It has been a tough year for everyone during the pandemic, but more so on the lower income portion of the population. As we emerge from an emotionally and financially challenging year, we are seeing that the wealthy and middle-income folks have mostly recovered. The bottom half remain far from it.
This dichotomy is evident in many facets of the economy, especially in employment. Jobs are fully back for the highest wage earners, but fewer than half the jobs lost this spring have returned for those making less than $20 an hour, according to a new labor data analysis by John Friedman, an economics professor at Brown University and co-director of Opportunity Insights.
California’s dysfunctional energy policies have already made the state’s electricity and fuel prices among the highest in the nation. Those high California energy costs have been contributory to the rapid growth of “energy poverty”, and some of the highest unemployment, overcrowding, homelessness, and poverty rates in America, right here in the Golden State. The bottom half, many of which voted for Gavin Newsom, are the ones disproportionally suffering from some of the highest energy costs in the nation.
Many of the folks that voted for the Governor can least afford more expensive energy in perpetuity. Those exorbitant energy costs make California’s economic recovery from the pandemic even more challenging for the 18 million (45 percent of the 40 million Californians) that represent the Hispanic and African American populations of the state. The median income for Latino households in 2016 was $56,200, $55,200 for African American households, and $96,400 for white households. According to several studies, as many as 40 percent of all Californians cannot regularly meet basic monthly expenses.
In 2019, 57 percent of Black families and 50 percent of Latino families with children were poor in terms of net worth, lacking enough financial resources to sustain their families for three months at a poverty level, finds new research from Duke University.
Newsom continues to perpetuate the state’s dysfunctional energy polices and continues to do everything possible to further INCREASE the costs for energy for its 40 million residents which does not bode well for the bottom half making less than $20 an hour.
Vehicle transportation is the survival mechanism for low-income people. If you try to increase the cost of automobiles and the costs of fuel, you hurt low-income people. Some of the taxes and climate policy costs hidden in the all-in posted price of fuel at the pump are federal tax, excise tax, state tax, local sales tax, cap and trade program compliance costs, low-carbon fuel standard program compliance costs, and renewable fuels standard program compliance costs. The wealthy and middle-income folks may tolerate these non-transparent costs. Those less fortunate financially, constantly need to make decisions with their limited income to pay for rent, utilities, food, schooling for their kids, or gas for their vehicle.
The Governor is proud of California, through its dysfunctional energy policies imports more electricity than any other state– currently at 32 percent from the Northwest and Southwest, and being the only state in contiguous America that imports most of its crude oil energy from foreign countries, And dysfunctionally HOPES that other states will continue to be able to generate enough power to meet the demands of the state.
California’s dependency on foreign suppliers has increased imported crude oil from foreign countries from 5 percent in 1992 to 58 percent today of total consumption. The imported crude oil costs California more than $60 million dollars a day, yes, every day, being paid to oil-rich foreign countries, depriving Californians of jobs, careers, and business opportunities.
The Governors latest moves to further reduce oil production and require larger setbacks for existing oil production wells will further decrease in-state production and require the State to increase its monthly imports resulting in expenditures approaching a whopping $90 million EVERY DAY for foreign countries to support the states’ fifth largest economy in the world.
It is mind boggling that the Governor continuously perpetuates the racial biasing of greater energy costs onto those that can least afford “energy poverty” as anyone can see the direct correlation between high energy costs for electricity and fuels, and poverty, homelessness, and a housing affordability crisis already impacting the Golden State.
The growing homelessness and poverty populations in California gives the Governor more to talk about, while he fuels (no pun intended) energy poverty onto the California residents. The accelerating costs for electricity and fuels are also fueling (again, no pun intended) the exodus of businesses and residents out of the once Golden state.
As Governor Newsom faces a recall election, he continues to do absolutely nothing to REDUCE energy costs for the state’s residents that can least afford more expensive energy. To heal the “wound” that is causing homelessness and poverty to be on the rise, Newsom needs to DECREASE the cost of energy, not continually increase it.
The wealthy and middle class have more tolerance for expensive energy, but poverty kills and having Newsom racially biasing more expensive electricity and fuels onto the less fortunate, that voted for him, will worsen poverty. Poverty, not global warming, remains the biggest challenge. To survive the recall, Newsom needs the votes of those that he is racially biasing high energy costs upon.
This piece first appeared on CAPoliticalReview.com.
Ron Stein is an engineer who, drawing upon 25 years of project management and business development experience, launched PTS Advance in 1995. He is an author, engineer, and energy expert who writes frequently on issues of energy and economics.
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