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California has an income gap problem

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California has an income gap problem


Income inequality in California has reached one of the highest levels in the nation, with the wealthiest families earning significantly more than those at the bottom, according to the U.S. Census Bureau’s Current Population Survey (CPS) data for 2023.

Why It Matters

California’s cost of living is among the highest in the United States, driven significantly by elevated housing expenses. In 2017, the median home price in California was more than 2.5 times the national median, with coastal urban areas experiencing even higher prices.

As a result, less than a third of Californians can afford a median-priced home, and homelessness per capita is the third highest in the nation. This high cost of living, particularly in housing, exacerbates the state’s growing income gap. While the wealthiest residents continue to accumulate significant wealth, the state’s low- and middle-income families face increasing financial pressure.

What To Know

According to 2023 CPS data, California’s wealth divide has reached one of the highest levels in the nation. In 2023, the highest-earning families earned an average of $336,000, which is 11 times more than the lowest-earning families, who earned just $30,000.

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Only Washington, D.C., and Louisiana reported wider income gaps.

Income disparity has grown significantly in California since 1980, when the top earners made seven times more than those at the bottom. Over the past four decades, the incomes of the highest earners have increased by 68 percent, while the incomes of the lowest earners have grown by 10 percent.

The divide is also widening between high- and middle-income earners, with top-income families now making three times more than the median income of $114,000, compared to twice as much in 1980.

California’s income gap is strongly linked to education levels, with families of college graduates earning significantly more than those without degrees.

Since 1980, median income has increased by 40 percent for families where at least one member holds a four-year degree, while it has declined by 9 percent for families without a college graduate. On average, families with a degree earn $2.36 for every $1 earned by families without one.

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In recent years, however, the gap has narrowed slightly. Since 2016, median incomes for families without high school diplomas have grown by 17 percent, compared to 6 percent for those with college degrees. From 2020 to 2023, incomes for non-high school graduates rose 7 percent, while incomes for college graduates increased by just 2 percent.

Income disparities are also sharply divided along racial and ethnic lines. Black and Latino families, who make up 44 percent of California’s population, represent 55 percent of the lowest-income families but only 12 percent of the highest-income households. In contrast, white and Asian families make up 40 percent of the lowest earners but 83 percent of the highest-income households.

On average, for every $1 earned by white families, Asian families earn $0.94, Black families earn $0.63, and Latino families earn $0.52.

Increasing income inequality in California is occurring at the same time that the number of people in the state living below the poverty line is growing.

California’s poverty rate increased from 11.7 percent in 2021 to 13.2 percent in early 2023, with about 5 million residents living below the poverty line, according to the Public Policy Institute of California’s California Poverty Measure. Child poverty saw an even sharper rise, jumping from 9 percent to 13.8 percent in the same period. Despite this, poverty remains lower than pre-pandemic levels, when it stood at 16.4 percent in 2019.

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Nonetheless, nearly one-third of Californians are now either poor or near poor, with 31.1 percent living close to the poverty line. Poverty rates are highest among Latinos (16.9 percent), seniors (15.2 percent), and foreign-born residents (17.6 percent), particularly undocumented immigrants (29.6 percent). Education also plays a key role: while only 6.4 percent of college graduates live in poverty, the rate is 22.3 percent for those without a high school diploma.

Most poor Californians are part of working families, with 76 percent living in households where at least one adult is employed. However, full-time workers face significantly lower poverty rates (5.3 percent) compared to part-time workers (18.5 percent).

File photo of a stack of $1 bills.

Mark Lennihan/AP

What People Are Saying

Tess Thorman, research associate at the Public Policy Institute of California, told Newsweek: “When we compare trends in California to the rest of the country (so, not looking at individual states, but at all other states combined), inequality in California has really surged during recessions on a scale that it has not in the rest of the country.

“Overall, California’s long-term growth in inequality has been characterized by top incomes rising more quickly and consistently than low incomes. Top incomes have rebounded relatively quickly from recessions, while low incomes have seen larger declines and then taken longer to return to their pre-recession levels.

“A number of factors that are specific to California likely play into this variation, including the state’s high cost of living (including housing), a tech- and finance-heavy economy, and immigration patterns.”

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What Happens Next

Data for 2024 has not yet been released. Thorman told Newsweek that it is “difficult to predict” if income inequality will continue to grow in California due to “technological advancements, international trade, and institutional changes.”

“These elements shape jobs and earnings, making future trends in inequality uncertain. Other factors like economic growth and education can also shape inequality and is hard to know what will be happening on those fronts,” Thorman added.



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Teen dies after losing control of electric motorcycle in Garden Grove

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Teen dies after losing control of electric motorcycle in Garden Grove


A 13-year-old boy riding an electric motorcycle in Garden Grove died after veering into the center median, flying into the air and then slamming onto the roadway, authorities said.

The crash took place shortly before 10 p.m. Thursday in the area of Magnolia Street and Larson Avenue, according to the Garden Grove Police Department. The Police Department received word of the incident via a call from Life360, a family safety and location-sharing app with emergency assistance features.

The Santa Ana teen was critically wounded in the crash, police said. He was loaded into an ambulance and taken to a hospital, where he was later pronounced dead.

The boy was traveling at around 35 mph on a black E Ride Pro electric motorcycle when he struck the median and lost control of the vehicle, according to authorities. Electric motorcycles are primarily designed for off-road riding and are not legal to use on California roadways.

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The teen’s death is the latest in a spate of serious collisions involving electric motorcycles and dirt bikes — some of which have led to serious injuries, death or charges for parents who allegedly allowed their minors to illegally ride the speedy devices.

An Orange County mother was charged with involuntary manslaughter last week after authorities said an 81-year-old Vietnam veteran died from injuries he suffered when her 14-year-old son slammed into him while riding an e-motorcycle, then fled the scene.

In April, a Yorba Linda father was charged with felony child endangerment after authorities alleged his son ran a red light and was hit by a car while riding a modified e-motorcycle capable of reaching up to 60 mph.

Last week, a 19-year-old riding an e-motorcycle was arrested on suspicion of felony evading police and felony reckless driving. He was accused of leading sheriff’s deputies on a speedy chase through a residential area of Oceanside, blowing past multiple red lights and knocking a deputy off a motorcycle.

Electric bikes, motorcycles and dirt bikes have surged in popularity in recent years and are especially popular among teens. However, while e-bikes generally top out at 28 mph and are legal to ride on the street, many e-motorcycles can go twice as fast and are generally not street legal.

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Anyone who witnessed Thursday’s crash in Garden Grove or has a video of the incident is asked to contact Investigator Lang via phone at (714) 741-5823 or email at mlang@ggcity.org.



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California to give newborns free diapers. What it means for families

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California to give newborns free diapers. What it means for families


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Gov. Gavin Newsom announced that newborn babies in California will start receiving free diapers as part of a new “first-in-the-nation” initiative to support families across the state with the rising cost of living.

Newsom, along with state leaders, met in San Francisco on Friday, May 8 to unveil California’s new partnership with Baby2Baby, a national nonprofit that provides diapers to children in need, and to explain how this new program will provide families with 400 “high-quality” diapers before they leave the hospital.

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Over the last six years, families have seen the average cost of diapers increase by 45% or “thousands plus dollars a year,” which has made raising a family unattainable for some, Newsom said during the press conference.

“Every baby born in California deserves a healthy start in life — and that means making sure parents have the basics they need from day one,” Newsom said. “One out of four families skip meals in order to pay for diapers.”

“The biggest problem defined universally, in our cities, our state and our nation, is the issue of affordability. This is what affordability looks like; it’s not a slogan, it’s a box. A box of diapers,” Newsom added.

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This new effort will be known as Golden State Start, as California uses its bulk purchasing power to obtain 40 million high-quality diapers in hopes of easing financial strain for families and supporting infant health by helping parents maintain an adequate supply of clean diapers.

“The first days at home with a newborn should be focused on the love, connection, and joy of an expanded family, not stress about affording diapers,” said Kim Johnson, secretary of the California Health and Human Services Agency. “This program helps ensure families can begin that journey with greater stability and peace of mind.”

The program is expected to start at the beginning of this summer in participating California hospitals. The list of participating hospitals was not released at the time of publication, but Newsom noted that the state was in talks with at least 60 hospitals across California.

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During the first year of the program, CalRx and Baby2Baby noted that they would prioritize hospitals that serve large numbers of Medi-Cal patients to ensure low-income families benefit early from the program. The state plans to scale the program to additional hospitals and birthing centers over time.

Newsom noted that this program is expected to grow: In 2027, the state is set to purchase 80 million diapers from manufacturers, with the goal of eventually purchasing up to 160 million.

“California families deserve to feel supported during one of life’s more exciting, yet vulnerable transitions,” Jennifer Siebel Newsom, the first partner, said in a press release. “Golden State Start will deliver immediate relief, allowing parents to focus on what matters most — caring for their newborn. Together with Baby2Baby, we can ease the financial burden on California parents while supporting healthier outcomes for babies and their mothers.”

Noe Padilla is a Northern California Reporter for USA Today. Contact him at npadilla@usatodayco.com, follow him on X @1NoePadilla or on Bluesky @noepadilla.bsky.socialSign up for the TODAY Californian newsletter or follow us on Facebook at TODAY Californian.



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Nordstrom Rack expands in Southern California with new stores

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Nordstrom Rack expands in Southern California with new stores


Nordstrom Rack will open two new Southern California stores next year.

The discount outlet said on Wednesday that it will open new stores in Marina del Rey in the spring of next year and in Torrance later that summer. The locations join 69 Nordstrom Rack locations already operating in the state.

“We’re excited to grow our footprint in the Los Angeles market and introduce new customers to the Nordstrom experience,” Gemma Lionello, president of Nordstrom Rack, said in a news release.

Nordstrom Rack is an outlet version of the upscale retailer Nordstrom, offering merchandise from top brands at a discount.

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Bargain retailers have expanded in California recently, benefiting from increasingly cost-conscious customers, who are motivated to spend less by economic anxiety and inflation.

Discount outlets such as Ross, T.J. Maxx and Dollar General have capitalized on the tough economic times and experienced accelerated growth. Ross reported record sales in 2025, up 8% from the year prior.

Bargain retail stores have acquired a larger supply of discounted products by buying unsold merchandise from struggling high-end stores. Customers who feel destabilized financially by tariffs and global conflict have used the stores to try to find lower prices.

The new Nordstrom Rack storefronts will be in Marina Marketplace in Marina del Rey and Rolling Hills Plaza in Torrance.

“The Los Angeles retail market continues to see growth from retailers like Nordstrom looking for anchor space in vibrant areas,” Scott Burns, senior managing director for the company that manages Marina Marketplace, said in a news release.

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The bargain outlet boom comes as department stores and malls struggle. Nordstrom, the upscale retailer, closed a Santa Monica location in July. Macy’s shuttered two California locations this year and will reduce its footprint by 30% in 2027.

Shopping malls across Southern California have also struggled to bring sales back as immigration raids continue to scare customers away.



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