Poor California

According to the latest US Census report, California has over 20% of it’s citizens living below the poverty level, more than any other state in the nation.  Think about this the next time you find yourself in line at Costco.  If there are four people ahead of you, statically, one of them will be living in poverty.

Yet California also one of the richest states in the nation.  We have the most billionaires (131) living here than any other state. The top 1% of Californians pay 54% of all the income tax collected in the state and the top 20% pay 89% of all state taxes.  That means, if you reported more than $134,000 in adjusted gross earnings this year, you’re paying the tax for 9 out of those 10 people in that Costco line.  And 4 of those 10 people in line don’t have to pay any state taxes at all.  California has a huge discrepancy between the rich and poor.

Over the past 25 years the State of California has collected over $980 billion in tax revenue to pay for welfare programs.  There are more than 880,000  government bureaucrats working in California who’s job, in part, is to help people get off of welfare.  For all that money and all those people you’d think we’d be making progress, but in fact we’re going the opposite direction.

Over the past 6 years the number of people on welfare programs in the City of Los Angeles has increased 75%.  There are now more than 58,000 people in our city living under in poverty.  And there are 60% more recipients on food stamps now than there were just six years ago.

Yet in states like Wisconsin, Michigan and Virginia the number of people living in poverty has plummeted over the past 6 years.  Millions of their citizens are off government programs and are now working to support themselves.

So what did Wisconsin, Michigan and Virginia do different over this period than California did?  To start with those states instituted work-for-pay programs.  Programs designed to get people off welfare and back to work.  California, on the other hand, resisted work-for-pay programs. Instead, we opted to pay welfare recipients cash, goods and services with “no strings attached”.

One reason may be because the bureaucrats and politicians who are charged with reducing poverty in our state have an incentive to increase the funds allotted to them in order to retain their power, clout and employment.  In fact there is a built in “disincentive” for these government employees to succeed in reducing the number of welfare recipients because in doing so, they will be putting themselves out of a job.

This was illustrated to me by Eddie Flores when I sat down with him last month for lunch.  Eddie owns Linesman Clothing in the City of Commerce where he employees 60 people.  Most of them work 40 hours a week for minimum wage sewing garments.

Maxine Waters, Congresswoman for the 43rd district, approached Eddie a few years ago and encouraged him to move his garment company to her South Central LA district.  She said that a great number of her constituents were unemployed and wanted jobs.  Eddie challenged her saying he didn’t believe the people in her district would be willing to work all day for minimum wage.  But he agreed to do a survey of the citizens in her district to see if this was true.  What was discovered is that those unemployed citizens were not willing to give up the benefits they were receiving in exchange for a minimum wage job in Eddie’s garment shop.

19% of voters in the 43rd district were living below the poverty level when Maxine approached Eddie, today that number is over 20%.  A central theme in congresswoman Waters campaign has been to promote aid to the poor.  She has succeeded in that and her constituents have kept her in office 27 years for it.

I have a close friend who is among California’s top 1% wage earners.  He has two boys, both now in their 20’s.  He and his wife have spoiled their boys their entire lives.  They gave them everything they ever wanted and never asked them to do a chore or to get a job.  They now live in a house, rent free, that my friend bought for them and they spend their days “making art”.

My friend and Maxine Waters have a lot in common, they are both loved by those they give stuff to and they don’t ask them to contribute anything in exchange.

If we want to move “Poor California” out of poverty we need to stop electing officials who are spoiling their constituents and we need to stop spoiling the children we are raising.

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