Gavin Newsom has a chance to address inequality in California. Will he take it?

Now that the pandemic is receding, the economy is rebounding and no major political opposition stands in the way of his re-election this year, Newsom has an opportunity to return to his original priority of reducing the stain. poverty on the state.

He is expected to address the issue today in the final state of the state address of his first term. “There’s going to be an explicit call about inequality and stakes,” said an aide, who spoke only if unnamed because he wasn’t authorized to preview the speech. “One of the themes of the speech will be democracy, and the link to how unchecked inequality undermines democracy.”

Some pundits and advocates say Newsom’s efforts to bridge the economic divide could determine his legacy — and help set him apart from his predecessor and fellow Democrat, Jerry Brown, who insisted that state government could only go so far. to bridge the gap between rich and poor.

“If the comparison is to former governors of California, it’s trying to do a lot,” said Chris Hoene, director of the California Budget and Policy Center, a nonprofit organization that studies policies affecting low-income Californians. “If the comparison is where we were when he took over as governor, and where we are today, he faces a ton of headwinds. And urgency and need are driving expectations that what do more.

Nationally, the job recovery is in full swing, and although California is lagging other states, it could finally see improvements as mask mandates ease and the economy returns. more than normal. The pandemic — and the state’s record budget surpluses — gave Newsom an opportunity to address the state’s inequities. Democratic leaders in the State Assembly and Senate leaders also say they want to use the budget to create a more inclusive recovery and a fairer economy.

But Assembly GOP Leader James Gallagher of Yuba City said it’s Democrats’ policies that are fueling inequality.

“We have a huge surplus because the richest are doing so well,” he said. “It doesn’t tell the story of middle and low income people in this state.”

For example, he said working families are hammered by the high cost of gasoline in the state, which according to AAA has now exceeded an average of $5 per gallon – an increase accelerated by the Ukrainian waralthough Gallagher and others Republicans also blame state gas taxthan the Democrats raised in 2017 under Brown to repair roads and bridges and expand public transit. Newsom offered to postpone a raise scheduled for July, but he encountered resistance of his own party in the Legislative Assembly. The California Democrats’ climate change agenda has also driven up the cost of public services, further deepening inequality, Gallagher said.

“I think he really cares about this issue, but I think his policies — the policies of him or Democrats in the Legislature — have made the problem worse,” Gallagher said. “The other issue is that the governor lacks follow through. He’s big on pronouncements and announcing new programs, but pretty short on implementation and results.

What is Newsom’s record?

In his State of the State address last year, Newsom returned to the inequality theme, indicating his belief that the pandemic was “widening the gaps between the haves and the have-nots”. “California’s most acute pre-existing condition remains income inequality,” he said.

During his three years in office, he launched several important initiatives:

  • Regularly expand Medi-Cal coverage to include undocumented individuals up to age 26 and after they reach age 50, and in its January budget offering to cover those who were previously excluded. But the expansion would still leave several hundred thousand immigrants undocumented unable to qualify because they earn above the program’s annual income thresholds.
  • In 2019, expansion of the State’s Working Income Tax Credit and Young Child Tax Credit to help raise wages for low-wage workers and families. In 2020, he signed legislation allowing anyone with an individual tax identification number to benefit from the expanded earned income tax credit. it did undocumented workers eligible to receive hundreds or thousands of dollars each year. Last year he signed a measure granting one-time payments of $600 to those who receive the state earned income tax credit, as well as an additional $600 for certain undocumented taxpayers not eligible for certain federal assistance.
  • During the pandemic, expanded eligibility for several safety net programs, including food assistance, allowing more people to participate. In particular, the state suspended the recertification process in the state’s CalFresh program, which provides food benefits to some 2.6 million low-income households. And the state last year created a universal free school meals programremoving a prior income condition.
  • Upon taking office, announce plans to help working parents with a six-month paid family leave program. It has so far extended the program to eight weeks per parent. In 2020 he signed a bill expanding unpaid family leave to include small employers, but in 2021 vetoed a bill to expand the program to low-income workers. The governor also made progress on his goals to expand preschool education, with a plan to provide universal transitional kindergarten for 4-year-olds by 2025.
  • Experts and activists say making higher education more affordable is important to reducing inequality in the state. Last year, the administration eliminated age and time out of high school requirements for Cal Grant scholarships to community colleges. But the governor vetoed a bill this would have made Cal grants more widely available. Last year, lawmakers also signaled plans to expand a scholarship for middle-class students in the state, as well as more public college seats for California students, though lawmakers must agree this year to finance these promises.
  • The governor’s economic stimulus efforts, trying to target funds regionally, could help the Central Valley and other parts of the state that are struggling. Such work might not be easy; a legislative effort to retrain oil workers has already sparked a political fight among some of the state unions.

Still, supporters say the state could do more to bridge the economic divide.

What do the numbers show?

While recessions tend to widen income disparities between rich and poor, incomes have risen for low-income workers while unprecedented government handouts have kept millions of people out of poverty. This is despite the steep decline in 2020 and the disproportionate number of pandemic-related job losses hitting low-wage sectors. During the recovery, some of the biggest gains are in the leisure and hospitality sectors, according to Sarah Bohnvice president and chair of policy research at the Public Policy Institute of California.

“Wages are rising the most at the lower end of the spectrum, although we’re still in a recovery period with high unemployment,” Bohn said. “It may be that inequality is actually decreasing during the pandemic – which is a little crazy, and we will know more soon – but when you just look at the statistics on wages, the lowest paid sectors have the biggest increase. salaries. ”

Nationally, data from the Federal Reserve Bank of Atlanta shows that the typical wages of the poorest 25% of wage earners increase more rapidly than those of other income groups. Meanwhile, the Biden administration highlighted research by two influential UC Berkeley economists pointing out that economic growth has been broadly shared since taking office in January 2021.

In California, income inequality statistics for 2020 are not yet available, but the trend is one of dramatic widening over the long term as the modern economy favors highly skilled workers. By analyzing pre-tax income and including cash from some safety net programs, PPIC found that the income growth of the bottom 10% of families in California was significantly lower than the top 10% from 1980 to 2019.

David Gruskydirector of the Stanford Center on Poverty and Inequality, said that while incomes may increase at the bottom of the scale, those with higher incomes have been less interrupted by job losses and many have seen a significant increase in the value of their assets.

“Those who had money in the stock market did well, and those are the ones who are well off,” he said.

With its highest revenue and a major increase in federal aid, California’s budget has been full of surpluses during the pandemic. And Congress passed President Biden’s US bailout package last year, which California has used to address some of its longstanding inequities. Newsom and lawmakers have invested billions in homelessness programs, affordable housing, help for undocumented immigrants and his youth mental health system.

Reforms to the youth mental health system are “transformational and should be permanent”, said Ed Lazerea researcher who tracks state budget policy at the Center on Budget and Policy Priorities in Washington, D.C.

Focus on homelessness

In many ways, much of Newsom’s political career has been defined by one of the most visible manifestations of the state’s extremes — homelessness. He gained political attention and notoriety from activists with his Care Not Cash initiative as San Francisco supervisor, a measure intended to cut general homeless assistance programs in exchange for housing and other services. . He often wandered around the city’s Tenderloin, where he saw the homelessness for himself.

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