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ing the same period, income of the middle fifth of taxpayers rose 9.3 percent.
California households are losing ground compared with their counterparts elsewhere. A California household in the middle of the scale saw inflation-adjusted income from wages, investments and other sources grow 3.1 percent between 1989 and 2005. Nationwide, income for a typical household rose 5.4 percent.
Jobs are growing at the top and bottom for many reasons. But those factors can be summed up in a word - globalization. California lost 464,700 manufacturing jobs - many of them paying middle-class wages - between 1990 and 2006, much of that work moving overseas.
Meanwhile, the service sector boomed. The category includes low-paid jobs, such as retail clerks, and well-paid jobs, such as lawyers and accountants. The California employee head count of Walgreens, the rapidly expanding drug store chain, surged to 14,900 in August 2007 from 8,000 five years before, a company spokeswoman said.
Other trends are intensifying the income gap. California has lots of immigrants willing to accept low-wage jobs. Fewer of the state's workers belong to trade unions, which historically have given workers bargaining power.
An increasing proportion of the nation's income is going to corporations, which benefits households that invest in stocks and bonds. And federal policies have reduced the tax burden on upper-income households.
Education is the main factor separating winners and losers. From 1979 to 2006, California workers with bachelor's degrees saw real wage gains of 19.8 percent. Wages of workers with master's degrees or higher jumped 34.4 percent. But high school graduates' wages fell 4.4 percent after adjusting for inflation, while the wages of those who did not graduate high school plunged 23.7 percent.
Some experts believe California is losing middle-income jobs because of the high cost of doing business and public policies that drive employers out of the state.
Many of the state's middle-income manufacturing and service-sector jobs have moved to states such as Arizona and Texas, where wages are lower and government policies friendlier to business, said Joel Kotkin, an expert on California's cities and a presidential fellow at Chapman University in Orange.
The budget project's report "didn't deal with infrastructure, didn't deal with competitiveness," Kotkin said. "You have to look at tax climate and regulatory climate. Business climate matters in terms of job creation."
Of course, Steven Bustin and Tamara Johnson aren't bits of data, nor do they want to be poster children for California's rich and poor. Neither fits stereotypes of suburban affluence or inner-city poverty. Still, both live lives that are, to a very considerable degree, reflections of the means they have at hand.
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