In California, researchers found, it really matters where you live. Residents of
ID: 1162628 • Letter: I
Question
In California, researchers found, it really matters where you live. Residents of Silicon Valley live more than four years longer than the average American, earn nearly double the income, and have nearly triple the number of graduate degrees. Residents of Central Valley live nearly a year less than the average American, earn barely more than a poverty- line income, and nearly four in ten failed to graduate from high school Source: CNN, May 6, 2015 a) Explain why the first sentence of the news clip is not correct. b) Does living in a certain area accounts for economic inequality in California. c) What is the main source of inequality in California and what are its effects on inequality? d) Explain how the labor markets of California translate education differences into earnings differences.Explanation / Answer
Answer A & B) The first sentence is incorrect, living in certain area doesn't affect the life span. Life Span is particularly depends upon the living standard, food habits, stress in life, mental stress and physical fitness.
California has the gap between rich and poor grown most since the Great Recession. The Bay Area, home of your Zuckerbergs and Steyers and some of the country’s most expensive ZIP codes, seems like a logical answer. Over the past decade, what other part of California has minted as many members of the “1 percent” as Silicon Valley?
But according to research from the nonpartisan Public Policy Institute of California, income inequality in the Bay Area has worsened only marginally, at least when compared to other parts of the state. In 2007, Bay Area households at the top 10 percent of incomes made about 10.6 times what Bay Area households at the bottom 10 percent of incomes brought home. By 2014, they made about 11.6 times as much.
While that 10 percent increase in the income gap is notable, it pales in comparison to almost every other region in the state.
The “90/10” ratio grew by more than 30 percent in the greater Sacramento region and in the more rural counties north of the Bay Area.
The Inland Empire, still reeling from its foreclosure crisis, saw the biggest jump in income inequality in the state at more than 40 percent.
So much for the growth in the gap; what about the size of the gap itself? Income inequality within California may not look like what you would expect. Regions such as Orange County and the Bay Area, despite their notable concentrations of wealth, are some of the more equal in the state. The most unequal California region, by far, is the Central Valley, where high-income households make 14 times as much as poor households.
Answer C & D) Income inequality in California is getting worse. According to a recent study by the California Budget Center, San Francisco ranks first in California for economic inequality. The average income of the top 1% of households in the city averages $3.6 million, 44 times the average income of the bottom 99%, which stands at $81,094. The top 1% of the San Francisco peninsula’s share of total income now extends to 30.8% of the region’s income, a dramatic jump from 1989, where it stood at 15.8%.
Causes of Income inequality in california
Of the factors examined in this study, rising returns to
skill and immigration account for 44 percent of the rising
income inequality in California. The study found slight
effects for two other factors: Changes in native education,
age, and race (6 percent) and changes in industrial structure
(4 percent).
Taking into account all of the factors examined, the
analysis explains about 54 percent of the growth in the state’s
income inequality. Other causal factors could not be
observed in the data. These factors include such things as
the individual characteristics of people (for example, basic
skills and special training) and the individual characteristics
of jobs (for example, scope of responsibilities).