity and pervasive poverty in different counties.

Jean Ross, Executive Director of CBP, a nonpartisan public policy research group, said this about the reports' findings: "By slow degrees, California has changed from a state where opportunities abounded, and prosperity was more broadly shared, to one with an increasing divide between the rich and the poor. This is bad news for California, because inequality adversely impacts our communities and our society. It makes it harder for working families to succeed and to give their children a decent start in life. California needs public policies that address the growing gap between the haves and have-nots."

Among the findings of the reports:

• Growth has been concentrated in low- and high-wage jobs, raising questions about future opportunities for low- and middle-income Californians. Between 1979 and 2005, the state added large shares of both low-wage and high-wage jobs, but experienced substantially less growth in jobs in the middle of the distribution. Moreover, California's job growth was considerably more concentrated at each end of the earnings distribution during the 1990s and early 2000s than in the 1980s. Projections suggest this trend will continue in coming years, raising questions about opportunities that will be available to low- and middle-income Californians in the future.

• Income gains haven't been broadly shared. The gains of high-income Californians have far surpassed those of lower-income Californians in recent years, while Californians in the middle of the distribution have experienced modest gains. Some Californians have managed to make ends meet in the face of stagnating or declining earnings by working longer and harder. For example, middle-income married women with children work more hours today than did similar women a generation ago, and their additional work effort is the reason that families' incomes have outpaced inflation. However, approximately 2 million working families have incomes below 200 percent of the federal poverty line, a level which fails to provide an adequate standard of living.

• California's jobs have shifted from manufacturing to services. Manufacturing jobs have declined as a percentage of the state's total number of jobs -- a concern because this sector traditionally has provided many workers without college degrees with well-paying jobs. California lost 464,700manufacturing jobs between 1990 and 2006 – a 23.6% decline. At the same time, the state's share of service jobs has increased, reflecting gains in both high-wage and low-wage sectors.

• California has increased its share of the nation’s high-tech and trade-related jobs.

• Californians are working harder than they once did, but getting less in return. Today, California's workers are less likely to have job-based benefits, such as job-based health coverage and job-based pension plans, than workers did a generation ago.

• The benefits of economic growth during the current economic recovery which began in 2001 have failed to "trickle down" to many Californians. Instead, productivity growth led to skyrocketing corporate profits, while many Californians experienced relatively minimal increases in wages and incomes.

There is a lot more in these reports, which will be in the news today. These reports will factor into debates about education, tax and spending policies of California and local governments, and many other public policy areas. They are well worth the time to review them and keep them in mind for future debates about how our state should be responding.