The revelation that California’s $2.5 trillion economy is now the world’s sixth largest is a source of tub-thumping pride for the state’s politicians.
However, as economists explore California’s seemingly powerful emergence from the Great Recession over the last half-decade, they have discovered some troubling trends.
The recovery is geographically and sociologically uneven and widens the “income inequality” gap between those in upper and lower income brackets.
“Pre-tax cash incomes in California have been diverging for decades, and economic cycles have reinforced the longer-term trend,” a new study by the Public Policy Institute of California concludes.
“Top incomes are 40 percent higher than they were in 1980, while middle incomes are only 5 percent higher and low incomes are 19 percent lower.”