California: Privately Rich in Big Cities, Publicly Broke
|There's plenty of money in the state. Just not in the public sector.|
San Jose took the top spot, with a median income of $76,593, and San Francisco came in second at $69,894.
Of course, people who consume newspaper headlines may notice a strange contradiction here. There was another report released on Thursday. As the New York Times wrote, that one, from the State Budget Crisis Task Force, showed that California's public debt sitting somewhere between $167 billion and $335 billion, ridiculously higher than the $28 billion Gov. Jerry Brown estimated when he took office last year.
There may not be a better example of the disconnect between private sector success and public sector struggles than the Golden State.
See also: Bay Area Poverty Is Growing Faster in Suburbia Than in Urban Areas
Thursday was a big day for economic reports. Because a third report released yesterday -- this one from the Senate Permanent Subcommittee on Investigations -- partially explains one of the (many) causes for that disconnect. As the Chronicle's front page read: "Silicon Valley multinationals aggressively exploit foreign tax havens in Bermuda, Grand Cayman and elsewhere to dodge U.S. taxes, according to a bipartisan Senate report."
This isn't too surprising. Throughout the Great Recession, we've all seen the data illustrating how the incomes of the top earners recovered quickly, while the incomes of the majority continued to slide or stagnate. As U.C. Berkley economist Emmanuel Saez calculated in his March paper, "the top 1 percent [of earners] captured 93 percent of the income gains in the first year of recovery."
Between 2005 and 2010, San Francisco's poverty rate rose 1.7 percent while the city's median income level increased by around $4,400. By the Census' official figures, 13.8 percent of San Franciscans lived below the poverty line in 2010, which is set at $22,811 per household. Given the city's standard of living, though, it should also be noted that 22.1 percent of household here earned less than $35,000.
The state's private sector success comes with a serious caveat. California did have a strong showing on the wealthiest cities list -- San Diego ranked No. 4 and Los Angeles finished in the top 15, too. But the state also had three of the five poorest cities in America: Fresno, Modesto, and Bakersfield. In Fresno, more than 25 percent of the population lives below the poverty line, the second-highest rate in the county. One in six residents there are unemployed. Overall, California's poverty rate is 16.6 percent.
And this is where that state budget crisis really hurts.