California has one of the world’s largest economies, but many working Californians do not feel economically secure—they are struggling to pay bills, absorb financial shocks, save for the future, and balance the demands of work and daily life. Why do so many workers struggle to achieve economic security? We gained insights from statewide economic data and from focus group discussions with financially insecure low- and middle-wage workers from diverse demographic, geographic, and political backgrounds.

Economic Security Feels Out of Reach for Many Workers

Almost half of California’s 12 million prime-age workers earn under $50,000 per year, and a quarter earn less than $100,000. While many of the lower- and middle-income workers in our focus groups are working consistently in jobs that they find satisfying (as do many Californians), they also find themselves in a state of economic insecurity. What are the key issues underlying this challenge today?

The cost of essentials has risen sharply. The cost of basic necessities—which make up a large share of spending by lower- and middle-income workers—has risen substantially since 2020: food and rent are up 25% on average, while home utilities and gas are 40% higher. Lower- and middle-income workers also struggle with out-of-pocket health care costs.

Coping with the cost of living can feel like walking a tightrope. Borrowing money can help cover costs, but many workers feel overwhelmed by the amount of debt they hold; student loan delinquencies in particular are rising. Many workers participate in safety net programs, including food assistance and public health insurance, but some focus group participants said their earnings are slightly too high to qualify; others felt that the process of getting and keeping benefits is too onerous.

Family, health, and other personal needs impact work choices. Many focus group participants have made job decisions that allow them to care for household members or deal with their own health issues. Many have considered work opportunities in lower-cost areas in California and elsewhere but have stayed put because of family and community support—fully understanding that they would continue struggling to make ends meet.

Changing careers or employers carries risk for workers in precarious financial situations. Many workers in our focus groups have considered changing jobs, changing careers, starting businesses, and/or going back to school. Yet few felt confident that they could afford to pursue these strategies or that they would pay off.

Worker Struggles Reflect Recent and Long-term Economic Shifts

Several years of economy-wide uncertainty have compounded the difficulty of making long-term plans. The pandemic shook up California’s labor market, and while the recovery was quick by historical standards, severe inflation has affected both households and businesses.

For most of 2025, employers have been grappling with uncertainty caused by international tariffs, shifting federal investments, and global tensions. Employers are also rethinking their workforce plans amid the development of AI. In this environment, many workers are hesitant to make job changes. Our focus group participants had doubts about whether investing in training would increase their earnings.

Some of the challenges facing California workers have been long in the making. Because economic growth has not been evenly distributed across industries or regions, opportunities have been unevenly distributed across the workforce.

What Can Policymakers Learn from California Workers?

Our focus group participants expressed a deep appreciation for California, but they are clearly engaged in a profound struggle for economic well-being. For them, the challenge feels bigger than it did before the pandemic. These workers might not be able to name specific policy solutions; they simply feel that costs have gotten out of control and have outweighed any wage or other workplace gains they’ve experienced.

There are no easy answers—indeed, California’s leaders have been grappling with cost of living and economic mobility challenges for some time. In the current moment, state policymakers can continue to focus on the costs that weigh most heavily on Californians, as well as improving paths to better pay and helping balance the demands of work and family.

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About the Authors

Sarah Bohn is vice president and director of the PPIC Economic Policy Center and senior fellow at the Public Policy Institute of California, where she holds the John and Louise Bryson chair in policy research. She is also a member of the PPIC Higher Education Center. As the founding director of the PPIC Economic Policy Center, she leads research and engagement to inform California policymaking to support greater opportunity and upward mobility for workers, families, and businesses statewide. A labor economist, her research focuses on the job market, workforce skills, and the role of education and government programs in upward mobility. Her other areas of expertise include immigration policy, poverty measurement, income inequality, and career technical education. Her work has been published in major academic journals, including the American Economic Review, Demography, American Economic Journal: Economic Policy, and The Review of Economics and Statistics. Previously she served as vice president of research at PPIC. She holds a PhD in economics from the University of Maryland, College Park.

Sean Cremin is a research associate at the Public Policy Institute of California where he is a member of the Economic Policy Center. His research focuses on advancing upward mobility, reducing labor market disparities, and expanding socioeconomic opportunities through more equitable and effective economic policymaking. Prior to joining PPIC, he worked as a senior research associate at NORC at the University of Chicago where he supported evaluations of federally funded programs aimed at mitigating poverty and inequality. He holds a master’s degree in public affairs from Princeton University’s School of Public and International Affairs and a BA in politics, philosophy, and economics from Pomona College.

Robert Santillano is an independent researcher focusing on partnerships that improve public well-being—particularly for those experiencing economic insecurity. His interest in this work comes from lived experience with many of the social service programs he studies. He has published research covering child welfare, early childhood education, K–12 education, homelessness, family support, immigration, the safety net, and workforce training topic areas. Prior to starting his firm, he was an economist at Mathematica and also served as research director at the California Policy Lab at UCLA. He received his PhD in agricultural and resource economics from the University of California, Berkeley, and a BA in math from Pomona College.

Tess Thorman is a senior research associate at the Public Policy Institute of California, and a member of both the Safety Net and Economic Policy Center teams. Thorman’s research centers on economic well-being and opportunity in California, with particular attention to the roles of social safety net programs and earnings. Recent work has examined food assistance and state tax credits for low-income families, characteristics of California’s workforce, and trends in income inequality in California. Thorman holds an MPP from the University of Southern California and a BA with majors in English and musical studies from Oberlin College.

Mark Baldassare is survey director at the Public Policy Institute of California, where he holds the Arjay and Frances Fearing Miller Chair in Public Policy. From 2007 to 2022, he also served as president and CEO of PPIC. Prior to that, he served as PPIC’s director of research. He is a leading expert on public opinion and survey methodology and has directed the PPIC Statewide Survey since 1998. He is an authority on elections, voter behavior, and political and fiscal reform, authoring ten books and numerous reports on these topics. He often provides testimony before legislative committees and state commissions. Before joining PPIC, he was a professor of urban and regional planning at the University of California, Irvine, where he held the Johnson Chair in Civic Governance. He has conducted surveys for the Los Angeles Times, the San Francisco Chronicle, and the California Business Roundtable. He holds a PhD in sociology from the University of California, Berkeley.

Mary Severance is a senior editor at the Public Policy Institute of California. She edits and helps develop publications and briefings so that they are accessible to their audiences. She also writes copy for the PPIC website and for institutional publications. Before she joined PPIC in 2008 as the institute’s production editor, she was a senior project editor at University of California Press. She has also worked as a copyeditor and college English instructor. She holds an MA and PhD in English from the State University of New York, Buffalo, and a BA in English from Carleton College.