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Most Think California Children Will Be Worse Off than Their Parents; Two-Thirds See Income Inequality Widening

MANY LOWER-INCOME HOUSEHOLDS HAD HOURS OR PAY REDUCED, LESS FOOD IN LAST YEAR

SAN FRANCISCO, December 9, 2020—A solid majority of Californians say children growing up in the state today will be worse off financially than their parents, while more than two-thirds say the gap between rich and poor is widening. In the past year, more than four in ten households with annual incomes below $40,000 had work hours or pay reduced, and an equal share had to cut back on food. With COVID-19 cases and hospitalizations again rising, the pandemic continues to disproportionately affect lower-income households and Latinos. These are among the key findings of a statewide survey released today by the Public Policy Institute of California.

Six in ten Californians (63%) think that when children in California today grow up they will be worse off financially than their parents; about a third (35%) say better off. Majorities of whites (76%), Asian Americans (67%), and African Americans (62%), and nearly half of Latinos (47%), say California children will be worse off than their parents. Most across income groups say this, including 73% of those with annual incomes of $80,000 or more (58% $40,000 to under $80,000, 54% under $40,000).

“Majorities of Californians across income groups think that children growing up in California today will be worse off financially than their parents,” said Mark Baldassare, PPIC president and CEO.

A strong majority (69%) say the gap between rich and poor in their part of the state is getting wider, 6 percent say the gap is narrowing, and 25 percent say it has stayed the same. Majorities across income, age, and racial/ethnic groups and across regions believe the gap is getting larger.

Thinking nationally, Californians link racial and ethnic discrimination with economic disparity. An overwhelming majority (83%) say racism is a problem in the US, and about seven in ten say racial and ethnic discrimination contributes a great deal (34%) or a fair amount (38%) to economic inequality. African Americans (63%) are far more likely than other groups to say racial and ethnic discrimination contributes a great deal to inequality (36% Latinos, 32% Asian Americans, 29% whites).

“Overwhelming majorities of Californians, including nine in ten African Americans, say that racial and ethnic discrimination contributes to economic inequality in the US,” Baldassare said.

COVID-19 Continues to Have an Outsized Effect on Californians with Lower Incomes and on Latino Households

With coronavirus cases and hospitalizations surging again this fall, about three in four Californians are either very (31%) or somewhat (41%) worried that someone in their family will get sick from the virus, similar to responses in April and July (77% either very or somewhat worried). Today, lower-income adults are slightly more likely to be very worried about illness (40% incomes under $40,000, 34% $40,000 to under $80,000, 24% $80,000 or more). Latinos (44%) are much more likely than Asian Americans (31%), African Americans (23%), and whites (21%) to be very worried about illness.

About two in three Californians are very (27%) or somewhat (38%) worried COVID-19 will hurt their family’s finances. Similar shares were very or somewhat worried about financial impacts in April (75%) and July (71%). Today, lower-income Californians are somewhat more likely to be very worried (38% incomes under $40,000, 32% $40,000 to under $80,000, 18% $80,000 or more). Latinos (39%) are much more likely than Asian Americans (26%), African Americans (24%), and whites (19%) to be very worried.

“The pandemic is continuing to have a disproportionate impact on Californians with lower incomes and on Latino households,” Baldassare said.

Many Lower-Income Families Faced Reduced Work Hours or Pay, Cut Back on Food, or Had Other Challenges in the Last Year

Many lower-income households faced a range of economic challenges in the last 12 months. Among households with incomes under $40,000, 43 percent had someone in their household with reduced work hours or pay (42% $40,000 to under $80,000, 36% $80,000 or more). In addition, 42 percent cut back on food to save money (27% $40,000 to under $80,000, 12% $80,000 or more).

“More than four in ten lower-income Californians report their work hours or pay reduced. A similar share cut back on food in the last 12 months,” Baldassare said.

One-third or more of lower-income households report receiving unemployment (36%), not being able to pay a monthly bill (36%), having difficulty paying rent or mortgage (35%), or being laid off (35%) in the past year. Similar shares report using a food bank (43%) and receiving food stamps (38%).

Most Lower-Income Households Would Have Difficulty Affording a $1,000 Emergency Expense; Less than Half Have Key Job Benefits

Seven in ten Californians live comfortably (31%) or can meet basic expenses with a little left over (41%). Those making under $40,000 are much less likely to say they live comfortably (9%) than those making $40,000 to under $80,000 (23%) and $80,000 or more (49%). Most Californians (55%) say it would be not too difficult to cover a $1,000 emergency expense, but that share is lower among lower-income households. Among those making under $40,000, 23 percent say it would be not too difficult to cover a $1,000 emergency expense (48% $40,000 to under $80,000, 79% $80,000 or more).

“Lower-income Californians are less likely to say their household finances are comfortable and that it would be not too difficult to pay an emergency expense,” Baldassare said.

Most employed Californians (82%)—including those earning less than $40,000 (79%)—are satisfied with their jobs, but lower-income workers are less likely to have key job benefits. Among workers making under $40,000, 59 percent have paid sick leave (81% $40,000 to under $80,000, 84% $80,000 or more); 48 percent get health coverage (73% $40,000 to under $80,000, 84% $80,000 or more); 40 percent get retirement savings (59% $40,000 to under $80,000, 76% $80,000 or more); and 33 percent get educational or training assistance (51% $40,000 to under $80,000, 60% $80,000 or more).

“Less than half of lower-income workers report having a job that offers them health care, retirement savings, and education or training,” Baldassare said.

Most Californians Are Pessimistic about the State’s Economic Outlook

Californians have an unfavorable outlook for the state’s economy in the next year and beyond. Three in ten (31% adults, 30% likely voters) expect good times financially for California in the next 12 months. Less than half (40% adults, 41% likely voters) expect good times during the next five years, while majorities (59% adults, 58% likely voters) expect periods of widespread unemployment or depression.

More than eight in ten Californians say the availability of well-paying jobs is a big problem (27% adults, 28% likely voters) or somewhat of a problem (61% adults, 60% likely voters) in their part of the state. In addition, nearly one in three (32%) say the lack of well-paying jobs is making them seriously consider moving—26 percent out of California, and 6 percent elsewhere in the state.

“Californians have a gloomy economic outlook, and one in four are seriously considering leaving California due to a lack of well-paying jobs in their region,” Baldassare said.

Despite this pessimism, most approve (58% adults, 59% likely voters) of how Governor Newsom is handling the economy. An overwhelming majority of Democrats approve (85%), while 54 percent of independents and 14 percent of Republicans approve. Majorities across income groups approve.

“Majorities of Californians across income groups approve of Governor Newsom’s handling of jobs and the economy, while Democrats and Republicans are divided,” Baldassare said.

Among Several Policy Proposals to Boost Economic Well-Being, Increased Funding for Job Training Has the Most Support

Asked about a number of policy proposals to improve economic well-being, Californians expressed the most support for increasing public funding for job training programs so that more workers have the skills needed for today’s jobs. More than eight in ten Californians (83% adults, 82% likely voters) support increased government funding for job training, with 93 percent of Democrats, 86 percent of independents, and 63 percent of Republicans approving. Across racial/ethnic groups, 90 percent of African Americans, 87 percent of Asian Americans, 85 percent of Latinos, and 80 percent of whites support increased funding for job training, as do most across regions (88% Los Angeles, 87% Inland Empire, 87% San Francisco Bay Area, 79% Orange/San Diego, 78% Central Valley).

“Overwhelming majorities of Californians across political, racial/ethnic, and regional groups are in favor of increasing government funding for job training programs,” Baldassare said.

Other proposals to increase economic well-being also have the support of most Californians. These include increased funding for child care serving lower-income working parents (78% adults, 76% likely voters), a government health insurance plan similar to Medicare (77% adults, 75% likely voters), expanding the Earned Income Tax Credit (73% adults, 72% likely voters), free college tuition (66% adults, 59% likely voters), and eliminating college debt (65% adults, 60% likely voters). Fewer support the federal government providing a guaranteed income, sometimes called “universal basic income” (50% of adults, 43% of likely voters).

Most Value Worker Organizing and Believe in the Importance of Voting

Three in ten employed Californians (29%) say their workplace offers membership in or affiliation with a union, occupation association, worker center, or other group representing workers. Overwhelming majorities of Californians (78% adults, 78% likely voters) say it is important for workers to organize. This view is held by majorities across parties, regions, and income and racial/ethnic groups.

Overwhelming majorities (83% adults, 90% likely voters) say voting gives people like them a say in what government does. This includes majorities across racial/ethnic groups—with Asian Americans (94%) the most likely and whites (77%) the least likely to hold this view—as well as across income groups and regions.

“Solid majorities across demographic, political, and regional groups say it is important for workers to organize,” Baldassare said. “Solid majorities also say voting gives people like them a say in government.”

About the Survey

The Californians and Their Economic Well-Being survey is supported with funding from the James Irvine Foundation.

The findings presented above are based on responses from 2,325 California adult residents, which includes an oversample of Californians with incomes less than $40,000. There is a total of 1,001 lower-income Californians in the survey. The sampling error is ±3.1 percent for the total unweighted sample and ±5 for the oversample of 1,001 lower-income Californians. Interviewing took place from November 4–23, 2020. For more information on methodology, see page 22.

Mark Baldassare is president and CEO of PPIC, where he holds the Arjay and Frances Fearing Miller Chair in Public Policy. He is founder of the PPIC Statewide Survey, which he has directed since 1998.

The Public Policy Institute of California is dedicated to informing and improving public policy in California through independent, objective, nonpartisan research. We are a public charity. We do not take or support positions on any ballot measure or on any local, state, or federal legislation, nor do we endorse, support, or oppose any political parties or candidates for public office. Research publications reflect the views of the authors and do not necessarily reflect the views of our funders or of the staff, officers, advisory councils, or board of directors of the Public Policy Institute of California.

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