California keeps adding low-wage jobs. Can it find a way to save its middle class?
California is becoming less equal every day.
The state’s 100 richest residents had $815.5 billion in net worth as of September 2020, up 18% from 2019, according to Forbes.
Yet Rey Justo and his family of six in Sacramento were living between a Honda Pilot and his in-law’s living room.
The top 1% of Californians earned at least $659,000 in 2020.
But Omar Yacoubi was putting in a 12-hour workday driving for Uber in the Bay Area last year after he found himself without a stable gig as a software designer.
“Income inequality has risen sharply in California over the past two decades, increasing faster in the state than in the nation as a whole.” A researcher at the Public Policy Institute of California, Deborah Reed, said that more than two decades ago, in 1999.
In the intervening years, California spent billions to fight poverty. A tech boom led Californians to gain billions in wealth.
That gain has only exacerbated the state’s income inequality, now ranked as greater than all but five states.
Low-paying jobs are defined as the bottom 30% of positions ranked by wage at the national level. In California they grew from about 25% in 2001 to 30% in 2016.
The share of middle-wage jobs — those between the 30th and 70th percentiles — shrunk during the same period, according to an analysis of the wage data by nonprofit Next 10.
What needs to happen to reverse that trend?
The Sacramento Bee talked with policymakers, workforce development experts and workers themselves to answer that question. Their answers suggest it isn’t enough to teach more people how to write computer code.
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What can California do to ensure higher paying jobs? Watch The Bee’s documentary ‘Beyond Poverty: Fight for the California Dream.’ Click on “play” on the video below.
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Working poverty
In California, just working isn’t enough to get people out of poverty — defined by PPIC as making $34,200 per year for a family of four after accounting for the cost of living.
As of 2019, more than 30% of California workers made less than $15 per hour, or $31,200 a year, even though the majority of them worked full-time.
It takes 90 hours a week of working a minimum wage job for a Californian to afford a modest one-bedroom apartment, according to the National Low Income Housing Coalition.
Justo was among the luckier ones, making $20 an hour installing fireplaces. But he felt stuck.
“I’m sitting there on the edge of every roof trying to install things,” he said. “I used to work 120 hours every two weeks just trying to pull in extra money.”
Then, the pandemic hit, putting more stress on lower-income workers like Justo. He lost his job. Meanwhile, Yacoubi found himself driving more hours for Uber, while adding food delivery to his portfolio.
“I was trying to live what I thought the American dream was supposed to be,” he said. ”My perception of that definitely changed over time. There’s an expression that says ‘your possessions end up owning you’.”
Finding work
As the pandemic went on, Justo and Yacoubi found different ways to land on their feet.
For Justo, it was an email in a folder he rarely checked. The letter invited him to apply to Sacramento’s program to pay residents $600 a week for nine weeks while getting trained for digital jobs such as data analyst.
He was one of 40 who got into the program, which led to a job working as a database administrator for tech firm Zennify.
“To be in a position now where I can just steadily work and not worry about income, it’s a remarkable feeling,” he said.
Yacoubi, however, found his answer out of state: He got a job in Seattle that will give him more stability and support. He said California employers didn’t have what he was looking for.
“I think companies have been cutting training. They’ve been expecting workers to come in the door knowing everything about the job. A lot of job descriptions are written that way,” he said. “And I think that’s been a cost-cutting measure. And that’s not how society was ever supposed to work.”
Retraining workers
California, through state and federal funds, spends more than $6 billion a year on workforce training programs, according to the Legislative Analyst’s Office. The federal government has given California and its cities millions of dollars during the pandemic to retrain workers for better jobs.
Those doing the training say it’s not enough just to pay Californians to go to coding boot camps.
Helping workers with expenses such as childcare, they say, is crucial for low-income workers who can’t often afford to spend months getting trained without a job.
“Without that stipend, I’m not sure what would have happened,” Justo said.
The pandemic also hit Pandora Crowder, who was thinking of looking for a full-time job after spending years unemployed. She had worked part-time helping her neighbors access resources at Conway Homes, a public housing complex in Stockton.
“I had posted something on social media, saying well, ‘Thanks quarantine,’” she said. “Here I’m, back on welfare.”
Her social media post drew the attention of the Reinvest Stockton Foundation, which knew of her part-time work at Conway Homes. That led to her job as a special projects associate at the foundation.
Crowder also found a sounding board in Anita Renteria, a lead workforce development specialist at Conway Homes.
“There’s a lot of people out there who don’t have the support, who don’t have a family… to depend on or ask questions,” Renteria said. “Holding their hand, if that’s what you want to call it, or being there for them, or sharing stories with them, or being empathetic to their lives and what they deal with... will help.”
Workers should also be trained for high-demand jobs that provide a solid wage, benefits and reliable hours, workforce development experts say.
Retail workers, for example, could learn to use their skills in growing industries such as healthcare and manufacturing, said Paige Shevlin, director of policy and national initiatives at the Markle Foundation, which aims to move workers into better jobs.
Finally, a fundamental shift has to occur for companies to recognize that qualifications for jobs can come in ways other than a four-year degree or years of experience, said Manvir Sandhu, CEO at Zennify.
“It’s important for the company to have the infrastructure… to support new people who need a little bit of a runway to get up to speed,” he said.
Increasing job quality
California through its policy can decide what jobs are “good,” said former Stockton Mayor Michael Tubbs, who serves as a special adviser for economic mobility and opportunity for Gov. Gavin Newsom.
“Those low-wage jobs are not going to disappear until we raise the floor,” he said. “Because someone else is going to take that low-wage job once the low-wage worker goes to a higher-wage job.”
Unionized drivers delivering packages for UPS can make $75,000 a year with fully paid health insurance and a pension, said Doug Bloch, political director for Teamsters Joint Council 7, which represents many of the company’s workers.
But drivers doing similar work for gig companies like Postmates don’t get many of those benefits, and their pay can be much lower, Bloch said.
The state can and should support companies and industries already investing in their workers, said Tim Rainey, executive director of the California Workforce Development Board.
“If we’re going to move the needle on poverty in California, we have to support the best jobs, the best companies and create pathways to those for people who most need good quality jobs,’” Rainey said. “At the end of the day, you cannot have equity without paying close attention to job quality.”
Addressing poverty goes beyond jobs
Furthermore, Tubbs argued that if the state is to truly lift people out of poverty, it’s important to think beyond creating or giving them good jobs.
A 2019 analysis from the Legislative Analyst’s Office found that places that lift more people out of poverty have some common traits: Lower rates of violent crime, smaller class sizes in schools and stronger social connections, among others.
“Because so much of our political discourse, our policies have been based off of the belief that those in poverty are the problem. And that leads to a certain set of solutions,” Tubbs said. “Like let’s give them parenting classes, let’s give them training. Let’s give them literacy classes. But if you actually truly believe that poverty is a policy choice and a policy failure, then that leads to a different set of solutions that puts the onus on the institution… that puts the onus on all of us.”
Tubbs said California needs more affordable housing – high rents being one of the reasons driving millions into being “working poor.” He has championed universal basic income, which he said could provide a baseline economic security for Californians so they don’t have to worry about simply having enough money to live on.
“We keep talking about teaching people how to fish, but that’s stupid. Folks don’t have fishing poles or bait, or if they go to the lake, and there’s no water and no fish,” he said. “We keep trying to force people to fish, and it was like there’s no water in this lake, or you only fish by your hands. It makes no sense.”
This project was supported by the Solutions Journalism Network and The James Irvine Foundation.
This story was originally published July 29, 2021 at 4:58 AM with the headline "California keeps adding low-wage jobs. Can it find a way to save its middle class?."
