California's worst recession since the Great Depression has hit all economic classes, but has had a particularly harsh effect on those in the lower income brackets and has exacerbated the state's socioeconomic polarization, a new study by the Public Policy Institute of California determined.
One result has been that the ranks of the economic middle class have thinned to less than half of the state's population, PPIC found.
"Unemployment and underemployment are the hallmarks of the Great Recession," Sarah Bohn, who co-authored a report with Eric Schiff, said in a statement accompanying its release. "This suggests that policies that create jobs and promote full-time employment - rather than those that target wage rates - are more likely to be effective in raising family income to pre-recession levels."
That conclusion provides fodder for California's ongoing political debate over what, if anything, the state's political policymakers could do to hasten recovery and make a dent in what remains the nation's second highest unemployment rate, just under 12 percent with more than 2 million workers on the jobless rolls.
"The gap between upper- and lower-income families is now wider than ever," the PPIC report said, "and the number of families in the middle-income range is shrinking." Among the specific findings:
-- Total income for the median California family fell more than 5 percent between 2007 and 2009 (the official recession years) and an additional 6 percent between 2009 and 2010, in inflation-adjusted dollar terms, from $68,400 in 2007 to $61,100 in 2010.
-- At the 10th income percentile (the lowest), total family income fell more than 21 percent between 2007 and 2010, whereas at the 90th percentile, family income fell 5 percent and the income drop at the 95th percentile (the highest) was actually higher, 8.1 percent.
-- Fewer than half - 47.9 percent - of Californians now live in what are considered to be middle-income families.
-- Median family income declined in every one of California's regions between 2007 and 2010 with the single exception of San Diego. The Central Coast had the steepest decline at 18 percent, followed by the Sacramento and San Joaquin regions, at 16 percent each.