The Wages of Progressive Elitist Political Sins in California

Progressive elitist political sins have very real consequences.  It is often said that California leads the nation in trends such as progressive elitism.  It is certainly the intent of many of the major Internet media companies based in California, such as Google and Facebook, to lead America into a socialist future.  The California Budget and Policy Center has compiled the data on low wage, mid wage, and high wage workers in California for the last 40 years.  The eye-opening inflation-adjusted, real wages are plotted below:

Apparently, progressive elitist policies only work for elitists and only hurt those the elitists claim they are trying to help.  Over 40 years, low wage workers in California were mostly worse off than they were in 1979 and only the recent expansion of the economy has managed to bring them to a very slight improvement over 1979 of 4%.  Mid wage earners have been very nearly flat in earnings per hour over this entire 40 year period.  The upper 10% of wage earners have done comparatively OK under California progressivism with a 43% real increase, though even this is only a 1.075% increase per year.

In comparison, the national real median personal income is:

Nationwide, real median personal income went up by 39% from 1979 to 2016 and it went up further in 2017.  This median national real income is not on a per hour basis, as is the data above on California workers.  However, in 1980 the average worker worked 38.1 hours a week and now the average worker works 34.4 hours/week, so one could multiply the gains in the national median income by about 1.1 for a comparison with the CA data above, though I am not doing that in the subsequent numbers I discuss.  If the national median personal income data excluded the population of California, whose population is about 12% that of the entire U.S., the increase would have been greater.  In fact, with some simple algebra one calculates that the median non-California worker’s real income increased by about 44%, which means that outside of California, median income workers did as well as the top 10% of California workers did over the 40 years since 1979.  And that despite the fact that real incomes in many other states have also been held hostage to the sins of progressive elitist politics.

The wages of California progressive political sins are even worse than is suggested by this data.  The inflation adjustment on California worker wages is a national inflation rate, not a California cost of living adjustment.  California progressive politics has caused housing costs to soar.  Their regulatory state has caused costs on many businesses to soar as well and these costs have to be passed on to the people living in California.  State taxes are high.  The cost of living in California is about 13.4% above the national average, or about 15.2% above the national cost of living excluding California.

The California practice of suppressing individual rights has bad consequences for more than one’s economic well-being, but the economics of it are bad enough.  Once again, I will remind my readers that economic growth rates are like interest rates, as they go up they have a most remarkable compounding effect on the size of the economy.  A rapidly growing economy makes a very much bigger pie to benefit everyone over a 40 year period, which is the time that most Americans have to look forward to before they die.  Many of us have even longer time-horizons for our concerns, since we have children and grandchildren we love and want to see flourish in freedom, prosperity, and security.

My youngest granddaughter just celebrated her first birthday.  If the national economy grows at a rate of 3% a year for the next 90 years, it will be 14.3 times as big as it is today.  Such growth rates are very achievable, if our governments do not excessively interfere with the private sector.  A 2% growth rate for 90 years yields an economy only 5.9 times its present size.  I expect the 14.3 times larger economy will have much more to offer my granddaughter as her life comes to a close than will an economy 5.9 times larger.  It might even offer her many more years of enjoyable life.  Of course, a real Progressive Elitist government outcome could be a negative growth rate or a 1% growth rate, where the latter economy in 90 years would be only 2.4 times the size of the present economy.