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Shifting Economic Equity

Shifting Economic Equity

Shrinking Middle Class  Jobs & Wages  Education & Income Disparity  Poverty  Displacement  Jobs-Housing Fit

Shrinking Middle Class

The middle class is shrinking in San Mateo County and the San Francisco Bay Area. Over the past 25 years, many of San Mateo County’s middle-income households have been replaced with lower and upper income households. In 2013, the county showed the largest wage gap compared to neighboring San Francisco and Santa Clara Counties, with the average income of the top 1% at 46.2 times that of the 99%, and accounting for 31% of the total income earned in the county (California Budget and Policy Center).

High incomes elevate the cost of living and in response middle-income and low-income households relocate to more affordable housing markets. 2016 estimates show that the net migration (difference between residents moving in and residents moving out) in San Mateo County decreased for the first time since 2010 (American Community Survey). Many residents that earn the lowest wages cannot afford to relocate and instead resign to crowded or low quality housing.

Historically, a strong middle class is associated with a resilient economy and stable public services and schools that enhance economic mobility. Low and middle-income residents tend to contribute to the economy by spending a majority of their income locally. Whereas, over the past 10 years, high-income residents in our region have increased philanthropy overall, however, a smaller proportion of these funds reached local nonprofit organizations.

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Jobs & Wages

Residents are affected by the cost of living at varying magnitudes depending on their income. A larger portion of a low-wage income must be used to meet basic needs and pay sales tax, compared to high-wage income. In effect, the price of goods and services are higher for low-wage earners, who often sacrifice meeting one need for another.

Sample budget

Although San Mateo County had the lowest unemployment rate in the Bay Area as of October 2016, these figures do not account for those who are underemployed, working part-time, or have contract jobs.

  • Part-time workers often shoulder the cost of individual health insurance. Independent contractors are individually responsible for health and liability insurance as well as self-employment taxes.
  • Within the state of California, underemployment is twice as high as unemployment (Job Train).

Increasing minimum wages has the potential to improve the wellbeing of those earning the lowest incomes. The minimum wage in the state of California is $10.50 per hour ($21,924 annually), whereas the federal minimum wage is $7.25 per hour ($15,138 annually).

SSS
  • The City of San Mateo passed a $12 minimum wage, effective January 1, 2017, which will rise to $15 by January 1, 2019. For nonprofit organizations the minimum wage is $10.50 as of January 1, 2017, rising to $13.50 January 1, 2019.
  • San Mateo County is considering a $17 minimum wage for their independent contractors. This effort would be a step toward the Self-Sufficiency Standard for one adult in a 2-person household. Many independent contractors for the county are affiliated with local nonprofits.

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Education & Income Disparity

Wages often correlate with educational attainment though there are noticeable income disparities by gender and race. Tuition and books cost the same for all students, but the returns on that investment are not equal.

  • The high concentration of women in low-wage occupations, such as food service and teaching, accounts for some wage disparity, however, males in these positions still earn 1–2% more than females. (Bay Area Council Economic Institute).
  • Women with college degrees are less likely to pursue careers in high wage fields such as engineering or computer science (Washington Post).
  • In 2015, 12% of San Mateo County residents over 25 did not have a high school diploma, 15% were high school graduates, 26% completed some college courses or had an AA degree, and 47% had a college degree.
  • Income inequality affects the health of low-income children as well as education achievement. Students in high-income families outperform low-income students, compounding challenges for those who may not be able to afford the cost of higher education.

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Poverty

The poverty rate in San Mateo County increased to 8.4% in 2015; 53% of these residents speak a language other than English at home. North Fair Oaks has the highest poverty rate on the peninsula and the third highest rate in the entire Bay Area (Urban Habitat).

Poverty Rate by Census Tract
  • The majority of the working poor in the San Francisco metro area are Latino and Black (Job Train). In San Mateo County, the majority of residents who live in poverty are Latino (National Equity Atlas)
  • The Bay Area has lost residents that live at or near the poverty level, particularly Black and Latino residents (Urban Habitat).
  • In California, the cost of licensed childcare for one infant and one school aged child is equal to the annual pay at the Federal Poverty Level (CA Budget and Poverty Center). The cost is potentially greater for Bay Area residents.
  • 65% of women who leave an abusive relationship end up below the poverty level (CORA).
  • Those who are homeless are not included in poverty measures because they are not housed.

Many safety net services for low-income Californians are based on the Federal Poverty Level (FPL). This measure is based on calculations developed in the 1960’s and is only adjusted for inflation on the national level, without adjustments for regional cost of living. The FPL and unemployment rate are used at a local level to determine access to funding for school lunch and employment development programs, therefore underestimates of these measures have a direct effect on the financial wellbeing of low-income residents (JobTrain).

CALIFORNIA POVERTY MEASURE
  • The California Poverty Measure (CPM) was developed to address the shortcomings of the Federal Poverty Level (FPL) and attempt to accurately measure the number of people in poverty in California. The measure is based on self-reported income (including safety net services), which is then adjusted for the local cost of living.
  • According to calculations by Public Policy Institute of California (PPIC), without benefits from safety net services 40% of children in California would live in poverty rather than 25%.

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Displacement

Our local economy has flourished since 2008 as our technology industry and culture have attracted enthusiasts and entrepreneurs from all over the world. As the population outpaces the number of available housing units, pressure on the housing market causes home values and rental prices to increase. The price of goods and services also grows with demand as operating costs for local businesses increase. This puts economic stress on many low-income residents and often forces them to leave their existing residences to move to less expensive areas.

  • Research by the California Housing Partnership Corporation found that between 2000 and 2013 the median income for renters decreased by $3,689, while the median rent increased by $2,587 annually.
  • Over the past 5 years, the peninsula gained 215,000 new residents but only produced half the housing units needed to accommodate the population growth (Joint Venture Silicon Valley).
  • Residents who lost their homes during the mortgage crisis re-entered the rental market but were unable to afford inflated rental prices in the Bay Area.
  • Between 2000-2014 the Bay Area lost 22,000 Black residents, 2,796 from East Palo Alto. The number of Latino residents only decreased in Foster City and Menlo Park and the number of Asian residents has increased (Urban Habitat).

The Bay Area Regional Health Inequities Initiative’s Displacement Brief reports that San Mateo County had the highest rate of gentrification and displacement in the nine-county Bay Area as of 2015. Gentrification is the loss of low cost housing that transforms to higher cost housing and displaces low-income residents who can no longer afford the price. 28% of San Mateo County has undergone advanced gentrification or displacement, compared to 22% for the region. An additional 28% of San Mateo County is at risk of gentrification, whereas 64% of San Francisco is at risk. Displacement is a hardship on families as the stress of moving and switching schools can lead to health impacts. The University of California at Berkeley’s Urban Displacement Project developed an interactive displacement and gentrification map.

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Jobs-Housing Fit

Jobs-Housing Fit is the ratio of the low-wage jobs and affordable housing units in a region. The Nonprofit Housing Association published ratios for selected cities in the Bay Area. Data indicates that in the City of San Mateo, there are over 8 low-income jobs for each unit of affordable housing, and 3,556 affordable units are needed to reach a jobs housing fit of 2 jobs per unit which is still above the average jobs/housing ratio of 1.58 jobs per unit.

Jobs Housing

According to the map below, prepared using the Regional Opportunity Index mapping project, most neighborhoods in San Mateo County have a jobs housing fit ratio of 4 or higher.

Jobs-Housing Fit 2014

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Sources

Beck, L., Danielson, C., & McConville, S. (2015). Enrollment in Health and Nutrition Safety Net Programs among California’s Children (p. 27). Public Policy Institute of California. Retrieved from http://www.ppic.org/content/pubs/report/R_215LBR.pdf

Building Gender Equity in the Workplace | Bay Area Council Economic Institute. (n.d.). Retrieved February 26, 2017, from http://www.bayareaeconomy.org/report/gender/

CORA – Serving victims of domestic violence in San Mateo County, California. (n.d.). Retrieved February 26, 2017, from http://www.corasupport.org/

Bay Area Regional Health Inequities Initiative. (2016). Displacement Brief: Housing Insecurity and Displacement in the Bay Area (p. 4). Retrieved from http://barhii.org/wp-content/uploads/2016/02/BARHII-displacement-brief.pdf

Joint Venture Silicon Valley. (2016). Retrieved February 27, 2017, from http://www.jointventure.org/

National Equity Atlas. (2017). [Interactive map illustration the Percent People of Color,2050]. National Equity Atlas from the The Face of America is Changing. Retrieved from http://nationalequityatlas.org/

Lane, M. (2015). Jobs/Housing Fit and the Effects on Bay Area Health, Equity and Environment (p. 2). Non-Profit Housing Association of Northern California. Retrieved from http://nonprofithousing.org/wp-content/uploads/JH-Fit-Fact-Sheet-FINAL-9.15.pdf

Rampell, C. (2015, January 27). Women falling behind in STEM bachelor’s degrees. The Washington Post. Retrieved from https://www.washingtonpost.com/news/rampage/wp/2015/01/27/women-falling-behind-in-stem-bachelors-degrees/?utm_term=.0d32cb5f08f7

Samara, T. R. (2016). Race, Inequality, and the Resegregation of the Bay Area (p. 20). Urban Habitat. Retrieved from http://urbanhabitat.org/sites/default/files/UH%20Policy%20Brief2016.pdf

Schumacher, K. (2016). Over 1.2 Million California Children Eligible for Subsidized Child Care Did Not Receive Services From State Programs in 2015 (p. 3). California Budget & Policy Center. Retrieved from http://calbudgetcenter.org/resources/1-2-million-california-children-eligible-subsidized-child-care-not-receive-services-state-programs-2015/

University of California Berkeley. (2017). [Interactive map illustration of Urban Displacement]. University of California Berkeley from Mapping Displacement and Gentrification in the San Francisco Bay Area. Retrieved from http://www.urbandisplacement.org/map/sf

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From the 2014 Indicators Report

The county’s population is expected to grow by 185,000 before 2040.

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