Of the millions who live here, only a handful of Bay Area residents have become multimillionaires writing best-selling software programs, inventing highly sought after hardware products, or launching successful start-up companies. Nevertheless, the region boasts the highest household income in California. In 1995, the median household income in the Bay Area far exceeded that of Southern California, according to the California Department of Finance. However, the income gap between the most and least affluent was also wider in this region. As household income continues to rise, that disparity will grow.

Take Oakland and Atherton, for example. The ratio of 1995 average household income in Atherton to that in Oakland was 6 to 1. By 2020, it is projected to spread to 8 to 1. Although the scale is smaller, the pattern is the same between Tiburon and South San Francisco. In 1995, the average income in Tiburon was 2.5 times that of South San Francisco. By 2020 it is projected to grow to 3.5 times. The bifurcation of income and the shrinking of the middle class—phenomena that are occurring worldwide—are, in large part, due to changes in the labor market. Wage distribution has become considerably more unequal. Workers at the top are experiencing real wage gains while those at the bottom suffer real wage losses.

Selected California Counties Ranked by Median Income

County
Contra Costa
Marin
San Mateo
Santa Clara
Solano
Alameda
Sonoma
Napa
San Francisco
San Diego *
L.A. Region *
* estimate

Rank
1
2
3
4
6
8
11
13
15
24
25

Source: California Statistical Abstract, 1997

Projected Mean Household Income in 2020 San Francisco Bay Area Communities. *

* Subregional Study Areas

Source: Projected 98

CHILDREN THE MOST VULNERABLE

Perhaps the most painful aspect of the growing income gap is its effect on children. U.S. Census Bureau estimates indicate that the number of children living below the poverty line is increasing dramatically. In 1993 (the latest year for which data are available), 15 percent of children under 18 in the Bay Area fell below the poverty line. The percentages ranged from a low of 8.6 percent in Marin, to 22 percent in San Francisco. In fact, that number most likely understates the extent of the problem since the Census Bureau uses a single poverty threshold for the entire country. If the poverty line were adjusted to reflect the Bay Area’s high cost of living, the number of children living in poverty could double.

The widening income gap raises ethical as well as economic concerns. According to the UCLA Center for Policy Research, approximately one in four children living near or below the poverty line in California do not have health coverage. These children are less likely to get timely treatment for infectious or chronic diseases that can lead to serious medical conditions, the costs of which are borne by society as a whole.

Percentage of Bay Area Children Less Than 18 Years Old Living Below the Poverty Line in 1993

{Children Living Below Poverty Line in 1993}