PPIC study finds recession shrinking CA’s middle class

The number of Californians living in the relative comfort of the middle class has fallen to a new low after four difficult recessionary years, according to a report released today from the Public Policy Institute of California.

The middle class, defined by the PPIC as families with annual incomes of between $44,000 and $155,000, represented just 47.9 percent of the population by the end of 2010.

The same analysis made in 1980 categorized 60 percent of the state's population as middle class - adjusting for inflation and the state's high cost of living.

The report comes as a national - even international - protest has erupted over economic inequality between the very rich and the rest of society. Closer to home, a number of proposals to impose higher taxes on California's highest earners to the benefit of public schools have been submitted in recent weeks to be put before voters next November.

Although authors of the PPIC report steered clear of making any political observations, no doubt the results from the report will serve as campaign fodder for weeks and months to come.

One finding, for instance, is that the gap between California's upper-income and lower-income families - which has been larger than the rest of the nation for decades - is today twice as large as it was in 1980.

The PPIC report found that today, higher-income families earn $12 for every $1 earned by the lowest income families.

The economic decline of the past four years has also been hardest on the lowest income residents: families at the low end of the spectrum, the 10th percentile - saw their incomes fall 21 percent between 2007 and 2010.

Meanwhile, families at the top end of the scale - the 90th percentile - had to deal with only a drop of 5 percent in income during the same period.

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