SAN FRANCISCO, Dec 8 (Reuters) - Just under half of
California families were middle income in 2010, a new low
reflecting the effects of high levels of unemployment and
underemployment in recent years on a state whose middle-class
was already shrinking, a report released on Thursday said.
"By 2010, just less than a majority - 49.7 percent - of
California's families could be considered middle income,
compared to 54.9 percent in the rest of the country," the report
by the Public Policy Institute of California said.
That level was down substantially from 1980, when a 30-year
high of 60 percent of California families were middle income.
The decline underscores just how hard the recent recession
struck the most populous U.S. state and amplified income trends
chipping away at its middle-class over the past three decades.
Over that time, California's high-income households posted
substantial income gains while low-income households saw small
income losses, which widened the state's wealth divide faster
than in the rest of the nation just as fewer and fewer families
in the state fell in the middle-class.
"The Great Recession exacerbated these trends," the report
said, noting they gained added fuel in recent years from the
loss of full-time jobs - California's unemployment rate was 11.7
percent in October - and from fewer hours worked than from
Compared with the 49.7 percent of families in California in
2010 that were middle income, 36.6 percent of families in the
state were low income and 13.7 percent were considered high
At the national level last year, 55 percent of families were
considered middle income, 33 percent low income and 12 percent
The report defined low income as income at or less than two
times the federal poverty level for families, or $44,200 and
below. It defined middle income as income between two and seven
times the federal poverty level, or $44,200 to $154,800. High
income was defined as any family income above $154,800.
California's income distribution also reflects that its
high-income families have been able to withstand the recession
much better than middle- and low-income families, suggesting the
state's income gap between its top and bottom ends will remain
large for some time to come.
"If previous recovery patterns repeat themselves, it is
likely that the lower half of the income distribution will
recover much more slowly than the upper half, potentially
allowing already record-high income inequality to persist," the
The UCLA Anderson Forecast economic unit said on Wednesday
that a nascent economic recovery is under way in California but
its expected job gains will not be strong enough to lower the
state's unemployment rate to single digits until 2014.
(Reporting by Jim Christie; Editing by Kenneth Barry)
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