CHA News Article

Report Examines Income Inequality and the Safety Net in California

A new report from the Public Policy Institute of California (PPIC) has found that the gap between high-income Californians and those with low incomes is twice as large as it was in 1980. Across the state, incomes vary substantially, as does income inequality. At the extreme, Bay Area incomes at the bottom, middle and top are roughly twice that of incomes in the Central Valley and Sierra region. In general, coastal areas tend toward higher incomes at all levels, while inland and northern counties typically have lower incomes. The Sacramento region most closely reflects the statewide income distribution.

According to the report, the safety net — tax credits as well as nutrition, cash and housing assistance — plays a significant role in reducing inequality in California. When these local, state and federal programs are factored in, the gap between the top and bottom incomes shrinks by 40 percent. The report examines the contributions that various types of programs make to incomes in the bottom 10 percent. Food assistance programs like CalFresh and Women, Infants and Children provide the largest share of total resources among low-income families — 17.5 percent. Supplemental Security Income for the blind, elderly and disabled provides the next largest share of resources (7.2 percent). Federal housing aid, federal tax credits and cash assistance each provide about 3 percent of total resources on average to the lowest income Californians.