What’s behind the economic pessimism

We live in a state of two realities.

One reality is people economically well off. They’re either working at jobs that pay enough to afford crazily high real estate prices, or living with investment and retirement income that insulates them from the daily worries of Californians living in the other reality.

This first group is usually vaccinated against COVID-19, many are college educated, and live along the coast in places like Santa Cruz County.

The other California, usually non white and living away from the coast, increasingly sees the gap between the rich and poor growing and their prospects at landing a good job or an affordable home getting more remote by the day.

A recent statewide survey by a nonpartisan think tank, the Public Policy Institute of California, found that seven in 10 Californians say the gap between rich and poor is getting larger; many feel it will be worse for their children than for them.

In other words, too many Californians are losing hope.

Survey results, though, vary by region.

Half the residents in the

San Francisco Bay Area, for instance, remain optimistic, while a majority in the Central Valley are pessimistic.

What explains this gloomy outlook?

It starts with 20 months of a pandemic that has led to many people leaving the work force. California lost more than 2 million jobs during the recession spawned by COVID-19 shutdown orders and has struggled to return to pre-pandemic levels of employment. These figures, and the PPIC survey, should sound a loud warning that too many Californians are falling too far behind economically and that unaddressed, even the well off will bear the resulting costs.

California now is tied with Nevada for the highest unemployment rate in the country at 7.5%, about 50% higher than the national rate. Slightly more than 19 million Californians were in the labor force; 17.6 million were employed and 1.4 million were considered jobless.

Here, too, there are disparities. Santa Cruz County’s unemployment rate in September was 5.4%. Slightly more than 134,000 county resident were considered to be in the work force; about 127,000 were employed and 7,000 not.

But the unemployment numbers, while somewhat dismal, don’t tell the entire story. The unemployment report, compiled by the U.S. Bureau of Labor Statistics, doesn’t count the half-million or so Californians who have left the labor force during the past 20 months and who remain unemployed.

A deeper dive into these figures also counts unemployed workers, part-time workers who want to work full time and some who remain undecided about returning to work. According to analysts, taking these people into account, about 14% of Californians are not fully employed.

They also explain why about 16% of Californians say they or someone in their household has received food from a food bank in the past year – and

27% received unemployment benefits.

According to the PPIC poll, more than one in four Californians say they or someone in their household has had their work hours reduced or their pay cut. Almost half have worked from home.

About one in six Californians say they are worse off than a year ago, while about one in five say they are better off.

But those who aren’t, or who say they worry daily about the cost of housing and gasoline, saving for retirement, or rising health-care costs, are, according to the poll, seriously considering moving out of the state.

By including living costs in its calculations, the U.S. Census Bureau sets California’s poverty rate at 17.2%, also the highest in the nation. The PPIC reports that about a third of all Californians are feeling severe stress – about the same percentage of the state’s 40 million residents enrolled in MediCal, California’s medical insurance program for the poor.

The PPIC survey not surprisingly shows an overwhelming majority of Californians support expanding government safety-net programs, including a permanent extension of the child tax credit, more government funding for job training programs and child care, and government policies to make public college tuition-free and that would eliminate college debt.