11/22/2005
California’s per capita real (inflation-adjusted) income will fall 11 percent over the next two decades if current demographic and educational trends continue. The decline will be larger than that of any other state, and more than 5-times the two percent decline in per capita income projected for the nation, according to a just released study by the National Center for Public Policy and Higher Education [As America Becomes More Diverse: The Impact of State Higher Education Inequality, November 2005]
Never in U.S. history has per capita real income declined over a two-decade span. But then again, never have American demographics been so impacted by an influx of unskilled minority workers.
The share of California’s labor force consisting of whites is expected to fall to 39 percent in 2020; it had been 71 percent as recently as 1980. California’s growth is almost completely within the Hispanic population, whose workforce share is expected to jump from 16 percent in 1980 to 38 percent in 2020. Immigration is the primary driver.
Per capita real income is being dragged down because, amazingly, public policy is to import poverty — and all its problems.
You might think restrictive immigration policy is a no brainer given these projections. It would postpone, if not reverse, the projected declines in per capita income.
But you would think wrong. The National Center for Public Policy and Higher Education is a think tank supported by the Student Loan Marketing Association’s foundation. Not surprisingly, it proposes increasing aid to low income and minority students to close the education gap between whites and minorities.
That’s a tall order for any state, especially California. Among the state’s working-age adults, about 52 percent of Hispanics do not have a high school degree, compared to 8 percent of whites.
At the other end of the educational spectrum only 12 percent of the state’s adult Hispanics have a college degree compared to 46 percent of adult whites.
Both gaps are larger and have grown faster in California than in other states.
In a perfect world, states could raise minority college enrollments while leaving white rates unchanged. But the world, alas, is far from perfect. As the The National Center for Public Policy and Higher Education report itself says (page 34 [PDF]),
"With the federal budget deficit at an all-time high and states struggling to fund growth in the least discretionary components of their budgets….the outlook for increased student aid to low-income families and minorities is grim. Under these circumstances, it is increasingly important that state grant aid programs are carefully targeted at those who need it most and who would not attend postsecondary education without it."
Translation: California, like other cash strapped states, will have to finance education aid increases for immigrant minorities by reducing such funds for native-born whites.
This makes curtailing mass immigration even more vital.
Ask the National Center for Public Policy and Higher Education why this didn’t occur to it.
Edwin S. Rubenstein is President of ESR Research Economic Consultants in Indianapolis.
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