California Now State of Wealth, Poverty Extremes

Published on October 31st, 2014

California is the state that often points how the rest of the country will go. That should give Americans cause to pause and consider if that’s the way they really want to proceed. One thing about California today is that it is becoming a state of economic extremes – significantly of wealth and poverty.

According to the Census Bureau, California has a higher percentage of poor people than any other state. Of its 38 million residents, 8.9 million (24 percent) are below the poverty level. This compares with the national average of 16 percent. At the same time, California is the home of many wealthy people, including some of the country’s “ultra-wealthy,” the wealthiest of the wealthy. And the gap between the rich and poor is increasing.

“This chasm,” says Larry Gerston, professor of political science at San Jose University, “is growing day by day, year by year.” He notes, “Those at the top in California are just as happy as a clam. Their incomes are going up much faster than anyone else’s.”

What’s increasingly missing from this picture is the middle class, and the reason is that Californians in this social and income bracket have been leaving the state in droves for the past quarter of a century. Alas, this was not always the case – far from it. Between the end of World War II and around 1990, California had a thriving middle class and it offered the invitation of abundant middle-income jobs to people across the nation. As writer Troy Senik noted in National Review Online:

That California was synonymous with opportunity. It was a beacon to the middle class, a place where it was believed that you could author the future on your own terms.

Skid Row, Downtown Los Angeles

Mass immigration has played a significant role in California’s declining opportunities for most of its citizens. As the state with the highest percentage of foreign-born people (27 percent) and the largest number (10.2 million), California is a national bellwether of the impact of immigration. The shrinkage of its middle class as its foreign-born numbers have sharply risen is powerful refutation of the claim that mass immigration is economically enriching.

Immigration indeed has directly contributed to the state’s high level of poverty. Immigrants on average are less educated and skilled than natives and consequently tend to be poorer than the native-born.  Basically as the result of our present immigration policy, notes Robert Rector of the Heritage Foundation, the United States is “importing poverty.”

Public services and assistance for poor immigrants contributed to the rising level of taxes that prompted many middle-class Californians to leave. Statist politicians have found the immigrants useful as a voting bloc for more taxes and government.

At the same time, immigrant labor depressed wages of blue-collar American workers, making it harder for them to remain. Low wages, however, have enhanced the profit margins of economic elites – thus increasing even more the divide between rich and poor.

Extremes of wealth and poverty don’t bode well for any state or country. They are the classic characteristics of a Third World society where the wealthy rule, and the rights and liberties of most people are few. Sadly, the rest of the U.S. is following California’s lead. As Robert Borosage, president of the Institute for America’s Future, observed:

The broad middle class – the triumph and strength of America’s democracy – is sinking. Unless we change course dramatically, we will become even more a nation of have and have nots.

An absolutely essential course change is an immigration policy that promotes a strong middle class, rather than a class structure of a few on the top and many on the bottom.

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