CRASH: The California Canary

California has for decades been pointed to as the national trend-setter.  Just now, the trend in California is distinctly swirling down, and the vortex is tightening.

Between 1970 and 2008 the share of California’s population comprised of immigrants (legal and illegal) tripled, growing from 9 percent to 27 percent.¹ This Memorandum examines some of the ways California has changed over the last four decades. Historically, California has not been a state with a disproportionately large unskilled population, like Appalachia or parts of the South. As a result of immigration, however, by 2008 California had the least-educated labor force in the nation in terms of the share its workers without a high school education. This change has important implications for the state.
Among the changes in California:

• In 1970, California had the 7th most educated work force of the 50 states in terms of the share of its workers who had completed high school. By 2008 it ranked 50th, making it the least educated state. (Table 1a)
  
• Education in California has declined relative to other states. The percentage of Californians who have completed high school has increased since 1970; however, all other states made much more progress in improving their education levels; as a result, California has fallen behind the rest of the country. (Table 1b)
  
• The large relative decline in education in California is a direct result of immigration. Without immigrants, the share of California’s labor force that has completed high school would be above the national average.
  
• There is no indication that California will soon close the educational gap. California ranks 35th in terms of the share of its 19-year-olds who have completed high school. Moreover, one-third (91,000) of the adult immigrants who arrived in the state in 2007 and 2008 had not completed high school.²
  
• In 1970 California was right at the national average in terms of income inequality, ranking 25th in the nation. By 2008, it was the 6th most unequal state in the country based on the commonly used Gini coefficient, which measures how evenly income is distributed. (Tables 2a and 2b)
  
• California’s income distribution in 2008 was more unequal than was Mississippi’s in 1970. (Tables 2a and 2b)
  
• While historical data are not available, we can say that in 2008 California ranked 11th highest in terms of the share of its households accessing at least one major welfare program and 8th highest in terms of the share of the state’s population without health insurance. (Tables 3 and 4)
  
• The large share of California adults who have very little education is likely to strain social services and make it challenging for the state to generate sufficient tax revenue to cover the demands for services made by its large unskilled population. 

But, of course, California has DIVERSITY, which is...as the collective reminds us...the great panacea that overcomes all else.