Report: Income gap widens in California

November 7, 2011 12:00:00 AM PST
There's a report out that offers new fuel for the "Occupy" movement. It shows that a third of increase in California incomes over the past 25 years has gone to the wealthiest one percent.

The state's poor lost financial ground in recent decades -- that's the conclusion of a new report by the California Budget Project, a group trying to improve the lives of low-income families. Between 1987 and 2009, researchers say more than a third of Californians' income gains went to just the wealthiest 1 percent, widening the income gap.

"We found that the average Californian in the top 1 percent could earn in less than eight work days what the average middle-income Californian could earn in a year," said Alissa Anderson from the California Budget Project.

The report found the inflation-adjusted average income for California's top 1 percent in 2009 was $1.2 million a year. The middle 20 percent earned just $35,000.

The findings give the Occupy movement more ammunition for their cause. The income of the wealthiest 1 percent versus everyone else has been a rallying point.

"When we finally have something like this, this is what's helping us, and this is why we are helping the people," said Sean Thompson from "Occupy Sacramento."

But defenders say, being in the richest one percent, doesn't make somebody a bad person, most of them are the ones creating jobs. Lew Uhler points to Silicon Valley, particularly Apple co-founder Steve Jobs.

"The fact that he may have become a billionaire is incidental to the jobs he created and the wealth that he's created for this nation and the world," said Uhler from the National Tax Limitation Committee.

The study did note that two California cities had virtually no income disparities: Norwalk in Los Angeles County and the Sacramento suburb of Elk Grove.

Two middle class cities are hardly enough, though, to reverse the widening income gap that some studies suggest could undermine economic growth if it continues.

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