UC Berkeley News
Press Release

UC Berkeley Press Release

North Bay study shows growing income gap, more working poor

– University of California, Berkeley, researchers who examined the North Bay economy of the 1990s found a widening income gap between middle- and low-income working families and the wealthy, and a growing number of working poor - particularly among Latinos, according to a just-released study.

The researchers said what they found in the North Bay counties of Marin, Sonoma, Napa and Mendocino reflects similar disturbing trends throughout much of urban California. Their report warns that growth alone is not enough to guarantee sustainable economic development and a regional quality of life not threatened by traffic congestion, longer commutes and deteriorating social cohesion.

"What this proves is that even a growing economy will not raise the level for everyone if those at the bottom have no lifeboats under them, including adequate minimum wages, unions and health insurance," said Richard Walker, principal investigator for the report, a UC Berkeley professor of economic geography and chair of UC Berkeley's California Studies Center.

Researchers Dan Acland (a 2004 graduate of UC Berkeley's School of Public Policy and a UC Berkeley master's student in statistics) and Nari Rhee (a UC Berkeley Ph.D. student in geography) authored the study under Walker's supervision and cited an increasingly polarized labor market structure as a major reason for the increases in inequality and working poor.

The North Bay experienced an economic boom in the1990s, attracting new residents and workers drawn by the high-tech businesses setting up shop, particularly in Sonoma County, the report said. Since then, the North Bay has felt pangs of recession while largely weathering the storm. But closer examination, researchers contend, shows a misshapen, hour-glass economy with more wealthy people, many more low-paid workers, and less of a middle class in between.

That image is likely to persist, they said, with more than three-fifths of projected new jobs in the North Bay for 2001-2008 developing in occupations with entry level wages of $12 an hour or less.

In preparing "The Limits of Prosperity," the researchers used data from the U.S. Census Bureau and the state Employment Development Department to analyze trends for the more than 900,000 people in the North Bay by industry and occupation, wages, working family income and poverty.

Among their key findings:

* The income of the top one-fifth of working families grew six times faster than that of the bottom one-fifth in Sonoma and Napa counties. The income of the top one-fifth income earners in Marin County grew by 38 percent, while that of the bottom one-fifth fell 2 percent.

* Latinos, the region's fastest growing ethnic group, are twice as likely as whites to be poor and the most likely ethnic group to experience working poverty.

* Poverty has increased faster among working families than among the population at-large: 40 percent faster in Napa; 80 percent faster in Marin; seven times faster in Mendocino; and eight times faster in Sonoma.

* One in six working families in the North Bay does not earn enough money to pay for basic needs, and more than one-third of workers in the region do not earn enough to enable two parents working full-time to support two children.

* New jobs being created are concentrated in professional and service jobs, which are at opposite ends of the wage scale, and two-thirds of the new jobs projected through 2008 do not require any post-secondary education or vocational training.

The authors of the report also said that although the North Bay experienced economic growth and improved prosperity in the '90s, job and wage trends show persistent racial and gender inequality in each of the region's four counties.

"A color line has been drawn across the region that cannot be tolerated indefinitely," the researchers wrote. They also noted that an aging white population nearing retirement and a relatively young - and growing - minority population promises that minorities will comprise an ever-larger share of the labor force.

Researchers suggested ways to improve the economic playing field with recommendations including:

* Raising the minimum wage

* Expanding protections for the right of workers to organize unions

* Increasing access for low-income families to affordable housing and quality health care

* Developing training partnerships and creating job "ladders" within low-wage industries that enable advancement.

"The growing inequality of the North Bay economy affects not just those at the bottom, but everyone in the region," the report said. "It threatens to undermine the region's economic future, overburden an already strapped public sector, and break the bonds of social cohesion."

The study will be discussed at a free public forum of elected officials, labor representatives and the community from 9-11:30 a.m., Saturday (March 5) at Santa Rosa Junior College. The event will be held in the faculty lounge of the Doyle Student Center at Mendocino and Elliott avenues.

Congressman Lynn Woolsey (D-Santa Rosa) will chair a panel of elected officials that will include Assemblywoman Noreen Evans (D-Santa Rosa), Sonoma County Supervisor Mike Kerns, Superintendent of Sonoma County Schools Carl Wong and other community leaders.

The executive summary or the full report can be downloaded at http://www.neweconomynorthbay.org.

The report was published by New Economy, New Solutions, a nonprofit research and education organization in the North Bay, with financial support from other groups and institutions, including the former University of California Institute for Labor and Employment (now the Labor and Employment Research Fund).