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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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Feds face skeptical judge in lawsuit to overturn California’s ban on masked ICE agents

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Feds face skeptical judge in lawsuit to overturn California’s ban on masked ICE agents


A top Trump administration lawyer pressed a federal judge Wednesday to block a newly enacted California law that bans most law enforcement officers in the state from wearing masks, including U.S. Immigration and Customs Enforcement agents.

Tiberius Davis, representing the U.S. Department of Justice, argued at a hearing in Los Angeles that the first-of-its-kind ban on police face coverings could unleash chaos across the country, and potentially land many ICE agents on the wrong side of the law it were allowed to take effect.

“Why couldn’t California say every immigration officer needs to wear pink, so it’s super obvious who they are?” Davis told U.S. District Judge Christina A. Snyder. “The idea that all 50 states can regulate the conduct and uniforms of officers … flips the Constitution on its head.”

The judge appeared skeptical.

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“Why can’t they perform their duties without a mask? They did that until 2025, did they not?” Snyder said. “How in the world do those who don’t mask manage to operate?”

The administration first sued to block the new rules in November, after Gov. Gavin Newsom signed the No Secret Police Act and its companion provision, the No Vigilantes Act, into law. Together, The laws bar law enforcement officers from wearing masks and compel them to display identification “while conducting law enforcement operations in the Golden State.” Both offenses would be misdemeanors.

Federal officials have vowed to defy the new rules, saying they are unconstitutional and put agents in danger. They have also decried an exception in the law for California state peace officers, arguing the carve out is discriminatory. The California Highway Patrol is among those exempted, while city and county agencies, including the Los Angeles Police Department, must comply.

“These were clearly and purposefully targeted at the federal government,” Davis told the court Wednesday. “Federal officers face prosecution if they do not comply with California law, but California officers do not.”

The hearing comes at a moment of acute public anger at the agency following the fatal shooting of American protester Renee Good by ICE agent Jonathan Ross in Minneapolis — rage that has latched on to masks as a symbol of perceived lawlessness and impunity.

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“It’s obvious why these laws are in the public interest,” California Department of Justice lawyer Cameron Bell told the court Wednesday. “The state has had to bear the cost of the federal government’s actions. These are very real consequences.”

She pointed to declarations from U.S. citizens who believed they were being abducted by criminals when confronted by masked immigration agents, including incidents where local police were called to respond.

“I later learned that my mother and sister witnessed the incident and reported to the Los Angeles Police Department that I was kidnapped,” Angeleno Andrea Velez said in one such declaration. “Because of my mother’s call, LAPD showed up to the raid.”

The administration argues the anti-mask law would put ICE agents and other federal immigration enforcement officers at risk of doxing and chill the “zealous enforcement of the law.”

“The laws would recklessly endanger the lives of federal agents and their family members and compromise the operational effectiveness of federal law enforcement activities,” the government said in court filings.

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A U.S. Border Patrol agent on duty Aug. 14 outside the Japanese American National Museum, where Gov. Gavin Newsom was holding a news conference in downtown Los Angeles.

(Carlin Stiehl / Los Angeles Times)

Davis also told the court that ICE‘s current tactics were necessary in part because of laws across California and in much of the U.S. that limit police cooperation with ICE and bar immigration enforcement in sensitive locations, such as schools and courts.

California contends its provisions are “modest” and aligned with past practice, and that the government’s evidence showing immigration enforcement would be harmed is thin.

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Bell challenged Department of Homeland Security statistics purporting to show an 8,000% increase in death threats against ICE agents and a 1,000% increase in assaults, saying the government has recently changed what qualifies as a “threat” and that agency claims have faced “significant credibility issues” in federal court.

“Blowing a whistle to alert the community, that’s hardly something that increases threats,” Bell said.

On the identification rule, Snyder appeared to agree.

“One might argue that there’s serious harm to the government if agents’ anonymity is preserved,” she said.

The fate of the mask law may hinge on the peace officer exemption.

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“Would your discrimination argument go away if the state changed legislation to apply to all officers?” Snyder asked.

“I believe so,” Davis said.

The ban was slated to come into force on Jan. 1, but is on hold while the case makes its way through the courts. If allowed to take effect, California would become the first state in the nation to block ICE agents and other federal law enforcement officers from concealing their identities while on duty.

A ruling is expected as soon as this week.

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She moved from California to Sweden for a better life — she wasn’t prepared for the quiet | CNN

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She moved from California to Sweden for a better life — she wasn’t prepared for the quiet | CNN


There are few things Arabella Carey Adolfsson enjoys more than going fishing near her lakeside home in Sweden during the summertime, or getting her camera out and taking photographs of the natural beauty surrounding her.

She and her husband Stefan, a Swede, often take their boat out from Torpön, the island where they live, onto the waters of Lake Sommen, savoring the picturesque views of the surrounding fields, forests and cliffs.

“It’s gorgeous here,” Adolfsson, who was born and raised in San Diego, tells CNN Travel. “Sweden is beautiful. The lake is beautiful. The air is clean. There’s no traffic.”

Since moving to Scandinavia in 2022, after spending much of her life in California, she’s come to appreciate the rhythm of having four distinct seasons — though Swedish winters, she admits, “can be quite brutal.”

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There are other pleasures too. Adolfsson says she enjoys being close to the rest of Europe. The couple sometimes drive to Copenhagen and then fly to Portugal, or drive to Stockholm, four hours away, where they can “jump on a plane to Latvia or Hungary.”

And yet, nearly three years into the move, Adolfsson says that settling into life in Sweden has come at a cost she hadn’t fully anticipated.

She and her husband, who met and married in 2009, had long imagined splitting their time between Sweden, Mexico and California. Stefan and Adolfsson who is Mexican American, have three children and three grandchildren between them.

They first tried living in Sweden together in 2016, moving to the southern city of Lund, near Malmö, but after two and a half years Adolfsson returned to the United States, homesick.

They decided to try again after what she describes as a serendipitous moment in August 2022, when she came across an online listing for a “beautiful” furnished lakeside house on Torpön. Within a month, they had bought the property and by October, they had moved in.

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Only after arriving in Torpön did Adolfsson realize that their new home was “in the middle of nowhere.” The island, small and sparsely populated, is at least half an hour drive to what she calls “civilization.”

Despite having lived in Sweden before, moving to such a remote part of the country proved to be a culture shock for Adolfsson. Days can pass without her seeing anyone other than her husband.

“I’m very much a person who loves people and gets my energy from being around people,” she said. On Torpön, she added, residents tend to keep to themselves. Making friends has been difficult.

Back in San Diego, Adolfsson was surrounded by her large extended family. The absence of that community has been one of the hardest adjustments for her.

“There was a huge slice of my life that was taken away,” she says. “And I still haven’t figured out what to replace it with.” She is, however, grateful that her sister lives in Germany, which is in the same time zone as Sweden.

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She recognizes that life might feel different in a city, rather than on an island with no public transportation and a single restaurant.

Torpön hums with activity in the summer — kayaking, paddleboarding, boating — but winters are long and quiet, the island more or less deserted.

Adolfsson and Stefan, who works as a substitute teacher, plan their grocery shopping trips to the mainland carefully, stocking up before retreating indoors. When a foot of snow is on their doorstep, they “huddle up in the house and eat and drink.”

Adapting, she has learned, requires a mental reset. “It’s a matter of reworking the program in your head that you were used to running,” she says, “and running a new program.”

Adolfsson’s “new program” involves seeing as much of Europe as she can. She’s traveled to Slovenia, Latvia, Portugal, Germany and Mallorca since moving to Sweden, making collages of her photographs for family and friends and writing a children’s book inspired by her grandchildren.

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“This allows me the time to be creative,” she says.

Video chats keep her in touch with family and friends back in the US. Adolfsson cherishes her Sunday calls with her family, describing how her three-year-old grandson “hugs the telephone” before saying goodbye. “Thank God for the technologies that we have now, so that we can be expats and stay connected,” she says.

Language has been another hurdle. Although she had some Swedish before moving, Adolfsson was far from fluent. Classes have helped her better communicate, but her limited skill proved a barrier to integrating with Swedes. The reserve she perceives in Swedish culture has also required her to make some adjustments.

“I’m Hispanic, and we’re like PDAs all over the place,” she says. “The Swedes are more reserved. So you don’t have a lot of hugging and kissing.”

There are plenty of upsides. Her new life may be much quieter than the one she left behind in San Diego, but Arabella Carey, who works remotely, says there’s a distinct “lack of stress,” which she’s grateful for.

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The cost of living is more favorable, too. “Everything is cheaper” in Sweden compared to California, Adolfsson says — particularly housing. The water in her home is free “because it comes from the lake.”

Health care in Sweden is far less expensive than the US, she says. When she spent five days in hospital after a fall a few years ago, she was amazed to receive a total bill of less than $100.

While she has grown to appreciate many aspects of Swedish life, the cuisine is not among them. She misses easy access to good Mexican food and says finding “a decent tortilla” has proved elusive. And, having come to appreciate the “finer things of life” as she’s gotten older, she finds herself at odds with “down to earth” Swedish culture.

She misses the ease of some aspects of life in the US, stressing that “Sweden is not a convenient country.” She’s bemused by what she describes as the do-it-yourself culture, which she finds “very admirable but way over my head.”

Looking back, Arabella Carey believes that the move would’ve been easier and simpler at a younger age. “Change is more difficult the older you get,” she observes.

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She wishes she’d had more of an understanding of the techniques and behaviors required “to explore, integrate and assimilate” in a new place with ease before leaving the US, and feels that these are becoming “necessary skills” the “more global we become.”

For now, she plans to remain in Sweden, returning to San Diego every few months and hoping, eventually, to return back for good — if she can persuade her husband.

Her advice to others considering a similar move later in life is to ensure they “have a connection” to the place, and “understand that it’s going to take time.”

“You’re going to be lonely and alone at times,” she adds. “And you’re going to have some tough days where you wish you were home. But you’re going to make some great memories.”

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Push for stricter cap on rent increases dies in the California Legislature

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Push for stricter cap on rent increases dies in the California Legislature


A contentious housing bill that would have capped rent increases to 5% a year died in the Assembly on Tuesday, a decision greeted with boos and cries of disapproval from spectators packed inside the committee chamber.

Assembly Bill 1157 would have lowered California’s limit on rent increases from 10% to 5% annually and removed a clause that allows the cap to expire in 2030. It also would have extended tenant protections to single-family homes — though the bill’s author, Assemblyman Ash Kalra (D-San José), offered to nix that provision.

“Millions of Californians are still struggling with the high cost of rent,” Kalra said. “We must do something to address the fact that the current law is not enough for many renters.”

Assemblymember Diane Dixon (R-Newport Beach) said she was concerned the Legislature was enacting too many mandates and restrictions on property owners. She pointed to a recent law requiring landlords to equip rentals with a refrigerator.

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“That sounds nice and humanly caring and all that and warm and fuzzy but someone has to pay,” she said. “There is a cost to humanity and how far do we squeeze the property owners?”

The California Apartment Assn., California Building Industry Assn., California Chamber of Commerce and California Assn. of Realtors spoke against the legislation during Tuesday’s hearing before the Assembly Judiciary Committee.

Debra Carlton, spokesperson for the apartment association, said the bill sought to overturn the will of the voters who have rejected several ballot measures that would have imposed rent control.

“Rather than addressing the core issue, which is California’s severe housing shortage, AB 1157 places blame on the rental housing industry,” she said. “It sends a chilling message to investors and builders of housing that they are subject to a reversal of legislation and laws by lawmakers. This instability alone threatens to stall or reverse the great work legislators have done in California in the last several years.”

Supporters of the bill included the Alliance of Californians for Community Empowerment Action, a statewide nonprofit that works for economic and social justice. The measure is also sponsored by Housing Now, PICO California, California Public Advocates and Unite Here Local 11.

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The legislation failed to collect the votes needed to pass out of committee.

On Monday, proponents rallied outside the Capitol to drum up support. “We are the renters; the mighty mighty renters,” they chanted. “Fighting for justice, affordable housing.”

“My rent is half of my income,” said Claudia Reynolds, who is struggling to make ends meet after a recent hip injury. “I give up a lot of things. I use a cellphone for light; I don’t have heat.”

Lydia Hernandez, a teacher and renter from Claremont, said she used to dream of owning a home. As the first person in her family to obtain a college degree, she thought it was an obtainable goal. But now she worries she won’t even be able to keep up with her apartment’s rent.

Hernandez recalled noticing a woman who had recently become homeless last week on her way to school.

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“I started to tear up,” said Hernandez, her voice cracking. “I could see myself in her in my future, where I could spend my retirement years living an unsheltered life.”

After Tuesday’s vote, Anya Svanoe, communications director for ACCE Action, said many of their members felt betrayed.

“While housing production is a very important part of getting us out of this housing crisis, it isn’t enough,” she said. “Families are in dire need of protections right now and we can’t wait for trickle-down housing production.”

In California, 40.6% of households are spending more than 30% of their income on housing, according to an analysis released in 2024 by the Pew Research Center. The U.S. Department of Housing and Urban Development considers households that spend more than 30% of their incomes on housing to be “cost burdened.”

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