The gap between high and low incomes is wider in California than in most other states.
- In 2022 (the most recent data available), families at the top of the income distribution—the 90th percentile—earned 11 times more than families at the 10th percentile ($305,000 vs. $29,000, respectively). Only three other states had wider income gaps.
- The current gap reflects 52% income growth for the 90th percentile, and 13% growth for the 10th percentile over the past four decades. In 1980, families at the top earned 7 times more than those at the bottom.
- California’s unequal income distribution is linked to high rates of poverty. Families with incomes in the bottom quarter of California’s income distribution either fall below or are at risk of falling below the amount required to meet basic needs (about $40,000 per year for a family of four); poverty would be higher without safety net programs.
- Californians are concerned. According to the PPIC Statewide Survey, 70% believe that the gap between rich and poor is widening, and a similar share think state government should do more to reduce the gap. While Democrats (86%) and independents (68%) are much more likely than Republicans (38%) to say government should do more, 60% or more of adults in every region and demographic group hold this view.
After widening at the onset of the pandemic, California’s income gap narrowed in 2022.
- Income inequality grew at the start of the pandemic, reversing several years of narrowing that were driven by notable gains for the lowest-income families.
- Between 2021 and 2022, however, income inequality narrowed again. By 2022, the gap between high and low incomes was only slightly wider than it had been in 2019.
- The narrowing in 2022 was driven by a small decline among top incomes (3%), partly due to lower capital gains—which had soared in 2020 and 2021—and increases among low incomes (5%), reflecting rising earnings after two years of declines.