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Income Inequality and Economic Opportunity in California

Sarah Bohn, Dean Bonner, Julien Lafortune, and Tess Thorman

The COVID-19 pandemic upended California’s economy. The shutdown of most in-person economic activity in Spring 2020 led to a dramatic spike in unemployment – especially in hard-hit industries like leisure, hospitality, and personal services. Nine months after the initial shutdown, the labor market improved somewhat but remained precarious, with low-income workers bearing the brunt of the fallout. As a result, the current crisis threatens to reinforce existing inequities and deepen the state’s longstanding economic divide.

With support from Irvine, in December 2020 the Public Policy Institute of California (PPIC) published Income Inequality and Economic Opportunity in California. The report, and accompanying blog series on income inequality and economic recovery, looks at the effects of the downturn on California’s labor market in the context of growing income inequality. PPIC also examined the policy levers that could help promote an equitable recovery and address the needs of the most affected workers and regions. Key themes from the report include:

  • Past recessions have exacerbated income inequality in California.
  • The effects of the pandemic recession are concentrated among low-income workers, African Americans, Latinos, and women.
  • Many workers, especially in inland California, were already struggling before the pandemic.
  • Policy interventions can improve economic opportunity, and Californians support a state role in these efforts.



Also in December 2020, with support from Irvine, PPIC released their first statewide survey of Californians focused on the topic of economic inequality and mobility. The PPIC Statewide Survey: Californians and Their Economic Well Being looks at residents’ opinions and perceptions of the state’s economic outlook and the impact on their financial future.