Golden State ideal — real or just a notion?

A look at the promises and the reality of what we have, how we live

There’s no standard definition of the California dream. If you could ask the 39 million current Californians about the dream, aside from most agreeing that the daily temperature should not dip lower than the mid-50s, you likely would get 39 million different answers.

But the so-called “Golden Era” of California — that faded Technicolor image of a magical time in the 1960s when, as soon as you crossed the state line, Ronald Reagan would hand-deliver you a two-story house, 2.5 children and tiki-themed patio furniture — still seeps into our expectations.

But reality could not be further from that stereotype.

Beginning today and with a series of stories over the coming month, the nonprofit CALMatters — in partnership with news organizations around the state — will examine the decades-old promise and current-day reality of the California dream. Does it still exist? What kind of life does it really offer? And for whom?

As a pivotal election nears, the answers to those questions will shape life decisions about where to live, about raising our families and about choosing our careers.

Many residents believe

achieving the California dream is harder than it used to be. A recent USC Dornsife/Los Angeles Times poll found that only 17 percent of Californians believe the state’s current generation is doing better than previous ones. More than 50 percent thought Californians 18-30 years old were doing worse. They’re not wrong. Over the past four decades, California middleclass incomes have stagnated, according to a recent study by the Stanford economist Raj Chett.

The median California family made about $68,000 in 1980 in today’s dollars. More than 30 years later, that average family has seen its income rise only $5,000.

At the same time, the state’s cost of living has exploded. A house that 50 years ago cost about three times a younger California household’s salary now costs seven times what a younger household earns, according to a CALmatters analysis of census and real estate data provided by the California Association of Realtors.

If the past half-century has been rough for middleincome Californians, it’s been brutal for those lower on the income ladder. Starting in the late 1970s, California’s

poverty rate crept higher than the national average. Now, when cost of living is factored in, we’re the poorest state in the country.

The California dream seems to be slipping away for many Californians.

The dream of being middle class

When was the best time to be a middle-class Californian?

Well, the late 1960s and 70s were pretty good years, as median family incomes rose steadily over that period. By 1980 the average household was making 20 percent more than in 1967.

But starting in 1980, incomes for middle-class Californians stagnated. By 2014, the average California family, after adjusting for inflation, was making only 8 percent more than it made three decades earlier. While earnings have ticked up since, the recessions of the early 1990s and late 2000s essentially wiped out entire decades of modest income gains, according to a study by the Public Policy Institute of California.

“The starkest comparison is between families at the middle and less than the middle with those at the very top,” said Sarah Bohn, research fellow at the Public Policy Institute of California. “We’ve all experienced booms and busts through economic cycles, but over time the highest-income

families in the state have really seen a larger growth in their opportunities relative to their middle families.”

That story is by no means unique to California. But it is worse here than in the rest of the country.

Incomes for the median U.S. family grew 20 percent over the past 30 years, a much faster clip than in California.

“When you think about what it took to make ends meet in 1967, it’s very different from what it takes to make ends meet today,” said Bohn, who specializes in income inequality trends. “Housing, child care expenses with both parents working, medical out-of-pocket expenses, not to mention other things that are necessities that didn’t even exist in the ’60s that you really need today.”

The dream of your children doing better

Part of the allure of California has always been the possibility of you or your children making it to the “1 percent,” whether via the Gold Rush, Hollywood or Silicon Valley. Here, the top-earning households continue to do better than just about anywhere else in the country.

But the promise of a better future for the 99 percent has dimmed, giving way to a disconcerting trend: the inability of younger households

to do better than their parents.

Fewer than half of California children born in 1980 were earning more at age 30 than their parents did at that age. It was the first time the proportion slipped below 50 percent since the 1940s, according to Stanford economist Raj Chetty.

The dream of owning a home

Part of the California dream has always been homeownership. But it has become increasingly unattainable.

“I am very nervous that we are at a point where absent an economic downturn that kind of forces prices to drop, that we are really in an unsustainable situation,” says Carol Galante, director of the Terner Center for Housing Innovation at UC Berkeley. “The lack of ability to save for a downpayment, it’s just becoming unsustainable.”

In 1969, the median sales price of a California house was about $166,000 in today’s dollars. That was about three times the average income of younger California families at the time who might be in the market for a starter home.

Today, the median California house price of just over $500,000 is seven times what the average younger household makes. In the Bay Area, where the median price was $765,000 in December, the ratio is even larger. Overall, the house price to income ratio is the worst it has ever been.

The dream of escaping poverty

While middle incomes have stagnated in California over the past four decades, lower-income households have actually seen their earnings drop.

When you factor in the cost of living, California now has the highest poverty rate in the country at $30,000 for a family of four, the PPIC reports. We’re worse than states such as Mississippi and Alabama. Roughly one in five Californians now struggle to make ends meet.

On many fronts, the California dream is vanishing. But Californians remain loyal.

The USC Dornslife/Los Angeles Times poll asked the respondents whether they would “rather live in California than anywhere else.”

70 percent said yes.