Repairing California’s Ladder to Opportunity: Making Sure That Hard-Working Families Can Prosper

May 8, 2013

Nearly 60 percent of low-income working families in California have no education beyond high school, the largest share of any state. A new report from the Campaign for College Opportunity and the Women’s Foundation of California, Working Hard, Left Behind, draws attention to the state’s more than 1.3 million low-income working families, highlights the critical link between higher education and economic mobility, and calls for changes to improve the educational pathway to opportunity.

A large proportion of California’s working families — more than a third — are low income, defined as making below 200 percent of the poverty line, or $45,397 for a family of four in 2011. Improving the educational attainment of these working families has the potential to boost their earnings and improve their employment prospects. A college degree is strongly tied to economic security and mobility: On the whole, only Californians with bachelor’s degrees made strong wage gains over the past generation, and, since the recession, job growth nationwide has largely benefited those with education beyond a high school diploma.

Improving access to higher education is a key step that California can and must take to improve economic opportunity for low-income working families. Recent research suggests that every dollar California invests in higher education pays off with a return of $4.50, so this step is also likely to strengthen the state’s economy.

Working Hard, Left Behind outlines actions policymakers can take to improve the state’s pathways to higher education and vocational training and certification. These include:

  • Improving and expanding financial aid options for nontraditional students such as older working adults.
  • Strengthening the delivery of basic skills instruction so that more students can transition into college-level courses.
  • Prioritizing educational resources such as orientation, counseling and advising, and other support services that promote student success and degree completion, particularly for low-income students.
  • Creating a public agenda for higher education that sets clear goals for preparing high school students for college, transitioning adult students into higher education and the workforce, and increasing certificate and degree completion rates.

Of course, the pathway to higher education and workforce success arguably begins as early as preschool. Making sure kids in California’s K-12 public schools have the resources they need to get on track toward higher education must also be a priority for policymakers. A CBP report out tomorrow will look at the current debate surrounding a major policy proposal intended to strengthen educational equity. Moving Forward: Addressing Inequities in School Finance Through the Governor’s Local Control Funding Formula examines Governor Jerry Brown’s bid to direct additional funding to school districts with a larger proportion of disadvantaged students. Stay tuned.

— Hope Richardson

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Posted by cbporg

Supporting All Young Learners, Taking on Inequality

May 1, 2013

In a major opinion piece in the New York Times this past Sunday, Stanford University professor — and 2013 CBP conference speaker — Sean Reardon discusses the growing academic achievement gap between children in the wealthiest families and other children. As Reardon explains, the achievement gap between high-income students (those from families at the 90th percentile of the US income distribution) and lower-income students (those from families at the 10th percentile) has widened substantially during the past few decades.

Reardon partly attributes this growing divide in academic achievement to increased income inequality in the US and, relatedly, to the fact that affluent families are spending more of their resources — financial and otherwise — on their children’s preparation for school, in light of the higher-than-ever stakes of educational success. One way to close the achievement gap between higher-income children and their peers, notes Reardon, is to level the playing field by ensuring that all young people enter school ready to learn:

Maybe we should take a lesson from the rich and invest much more heavily as a society in our children’s educational opportunities from the day they are born. Investments in early-childhood education pay very high societal dividends. That means investing in developing high-quality child care and preschool that is available to poor and middle-class children. It also means recruiting and training a cadre of skilled preschool teachers and child care providers. These are not new ideas, but we have to stop talking about how expensive and difficult they are to implement and just get on with it.

Reardon’s piece underscores that broad access to child care and preschool programs among low-income families is one of the keys (though not the only key) to addressing the achievement gap between affluent children and their less-well-off peers and, in turn, reversing the trend toward greater income inequality. In light of the past generation of widening inequality in California, it is troubling that state policymakers have cut annual support for child care and preschool by about $1 billion — or almost one-third ­— in the past several years. As California’s fiscal picture improves, policymakers should seek to rebuild the state’s investment in high-quality child care and preschool programs that allow low-income parents to work and that also provide critical developmental opportunities for children from lower-income families.

Additional details on Professor Reardon’s research can be found in his presentation from our March 2013 annual conference. Read his presentation slides.

— Steven Bliss

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The Great Recession and Its Aftermath: Putting a Number on California’s Lost Economic Potential

April 18, 2013

Anyone who’s ever played “Chutes and Ladders” knows what happens when you land on the wrong square — a fast ride down a long slide that wipes out much of your progress and puts your goal further out of reach. In many ways, that’s an apt metaphor for the California economy, which — due to the Great Recession — careened down a steep slope near the end of the last decade, eventually hit bottom, and began a relatively steady recovery that continues today, albeit at a frustratingly slow pace for the many Californians who are still hurting in the aftermath of the economic downturn.

What if California hadn’t landed on the “wrong square” and hit a steep downward slide back in 2008? What might the California economy — and the state’s revenue picture — look like today? We can address these questions by looking at earlier projections from the Legislative Analyst’s Office (LAO), which annually publishes a multiyear fiscal outlook. The LAO’s November 2007 outlook was the last edition prior to the economic free fall of late 2008 and early 2009. As such, the 2007 forecast provides a useful “yardstick” against which to measure how far the California economy has fallen short of its pre-recession potential.

Based on the LAO’s assumptions, total personal income — a proxy for the California economy — was projected to steadily rise from $1.575 trillion in 2007 to $2.165 trillion in 2013, as shown in the chart below. Instead, as a result of the Great Recession, personal income actually dropped by almost $100 billion from 2008 to 2009 — a decline of nearly 6 percent in a single year. While personal income has risen each year since 2009, these increases have not been large enough for the state to “catch up” to its pre-recession trajectory. As a result, California personal income now estimated for the current year — $1.802 trillion — is $363 billion below the 2013 level that had been assumed in the LAO’s 2007 forecast.

This gap between what is and what might have been goes a long way toward explaining why California continues to face such a challenging fiscal environment despite the passage of two tax measures, Propositions 30 and 39, on the statewide ballot last year. The $363 billion in unrealized personal income — that is, California’s lost economic potential in 2013 — could have generated roughly $27 billion in state revenues this year, based on revenues comprising 7.5 percent of the California economy, which is the 40-year average. With those additional revenues, total state revenues (General Fund plus special funds) would have exceeded $160 billion. This is substantially higher than the $134 billion in revenues estimated by the Governor for the current fiscal year — an estimate that includes the new revenues from Propositions 30 and 39.

In short, the total personal income gap caused by the economic downturn has led to a revenue gap this year of well over $20 billion — dollars that are not available to support investments in education, child care for working families, health care, and a range of other public systems and services that promote economic growth and broadly shared prosperity.

— Scott Graves

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Posted by cbporg

Affordable Child Care and Preschool Are Critical Supports for a Changing US Workforce

March 26, 2013

Last week, the CBP and the Women’s Foundation of California jointly released a report showing that women are not sharing equally in the state’s emerging economic recovery and that recent cuts to key public services and systems threaten pathways to economic opportunity for women — especially low-income women. One of the report’s major points is the deep reduction made to state funding for child care and preschool programs in the past several years. State policymakers have cut annual funding for subsidized child care and preschool programs by more than $900 million since 2007-08, resulting in the elimination of more than 110,000 child care and preschool slots. At a joint hearing of the Assembly Budget Subcommittees on Health and Human Services and Education Finance last Wednesday, we highlighted these cuts while discussing the importance of child care and preschool programs for low-income families.

Prioritizing support for child care and preschool programs is especially critical in light of the changing nature of the US workforce — in particular, the large number of mothers of young children entering the labor force in recent decades. As discussed in our testimony at last week’s joint hearing, the share of women working or looking for work that have children age 5 or under has risen substantially since 1975, from 39.0 percent to 64.2 percent — an increase of nearly two-thirds. Additionally, in 2010, more than 30 percent of women in the workforce with young children were single mothers, meaning that the stakes of creating economic opportunity for women are as large as ever.

Subsidized child care and preschool programs are especially important for low-income women, given that child care is one of the most expensive items in a household budget. In 2011, in Los Angeles County, full-time care for an infant in a child care center was, on average, $11,499 annually. When women struggle to afford child care, it presents one additional barrier to securing employment.

Low-income women who do have access to child care assistance have a greater chance of maintaining employment, increasing earning potential, and becoming financially independent. Boosting state support for child care and preschool is a prime example of the kind of strategic public investments that can support women’s economic advancement and security. Policy choices made today will determine whether we work toward widely shared prosperity and healthy families over the long-term.

— Kristin Schumacher

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Posted by cbporg

New CBP Report: Investing in Women’s Career Advancement and Economic Security

March 20, 2013

The CBP yesterday released a new report showing that almost four years since the official end of the Great Recession, the impact of the downturn is still acutely felt among women — especially low-income women — in California. Released in partnership with the Women’s Foundation of California, A Fair Chance: Why California Should Invest in Economic Opportunity for Women and Their Families shows that California’s women have not shared equally in the state’s emerging recovery. In addition, the report highlights how budget cuts made in recent years continue to cloud the economic outlook for women and have weakened services and supports that foster their economic security.

The report finds that:

  • Men’s and women’s employment rates have gone in opposite directions during the past two years. Between December 2010 and December 2012, the employment rate for California men increased by 1.7 percentage points (from 79.4 percent to 81.1 percent), while decreasing by eight-tenths (0.8) of a percentage point for women (from 65.3 percent to 64.5 percent).
  • Local government employment — long a jobs mainstay for California’s women — has declined over the past four years and continued to trend lower throughout 2012, showing the lasting effect on women’s employment of the deep budget cuts made in recent years. Local government employment includes jobs with K-12 public schools, community colleges, and cities and counties.
  • Women account for more than two-thirds of a huge drop in California community college enrollment, which declined by more than 300,000 students between 2007-08 and 2011-12. This means women have less access to education and training that lead to immediate employment or to a four-year degree program. In addition, women’s enrollment at the University of California and California State University has lagged that for men since 2007.

  • Amid a weak job market and growing poverty, state policymakers have made significant cuts across a range of programs and services that help women find and keep work and provide for their families.  These included steep reductions to child care and preschool funding — causing the elimination of more than 100,000 slots — as well as to welfare-to-work services and cash assistance provided through the California Work Opportunity and Responsibility to Kids (CalWORKs) Program.

The report was featured yesterday at a Capitol briefing for legislators and their staffs and received coverage from the Los Angeles Times, Sacramento Business Journal, Inland News Today, and other outlets across the state. You can read the full report here and an executive summary of the report here.

— Steven Bliss

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