41 ms·

Middle class is disappearing in California as wealth gap grows

55 points by spking 8y ago

masonic 8y ago
URL redirects to thehill.com
watt 8y ago
"Despite having just 12 percent of the national population, California represents nearly a third of all Americans on welfare. [...] In Texas, 6 percent of families in poverty receive welfare. In California, the figure is 66 percent. " I don't know how welfare works in USA, but if it's a federal level program, it would seem California is pulling a pretty clever hack there.
- maxerickson 8y ago
  It's basically impossible to analyze without knowing how the writer is defining the various terms. It's likely one factor is Medicaid expansion, which California participates in and Texas not. A significant percentage of those dollars are federal.
- dragonwriter 8y ago
  > I don't know how welfare works in USA, but if it's a federal level program, it would seem California is pulling a pretty clever hack there. Welfare isn't a program, it's many different programs, almost none of which are fully federally funded, and where (because of its strong aggregate economy despite poor distributional features) California gets less federal cost sharing than most other states (the absolute minimum) in most components that are partly federally funded with a variable federal share. California also has some of the most expansive state (or local) funds only welfare programs. And, bottom line, California pays more federal taxes than it gets federal spending, unlike lots of poorer states; in summary, it's not hacking anything here. Also, the 6 vs. 66 number for Texas vs California is almost certainly using the federal poverty line, not the local CoL-adjusted poverty figure as the base universe. California, on average, has a much higher cost of living than Texas, or the US as a whole, and so the comparison doesn't actually represent those actually in poverty.
  - rayiner 8y ago
    On the new supplemental poverty measure, which accounts for cost of living, California is at 19% and Texas is at 15%: https://www.census.gov/content/dam/Census/library/publications/2018/demo/p60-265.pdf https://www.census.gov/content/dam/Census/library/publicatio....
sudden 8y ago
The socialists and democrats are a truly hilarious bunch.
- free652 8y ago
  I know, blue states are subsidizing the red states. Even California pays more per capita to feds than Texas.
  - justtopost 8y ago
    Not when adjusted for spending. But the numbers here are just a standin for your personal politics. That is not helpful or constructive either.
    - matchbok 8y ago
      It is correct that, as a whole, blue states are wealthier, stronger, and healthier. We pay more per-person in taxes whereas most red states consume more federal dollars.
      - joejerryronnie 8y ago
        Blue states have a higher ceiling (i.e. wealthier but more income inequality) while red states have a higher floor (i.e. poorer but less income inequality). Maybe we need more purple states. It's hard to strike the right balance between social liberalism and fiscal conservatism. Edit: After looking at the stats, it appears that income inequality is generally higher across the Southern US than the Northern US, with CA and NY as notable exceptions. Income inequality is growing fastest in the Western and Midwestern US.
        deleted 8y ago
        [deleted]
        nickthemagicman 8y ago
        This is not an accurate statement.
stochastic_monk 8y ago
Non-AMP link: https://thehill.com//finance/412928-middle-class-is-disappearing-in-california-as-wealth-gap-grows https://thehill.com//finance/412928-middle-class-is-disappea...
- deleted 8y ago
  [deleted]
- dang 8y ago
  Changed from https://www.google.com/amp/s/thehill.com/opinion/finance/412928-middle-class-is-disappearing-in-california-as-wealth-gap-grows%3famp https://www.google.com/amp/s/thehill.com/opinion/finance/412....
chrisseaton 8y ago
I can't tell if they think they vast numbers of people in California working in tech, research, academia etc are working class, or upper class. Both seem ludicrous ideas.
- theoh 8y ago
  The argument made in the piece is that there is increased polarization between the haves and the have nots. Successful professionals are haves. I don't know what nuances the term "upper class" has historically had in California; perhaps it's not the right word for those earning (as little as) a hundred thousand a year. But the idea that there is now a privileged socioeconomic group which no longer blends, at the low end, into the traditionally larger middle class and lower middle class seems like a clearly testable proposition. In other words, the claim is that the middle class is evaporating and tech professionals are left on the wealthier side of the gap, typically earning "upper class" salaries. In the UK, a huge proportion of the population identifies as working class, somewhat bogusly. Tech workers tend to be part of what is sometimes called the "technical middle class", a new (post-WW2) and slightly wretched group with little cultural or social capital but strong finances. Ramen-eating programmers are in the technical middle class even if their earnings haven't yet matched those of more established professionals. I agree that both "working" and "upper" are anachronistic categories.
  - chrisseaton 8y ago
    I think if you're working a job and earning a salary or a little equity, then you're clearly middle class at best. I think it's the working class that's being eroded, leaving the a middle class on one side, and the destitute on the other, with the upper class being the same as it ever was.
    - theoh 8y ago
      Well, the Pew research organization puts everyone who earns above a certain amount in the upper class. It's about 100k. And we know that the rich have got even richer in the last few years, with a thinning of the "middle" earners. There are plenty of articles out there which focus on the erosion of the middle class. As I mentioned, some people (in the UK for example) are invested in the idea of the working class, and draw the class boundaries between working and middle so as to enlarge the working class. Often this is about preserving their own identity rather than assessing the wealth of different social strata. But living in relative comfort has been a middle class thing.
vannevar 8y ago
The author cites a variety of statistics regarding California's government programs and poverty rate, then draws the completely unsupported conclusion that the one creates the other. Generally, the conservative argument against taxes and regulation is that they handicap business and consequently hurt economic growth. It's hard to make that argument for California, which has had one of the strongest state economic growth rates in the nation despite being the largest state economy. Faced with this clear contradiction, the author simply dispenses with any kind of coherent theory and simply takes as a given that California's poverty must be due to taxes and welfare programs.
- rayiner 8y ago
  California does not have particularly strong economic growth. From 2003 to 2013, it slightly trailed the country in GSP growth per capita and personal income growth: https://www.heritage.org/sites/default/files/~/media/infographics/2015/05/sr152/bgredstatesbluestatestable3825.jpg https://www.heritage.org/sites/default/files/~/media/infogra.... (To calculate GSP growth per capita, divide the GSP growth column by the population growth column.) More recent data also shows pretty middling results: https://www.bea.gov/news/archive?field_related_product_target_id=461&created_1=All&title=&=Apply https://www.bea.gov/news/archive?field_related_product_targe.... Adjusted for cost of living, California's income level is about in the middle too: http://i.imgur.com/WdfQqJR.jpg.[1] http://i.imgur.com/WdfQqJR.jpg.[1] The idea that California is a prosperous state is a myth. California is a very expensive state, with higher salaries that do not compensate for the cost of living. And it has a few very rich people (in tech, entertainment, etc.) that don't do much to move the needle on averages. [1] One can debate the relevance of the cost-of-living adjustment for engineers making $400k/year, but in the middle class salary range, where groceries and rent make up a bigger fraction of expenses than toys or savings, cost of living is a driving factor.
  - JauntTrooper 8y ago
    California’s GDP is almost $3 trillion per year. That’s larger than the U.K.’s (the world’s 5th largest economy) with far fewer people (40M Californians vs. 66M in the U.K.) Of course it has its problems. The cost of living is high especially in the cities. Still, it’s a real stretch to say it’s not a prosperous state.
gumby 8y ago
This is really an oddball collection of bad news (although it does properly add context to the %-of-population numbers). This bad news is well worth repeating, though there's plenty more. However it's hard to understand the point of the piece. The author describes herself as a libertarian and wrote a book calling taxation a rip off. Yet the only real analysis seems, to my reading, to claim that more government would help. It seems especially at the end that she is criticizing unregulated capitalism. (for context: I consider CA to be one of, if not the, best run states in the Union, despite its manifold problems and failures. And while like anyone I could easily make a list of rules I think should be eliminated, I hardly think the blanket libertarian position of "less regulation" is any sort of solution).
rjkennedy98 8y ago
> '“Not In My Backyard” development and construction restrictions mean that California cities are much more expensive for the poor' Don't agree with the rest of the article but this is the crux of the issue. Banning single family zoning in urban areas like Minneapolis is doing would be a good start. The hypocrisy among liberals when it comes to housing is just astonishing. Nothing epitomizes this as when the Mayor of Berkeley who independently joined the Paris climate accords called a pro-housing bill an attack on their way of life https://www.berkeleyside.com/2018/01/22/berkeley-mayor-wiener-skinner-housing-bill-declaration-war-neighborhoods https://www.berkeleyside.com/2018/01/22/berkeley-mayor-wiene....

55 points by spking 8y ago

URL redirects to thehill.com

watt 8y ago

"Despite having just 12 percent of the national population, California represents nearly a third of all Americans on welfare. [...] In Texas, 6 percent of families in poverty receive welfare. In California, the figure is 66 percent. " I don't know how welfare works in USA, but if it's a federal level program, it would seem California is pulling a pretty clever hack there.

maxerickson 8y ago
It's basically impossible to analyze without knowing how the writer is defining the various terms. It's likely one factor is Medicaid expansion, which California participates in and Texas not. A significant percentage of those dollars are federal.
dragonwriter 8y ago
> I don't know how welfare works in USA, but if it's a federal level program, it would seem California is pulling a pretty clever hack there. Welfare isn't a program, it's many different programs, almost none of which are fully federally funded, and where (because of its strong aggregate economy despite poor distributional features) California gets less federal cost sharing than most other states (the absolute minimum) in most components that are partly federally funded with a variable federal share. California also has some of the most expansive state (or local) funds only welfare programs. And, bottom line, California pays more federal taxes than it gets federal spending, unlike lots of poorer states; in summary, it's not hacking anything here. Also, the 6 vs. 66 number for Texas vs California is almost certainly using the federal poverty line, not the local CoL-adjusted poverty figure as the base universe. California, on average, has a much higher cost of living than Texas, or the US as a whole, and so the comparison doesn't actually represent those actually in poverty.
- rayiner 8y ago
  On the new supplemental poverty measure, which accounts for cost of living, California is at 19% and Texas is at 15%: https://www.census.gov/content/dam/Census/library/publications/2018/demo/p60-265.pdf https://www.census.gov/content/dam/Census/library/publicatio....

sudden 8y ago

The socialists and democrats are a truly hilarious bunch.

free652 8y ago
I know, blue states are subsidizing the red states. Even California pays more per capita to feds than Texas.
- justtopost 8y ago
  Not when adjusted for spending. But the numbers here are just a standin for your personal politics. That is not helpful or constructive either.
  - matchbok 8y ago
    It is correct that, as a whole, blue states are wealthier, stronger, and healthier. We pay more per-person in taxes whereas most red states consume more federal dollars.
    - joejerryronnie 8y ago
      Blue states have a higher ceiling (i.e. wealthier but more income inequality) while red states have a higher floor (i.e. poorer but less income inequality). Maybe we need more purple states. It's hard to strike the right balance between social liberalism and fiscal conservatism. Edit: After looking at the stats, it appears that income inequality is generally higher across the Southern US than the Northern US, with CA and NY as notable exceptions. Income inequality is growing fastest in the Western and Midwestern US.
      - deleted 8y ago
        [deleted]
      - nickthemagicman 8y ago
        This is not an accurate statement.

stochastic_monk 8y ago

Non-AMP link: https://thehill.com//finance/412928-middle-class-is-disappearing-in-california-as-wealth-gap-grows https://thehill.com//finance/412928-middle-class-is-disappea...

deleted 8y ago
[deleted]
dang 8y ago
Changed from https://www.google.com/amp/s/thehill.com/opinion/finance/412928-middle-class-is-disappearing-in-california-as-wealth-gap-grows%3famp https://www.google.com/amp/s/thehill.com/opinion/finance/412....

chrisseaton 8y ago

I can't tell if they think they vast numbers of people in California working in tech, research, academia etc are working class, or upper class. Both seem ludicrous ideas.

theoh 8y ago
The argument made in the piece is that there is increased polarization between the haves and the have nots. Successful professionals are haves. I don't know what nuances the term "upper class" has historically had in California; perhaps it's not the right word for those earning (as little as) a hundred thousand a year. But the idea that there is now a privileged socioeconomic group which no longer blends, at the low end, into the traditionally larger middle class and lower middle class seems like a clearly testable proposition. In other words, the claim is that the middle class is evaporating and tech professionals are left on the wealthier side of the gap, typically earning "upper class" salaries. In the UK, a huge proportion of the population identifies as working class, somewhat bogusly. Tech workers tend to be part of what is sometimes called the "technical middle class", a new (post-WW2) and slightly wretched group with little cultural or social capital but strong finances. Ramen-eating programmers are in the technical middle class even if their earnings haven't yet matched those of more established professionals. I agree that both "working" and "upper" are anachronistic categories.
- chrisseaton 8y ago
  I think if you're working a job and earning a salary or a little equity, then you're clearly middle class at best. I think it's the working class that's being eroded, leaving the a middle class on one side, and the destitute on the other, with the upper class being the same as it ever was.
  - theoh 8y ago
    Well, the Pew research organization puts everyone who earns above a certain amount in the upper class. It's about 100k. And we know that the rich have got even richer in the last few years, with a thinning of the "middle" earners. There are plenty of articles out there which focus on the erosion of the middle class. As I mentioned, some people (in the UK for example) are invested in the idea of the working class, and draw the class boundaries between working and middle so as to enlarge the working class. Often this is about preserving their own identity rather than assessing the wealth of different social strata. But living in relative comfort has been a middle class thing.

vannevar 8y ago

The author cites a variety of statistics regarding California's government programs and poverty rate, then draws the completely unsupported conclusion that the one creates the other. Generally, the conservative argument against taxes and regulation is that they handicap business and consequently hurt economic growth. It's hard to make that argument for California, which has had one of the strongest state economic growth rates in the nation despite being the largest state economy. Faced with this clear contradiction, the author simply dispenses with any kind of coherent theory and simply takes as a given that California's poverty must be due to taxes and welfare programs.

rayiner 8y ago
California does not have particularly strong economic growth. From 2003 to 2013, it slightly trailed the country in GSP growth per capita and personal income growth: https://www.heritage.org/sites/default/files/~/media/infographics/2015/05/sr152/bgredstatesbluestatestable3825.jpg https://www.heritage.org/sites/default/files/~/media/infogra.... (To calculate GSP growth per capita, divide the GSP growth column by the population growth column.) More recent data also shows pretty middling results: https://www.bea.gov/news/archive?field_related_product_target_id=461&created_1=All&title=&=Apply https://www.bea.gov/news/archive?field_related_product_targe.... Adjusted for cost of living, California's income level is about in the middle too: http://i.imgur.com/WdfQqJR.jpg.[1] http://i.imgur.com/WdfQqJR.jpg.[1] The idea that California is a prosperous state is a myth. California is a very expensive state, with higher salaries that do not compensate for the cost of living. And it has a few very rich people (in tech, entertainment, etc.) that don't do much to move the needle on averages. [1] One can debate the relevance of the cost-of-living adjustment for engineers making $400k/year, but in the middle class salary range, where groceries and rent make up a bigger fraction of expenses than toys or savings, cost of living is a driving factor.
- JauntTrooper 8y ago
  California’s GDP is almost $3 trillion per year. That’s larger than the U.K.’s (the world’s 5th largest economy) with far fewer people (40M Californians vs. 66M in the U.K.) Of course it has its problems. The cost of living is high especially in the cities. Still, it’s a real stretch to say it’s not a prosperous state.

gumby 8y ago

This is really an oddball collection of bad news (although it does properly add context to the %-of-population numbers). This bad news is well worth repeating, though there's plenty more. However it's hard to understand the point of the piece. The author describes herself as a libertarian and wrote a book calling taxation a rip off. Yet the only real analysis seems, to my reading, to claim that more government would help. It seems especially at the end that she is criticizing unregulated capitalism. (for context: I consider CA to be one of, if not the, best run states in the Union, despite its manifold problems and failures. And while like anyone I could easily make a list of rules I think should be eliminated, I hardly think the blanket libertarian position of "less regulation" is any sort of solution).

rjkennedy98 8y ago

> '“Not In My Backyard” development and construction restrictions mean that California cities are much more expensive for the poor' Don't agree with the rest of the article but this is the crux of the issue. Banning single family zoning in urban areas like Minneapolis is doing would be a good start. The hypocrisy among liberals when it comes to housing is just astonishing. Nothing epitomizes this as when the Mayor of Berkeley who independently joined the Paris climate accords called a pro-housing bill an attack on their way of life https://www.berkeleyside.com/2018/01/22/berkeley-mayor-wiener-skinner-housing-bill-declaration-war-neighborhoods https://www.berkeleyside.com/2018/01/22/berkeley-mayor-wiene....