The widening gap between rich and poor

Are the rich getting richer and the poor getting poorer? Local, state and national statistics suggest that they are.

Within Yuba, Sutter, Yolo, Colusa and Lake counties, a greater percentage of residents live below the poverty level than Californians on average, according to the US Census Bureau. In California 14.2 percent of its residents live below the poverty level. Of the five-county region, Sutter County comes closest to California’s average, with 15.5 percent of its residents living below poverty. Yuba County is farthest from the state average, with 20.8 percent of its residents living below poverty.

The numbers become more disturbing when California’s poverty level of 14.2 percent is compared to the national average of 12.4 percent of citizens living below poverty. Not only are the five counties among the poorest in the state, but they represent some of the poorest in the country.

According to Dan Walters, a Sacramento Bee Columnist and Capitol insider who spoke on the Marysville campus March 31, “We will have high levels of poverty in California for years to come.”

Interestingly, Yuba, Sutter, Yolo, Colusa and Lake counties each have a higher percentage of white residents than the state average as well. In California, 59.5 percent of its residents are white. Colusa County comes closest to the state average, with 64.3 percent of its residents being white. Lake County is farthest from the state average, with 86.2 percent of its residents being white. The data from all five counties reflects predominately white, poor neighborhoods.

While whites in 1970 composed 83 percent of the nation’s population, in 2002 they made up only 69 percent. In 1970, while Hispanics made up only 4.5 percent of the nation’s population, in 2002 they made up 13.5 percent.

As race demographics have changed considerably in the United States over the last thirty years, so has the growing disparity between the rich and the poor. The most commonly used measure of income inequality, the Gini Index, also known as the index of income concentration, indicates a steady increase nationwide in income inequality since 1968. The United States saw a 22.4 percent increase in income inequality between 1968 and 1994.

According to a Census Bureau report, “Inequality grew slowly in the 1970’s and rapidly during the early 1980’s.”

Between 1970 and 2000, of all Americans, 99 percent had an average increase in total income of $2,710, according to an April 11 San Francisco Chronicle article. David Cay Johnston, who wrote the article, explained, “That is an annual raise of less than $100 per year, the equivalent of a nickel an hour raise each year for 30 years.”

However, the top one percent of Americans faired much better. Johnston explained, “The super rich did fabulously better, their average incomes rising $20.3 million.”

If you plotted this difference on a chart, the increase for 99 percent of Americans would be one inch high while the bar for the one percent of wealthy Americans would soar upward 625 feet, said Johnston.

“Through explicit policies, as well as tax laws never reported in the news,” explained Johnston, “Congress now literally takes money from those making $30,000 to $500,000 per year and funnels it in subtle ways to the super rich-the top 1/100th of the 1 percent of Americans.”

By 2000 the 28,000 Americans at the top had as much income as the 96 million at the bottom, Johnston reported. The disparity is only growing.

Johnston attributes the continued disparity between the rich and poor to Bush’s 2001 tax cuts, which included a stealth tax increase on the middle class and upper-middle class, one that will cost them a half trillion dollars in the first 10 years, wiping out part or all of their Bush tax cuts.

Many Californians face even tougher times. According to statistics compiled by the federal government, as recorded in a 1997 BridgePath article by Auren Hoffmen, California has a higher unemployment rate than most of the country. In fact, only four other states had a higher unemployment rate in 1997 than California, two of them being Hawaii and Alaska-states with traditional high unemployment.

California’s 6.3 percent overall unemployment rate in 1997 was almost a point and a half greater than the national average of 4.9 percent. That rate ranked California fifth in the country-though it was an improvement over the previous year. In 1996 the state was plagued with 7.2 percent unemployment.

The Hoffman analysis suggested that two Californians might exist. In 1997, regions like Modesto were at a 13.4 percent unemployment rate while regions like the Bay Area, San Diego and Orange County had unemployment rates far below the national average. San Jose in 1997 had the lowest unemployment rate in the nation at 3.1 percent.

Hoffman’s belief is that this alarming dichotomy has come about chiefly due to California’s changing economy. Observing that much of the State’s progress relies on agriculture, Hoffman pointed out that technology is quickly becoming the largest employer. Southern California regions and the Bay Area rely heavily on technology while farming cities like Bakersfield have been slow to adopt.

California’s situation is not unique. All around the nation two economies are springing up: the educated and the non-educated workforce. In today’s economy even the lowest paying jobs require computer skills, a high degree of education and training.

Hoffman stated, “It is not surprising that all these new growth areas have grown up around world class universities that help spur innovation.”

According to the United States Department of Labor in Washington D.C., while non-farm payroll employment in March 2004 increased by 308,000, the unemployment rate remained unchanged at 5.7 percent.

The Great Valley Center, a financially solvent non-profit organization that monitors the 19 counties throughout the Central Valley, confronts these statistics optimistically. The organization characterizes the Central Valley, a predominantly agricultural area, as a region of opportunity, with projected home for much of California’s population growth, the swing vote for political leaders, the port of entry for immigrants from Asia and Latin America and the heart of a multi-billion dollar agricultural industry.