Hard Times (For Guess Who) in Booming California

In Northern California, the software industry
is sparking one of the greatest economic booms
in human history. In Southern California, the
entertainment industry is generating wealth that
would have staggered even the expansive
imaginations of moguls from Hollywood`s first
golden age. The riches of California`s new
millionaires and billionaires should be
trickling – cascading – down to the rest of
California`s population. After all, as a great
Californian used to say: "A rising tide
lifts all boats."

But in California today, the trickle-down
theory has sprung a leak. Jennifer Coleman of
the Associated Press writes (September 3):

While income for much of the nation
has recovered since the recession of the
early 1990s, more California workers
earn poverty-level wages now than a
decade ago…. A review of state incomes
by the California Budget Project reveals
a growing gap between California and the
rest of the nation, researcher Jean Ross
said. "It is a huge
disparity," Ross said. "For
decades and decades, incomes in
California have exceeded those of the
rest of the nation." That is no
longer the case, she said. Adjusted for
inflation, the median income of a
four-person family in California
declined $1,069 since 1989, while
nationally, that figure rose $2,477,
researchers found…. "We`ve had
tremendous growth in the number of jobs,
but not in wage growth." …

Home prices and other living expenses are
keeping California workers from being able to
prosper as their counterparts in other states
have, said Bob Gnaizda, policy director of the
Greenlining Institute, a San Francisco-based
coalition of community groups. "California
jobs are more dead-end jobs than anywhere
else," Gnaizda said. "Minimum-wage
workers of 20 years ago remain minimum-wage
workers today. You can`t move up." …

When it comes to the widening gap between
rich and poor within the state, California also
bucks the trend the rest of the nation is
seeing, Ross said. In most states, the growing
gap is due to growth at the high end of the
income scale. In California, the gap comes from
an increase in low-income families and
stagnating incomes in the middle class, the
report said. There are no signs the trend is
reversing, Ross said.

(The CBP report is posted at target="_blank" href="http://www.cbp.org">http://www.cbp.org.)

Hmmmm. What could possibly be causing the
number of jobs in California to go up while
wages go down?

If I recall my Econ 101 correctly, the supply
of less-skilled workers must be going up faster
than the demand. How could this happen?

Jennifer Coleman`s AP article doesn`t offer
us a clue. Maybe I can help. The word that`s
utterly missing from the AP analysis is (sshhhhhh,
don`t say it too loudly or you`ll be
Insensitive): immigration.


[Steve Sailer [email
him] is founder of the Human Biodiversity Institute and


movie critic
for


The American Conservative
.
His website


www.iSteve.blogspot.com
features his daily
blog.]

September 16, 2000