Wage Gap Widening: Rich Getting Richer, Poor Getting Poorer

Hardworking Californians are struggling to keep up, let alone get ahead in an economy that has an increasing divide between those at the highest income level and those at the lowest. The middle class is simply disappearing. The California Budget Project has issued a new report that they released today called "A Generation of Widening Inequality: The State of Working California, 1979 to 2006".

Today, the gap between the earnings of California's low-wage and high-wage workers is greater than it was a generation ago, reflecting a sharp decline in the purchasing power of high-wage workers' hourly earnings. Meanwhile, the hourly wage of the typical worker- the work eactly at the middle of earnings distribution- has barely kept pace with inflation. The gap between low-wage and high-wage workers has widened to a greater extent in California than the nation as a whole because the states low-wage workers have fared worse than their US counterparts, wile the state's high-wage workers have fared better.

Workers at the bottom pay range dropped 7.2%, while the rich saw their pay go up 18.4% during the time period studied. The most likely wages for jobs added in the next decade "will pay either quite well or relatively little", at either about $83,000/year or $21,000/year. LAT:

The findings underscore "the extent to which inequality in California exists," said Jean Ross, executive director of the Budget Project, which focuses its research on matters that affect low- and middle-income households. "A significant fraction of the California workforce is falling behind."

Most of the new jobs that have been generated in recent years have been for engineers, executives, lawyers and scientists at the highest tier -- paying more than $22 an hour in 2006 dollars -- and for store clerks, cashiers, nurses' aides and farmworkers at the lowest tier, paying less than $11 an hour, the report said.

In fact, from 1999 to 2005, according to the report, 43% of new jobs paid less than $11 an hour.

It's not just wages, people are working harder and getting less benefits.

But many findings weren't upbeat. To stay financially afloat, many Californians have had to work harder and longer while receiving fewer benefits from their employers, the report said. And despite the economic recovery that began after the recession ended earlier this decade, advantages that some workers might have expected to "trickle down" never did.

"Typically, such trends provide ripe conditions for broad-based increases in living standards," the report said. Instead, soaring productivity gains led to "skyrocketing corporate profits."

The good news in the report was spotty: the value of a college degree has gone up and the disparity between women and men has gone down. Wages for Asian Americans have gone up, but Latinos have lost ground. The average Latino now earns 58 cents for every dollar a white worker makes, down from 71 cents in 1979.