SLIDE 1
California’s Economic Outlook and Implications for The State Budget
CHRIS HOENE EXECUTIVE DIRECTOR JANUARY 20, 2016
| 2
Californias Economic Outlook and Implications for The State Budget - - PowerPoint PPT Presentation
Californias Economic Outlook and Implications for The State Budget - - PowerPoint PPT Presentation
Californias Economic Outlook and Implications for The State Budget CHRIS HOENE EXECUTIVE DIRECTOR JANUARY 20, 2016 calbudgetcenter.org The Current Economic Recovery: Slow and Uneven Improvement Following a Steep Downturn | 2
SLIDE 2
SLIDE 3
| 3
California’s Economy Continues to Improve
- California’s current unemployment rate: 5.7%.
- This is less than half of what it was during the worst of the
Great Recession (12.2% in 2010).
- Before the Great Recession began, California’s
unemployment rate was 5.4%.
SLIDE 4
| 4
It Took Much Longer to Regain the Number of Jobs Lost in the Great Recession, Compared to Other Downturns
Percent Change in Total Nonfarm Jobs in California Since Each Recession Began
Note: The 2001 recession includes data up to July 2007, the month the Great Recession began in California. Source: US Bureau of Labor Statistics
- 12
- 8
- 4
4 8 12% Great Recession 2001 Recession Early 1990s Recession 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 Percent change at 0 = point at which jobs lost in a recession are recovered 5.2% 4.2% 10.4% Months Since Recession Began
SLIDE 5
| 5
Only High-Income Households Have Seen Their Incomes Recover From the Great Recession
Percent Change in Income Segment’s Average Inflation-Adjusted Income, 2006 to 2014
Source: US Census Bureau
Top Fifth Fourth Fifth Middle Fifth Second Fifth Bottom Fifth 1.3%
- 3.4%
- 6.7%
- 10.0%
- 14.7%
SLIDE 6
| 6
Wages for All but the Highest-Paid California Workers Remained Below Their Pre-Recession Levels in 2014
Percent Change in Inflation-Adjusted Hourly Wage Between 2006 and 2014
Note: Data are for workers ages 25 to 64. Source: Budget Center analysis of US Census Bureau data
- 8
- 7
- 6
- 5
- 4
- 3
- 2
- 1
1 2 3 4 5%
90th Percentile 80th Percentile 70th Percentile 60th Percentile Median 40th Percentile 30th Percentile 20th Percentile 10th Percentile
SLIDE 7
| 7
Poverty Remains One of California’s Largest Challenges
SLIDE 8
| 8
California’s Poverty Rate Remains High Even as the State’s Jobless Rate Has Fallen Substantially
California’s Poverty and Unemployment Rates
Source: Employment Development Department and US Census Bureau
Unemployment Rate Poverty Rate 5 10 15 20 25% 2014 2013 2012 2011 2010 2009 2008 2007 2006 7.5% 16.4% 4.9% 12.4%
SLIDE 9
| 9
Nearly 1 in 6 Californians and More Than 1 in 5 California Children Lived in Poverty in 2014
Percentage of Californians With Incomes Below the Federal Poverty Line
Source: US Census Bureau
Child Poverty Rate Poverty Rate 5 10 15 20 25% 2014 2013 2012 2011 2010 2009 2008 2007 2006 22.7% 16.4% 17.3% 12.4%
SLIDE 10
| 10
There Are as Many Californians in Poverty as There Are Residents of the State’s Three Largest Cities
Millions of People
Source: Department of Finance and US Census Bureau
1 2 3 4 5 6 7 8M Number of City Residents Number of Californians in Poverty 6.3 San Jose San Diego Los Angeles 6.3
SLIDE 11
| 11
Poverty Rates Remain High in Many Parts of the State, Even in Places Where Job Gains Have Been Strong
Percentage-Point Difference in Poverty Rate Between 2007 and 2014
Source: Budget Center analysis of US Census Bureau data
SLIDE 12
| 12
Many Californians Struggle to Make Ends Meet
SLIDE 13
| 13
A Large Share of Low-Income Californians Struggle to Pay the Rent in Nearly Every County
Share of Low-Income Renters Paying More Than Half of Their Income for Housing
Note: Low-income households are those whose incomes do not exceed 80 percent of the median family income for the area. Source: Center on Budget and Policy Priorities
SLIDE 14
| 14
Implications for the State Budget and Education Spending?
SLIDE 15
| 15
California’s Per Student Spending Has Gained on the Rest of the US, but Still Lags
Gap Between California’s K-12 Spending Per Student and the Rest of the US
* 2013-14 and 2014-15 data are estimated. Note: Figures are in 2014-15 dollars. Source: National Education Association
- 3,000
- 2,500
- 2,000
- 1,500
- 1,000
- 500
$0 14-15* 12-13 10-11 08-09 06-07 04-05 02-03
- $2,675
- $975
- $770
SLIDE 16
| 16
The Gap Between California's K-12 Spending and That in the Rest of the US Has Narrowed Since 2012-13
K-12 Spending as a Percentage of Personal Income
* 2013-14 and 2014-15 are estimated. Source: National Education Association and US Bureau of Economic Analysis
Rest of the US California 2.5 3.0 3.5 4.0 4.5% 14-15* 12-13 10-11 08-09 06-07 04-05 02-03 4.04% 3.48% 3.07% 3.88% 3.97% 3.94%
SLIDE 17
| 17
California’s Support for K-12 Education Ranks Low by Almost Any Measure
SLIDE 18
| 18
How Does California's Support for K-12 Education Compare?
* Data are estimated. Note: All figures reflect Budget Center calculations.
Staffing Ratios Rank California US Source Spending Per Student K-12 Spending Per Student Adjusted for Cost of Living (2014-15)* 42 $10,139 $12,040 National Education Association (NEA) and Texas A&M University Spending as a Share of the Economy K-12 Spending as a Percentage of Personal Income (2014-15)* 36 3.48% 3.88% NEA and US Bureau of Economic Analysis Number of K-12 Students Per Teacher (2014-15)* 51 22.4 15.5 NEA Number of K-12 Students Per Guidance Counselor (2011-12) 51 785 440 National Center for Education Statistics (NCES) Number of K-12 Students Per Librarian (2011-12) 51 7,572 958 NCES
SLIDE 19