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California Under the Democrats: Massive Poverty

Written by Gary North on October 7, 2013

California’s poverty rate is now 24%. Nationally, it is 16%. This places California close to the bottom: #47.

One-third of the welfare recipients in the United States live in California.

As for inequality, there is no state more unequal in terms of wealth distribution. Silicon Valley is rich. Most of the state is not.

Joel Kotkin, one of the most respected analysts of urban life, has written a report on this. He says the middle class is now a minority in California. In the 1980s, 60% were middle class.

The state has 90 billionaires. New York has 70. Texas has 45. They skew the state’s wealth.

Silicon Valley’s wealth reflects the fortunes of a handful of companies that dominate an information economy that itself is increasingly oligopolistic. In contrast to the traditionally conservative or libertarian ethos of the entrepreneurial class, the oligarchy is increasingly allied with the nominally populist Democratic Party and its regulatory agenda. Along with the public sector, Hollywood, and their media claque, they present California as “the spiritual inspiration” for modern “progressives” across the country.

The problem is regulation. It is expensive to start a business. But this is where job-creation has always been under capitalism.

California is down 500,000 jobs since 2008. Texas has gained over 900,000.

California’s tech manufacturing sector has shrunk, and those employed in Silicon Valley are increasingly well-compensated programmers, engineers and marketers. There has been little growth in good-paying blue collar or even middle management jobs. Since 2001 state production of “middle skill” jobs—those that generally require two years of training after high-school—have grown roughly half as quickly as the national average and one-tenth as fast as similar jobs in arch-rival Texas.

“The job creation has changed,” says Leslie Parks, a long-time San Jose economic development official. “We used to be the whole food chain and create all sorts of middle class jobs. Now, increasingly, we don’t design the future—we just think about it. That makes some people rich, but not many.”

Taxes are high. Regulation is high. “Green energy” is high. So, poverty is high.

Once you get outside the Bay Area, unemployment in many of the state’s largest counties—Sacramento, Los Angeles, Riverside, San Bernardino, Fresno, and Oakland—soars into the double digits. Indeed, among the 20 American cities with the highest unemployment rates, a remarkable 11 are in California, led by Merced’s mind-boggling 22 percent rate.

Los Angeles is #3 among the United States 51 largest cities when it comes to inequality. San Francisco is #7.

The gap between the oligarchic class and everyone else seems increasingly permanent. A critical component of assuring class mobility, California’s once widely admired public schools were recently ranked near the absolute bottom in the country. Think about this: despite the state’s huge tech sector, California eighth graders scored 47th out of the 51 states in science testing.

Housing is unaffordable. In the United States, these four cities are at the top of the list of unaffordable housing: San Jose, San Francisco, San Diego, and Los Angeles.

This is a far cry from the 50s and 60s, when California abounded in new owner-occupied single family homes. Historian Sam Bass Warner suggested that this constituted “the glory of Los Angeles and an expression of its design for living.” Yet today the L.A. home ownership rate, like that of New York, stands at about half the national average of 65 percent. . . .

This feudalizing trend is likely to worsen due to draconian land regulations that will put the remaining stock of single family houses ever further out of reach, something that seems related to a reduction in child-bearing in the state. As the “Ozzie and Harriet” model erodes, many Californians end up as modern day land serfs, renting and paying someone else’s mortgage. If they seek to start a family, their tendency is to look elsewhere, ironically even in places such as Oklahoma and Texas, places that once sent eager migrants to the Golden State.

He says that the billionaires are part of a new oligarchy. They are supported by what he calls the clerisy: professors, media, and government employees. The serfs are those who do not own real estate. The working class now represents the migrants who leave the state.

The Yeomanry: In neo-feudalist California, the biggest losers tend to be the old private sector middle class. This includes largely small business owners, professionals, and skilled workers in traditional industries most targeted by regulatory shifts and higher taxes. Once catered to by both parties, the yeomanry have become increasingly irrelevant as California has evolved into a one-party state where the ruling Democrats have achieved a potentially permanent, sizable majority consisting largely of the clerisy and the serf class, and funded by the oligarchs. Unable to influence government and largely disdained by the clerisy, these middle income Californians are becoming a permanent outsider group, much like the old Third Estate in early medieval times, forced to pay ever higher taxes as well as soaring utility bills and required to follow regulations imposed by people who often have little use for their “middle class” suburban values.

In early June of 1958, I sat in the California state Capitol building, along with 800 other Boys State attendees, to listen to Edmund G. “Pat” Brown, the Attorney General, give a mercifully brief oration. He was elected governor that November. He served for eight years. His son Jerry was elected governor in 1974. (I decided to leave the state in 1975.) He was once again elected governor in 2010. He is a classic career politician. Wikipedia reports:

Edmund Gerald “Jerry” Brown, Jr. (born April 7, 1938) is an American politician who has been the 39th Governor of California since 2011; he previously served as California’s 34th Governor from 1975 to 1983. Both before and after his original two terms as Governor, Brown served in numerous state, local, and party positions. He was a member of the Los Angeles Community College District Board of Trustees (1969–1971), Secretary of State of California (1971–1975), chairman of the California Democratic Party (1989–1991), Mayor of Oakland (1999–2007) and Attorney General of California (2007–2011).

That family dynasty oversaw the creation of the new California. It is the welfare state incarnate. The big winners are the oligarchs.

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5 thoughts on “California Under the Democrats: Massive Poverty

  1. But alas, don't worry. Texas State Senator Wendy Davis, a Democrat who represents a portion of Dallas-Fort Worth, is out to change all that in her bid for the Governor's mansion in Austin. The Leftist Battleground Texas already has Boots on the ground to poison the well of Attorney General Abbott. Nothing would please these scumbags more than to turn a great job-producing entity into a Blue-State Marxist nightmare.

  2. I gotta interject this, Gary: Having lived overseas for several years in places where there is REAL poverty, I always snort when I read articles about American-defined "poverty". I guarantee you haven't seen poverty until you've been to places where most of the men are gone–gone to other countries where they can work for 300 bucks a month, rather than the $10-20 they would make at home. IF they could find a job. And IF, when they got one, the employer would actually pay them! That's poverty. We Americans don't even have the concept.

    BTW, before you say, But we're AMERICANS, we shouldn't have to live like that–I guarantee you, these are real, live, intelligent human beings too. What do we deserve that they don't? The fact of the matter is, we've been incredibly blessed. These people living in "poverty" in California, many of whom are Mexican immigrants, are living at a much, much higher standard than they did back home. That's why they're here! You think they'd give up all that's familiar to go live in a strange culture just for kicks? It takes overwhelming economic incentive to get a person to do that. Our "poverty" is their huge incentive! That's my rant for today. 🙂

  3. HS teacher says:

    Also, much of this statistical poverty is because of a very high rate of young, unmarried mothers

    The "boyfriend's" income is not mentioned

    so the household in most cases has about twice as much as the surveys think they do

    the young girls call the boyfriend the child's "uncle" to keep up the charade

    and to get all the single mom bennies

    When in reality, they have a live-in wage earner, they just do not marry

  4. You are quite correct. I once had a client who had formerly been a social worker in New Orleans. One of his cases was a young "single" mother who was very married. She got the equivalent of full chlld support from the state. When she and her husband went to work, they would drop the child off at Granny's house (which was the mom's registerd address with the state. Whenever social workers came out, there was Granny, taking care of the child while single mom worked. Mom would ride the bus back to Granny's house, and her husband would collect her and the baby, and they would go back to their two parent home together. The social worker told her that this was wrong, but she insisted, "This is the way everybody does it." When the government announces "free money for teh poor," you'd be amazed at how many people suddenly become poor.

  5. Remember than the poor in this country have a better standard of living than 90% of the worlds population.