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Sunday, March 3, 2013

California Bad-Dreaming

Conn Carroll writes at The Washington Examiner that California is becoming "a near-feudal society" with affluent people living on the coasts, and poorer people living inland.
According to a 2012 University of Southern California study on state demographics, you have to go back to the early 1990s to find a time when more Americans were moving to California than leaving it for other states. Thanks to high housing prices and a weak job market, California is now a net exporter of U.S. citizens to other states.

As a result of this shift, native Californians became a majority of the state's population only in the last decade. Their numbers will continue to rise. And since foreign immigration is also expected to level off, the report predicts growth will occur "almost all among native Californians, many but not all of whom are the children of immigrants."

Unfortunately for California, this local-born population is not increasing fast enough to replace the disappearing immigration. The number of Californians under age 18 will virtually halt over the next 20 years, while population growth among those 65 and older will quadruple. The current ratio of one senior for every five working-age residents will become a 3-to-10 ratio by 2020, and 4-to-10 by 2030.

If California's new native-born population was particularly wealthy or well-educated, this demographic imbalance might not be such a big problem. But it is not. And this will severely strain California's generous welfare state.

Even before the Great Recession, California already suffered from some of the highest levels of income inequality in the nation. And according to recent Public Policy Institute of California study, the recent downturn only exacerbated the problem. "Compared to the rest of the country, California experienced larger declines in income at the bottom of the distribution and smaller declines at the top -- leading to the largest gap between upper and lower incomes in at least 30 years," PPIC reported.