SAN FRANCISCO—An unprecedented sense of economic gloom has begun to settle over the nation's most populous state, according to a poll released in California today, confirming the worst fears of economists, who have been arguing for months about whether the country has entered a recession—and providing a dramatic backdrop to an expanding battle in this state's capital over a months-long budget impasse.
Fully 63 percent of California voters told the Field Poll earlier this month that they were financially worse off than they were a year ago—the first time in nearly 50 years of polling, experts say, that more than half of the respondents to a poll in this state have described their financial outlook so negatively. "These are the lowest measures we've ever seen," says Mark DiCamillo, the poll's director.
The poll was conducted, it's worth noting, during the same week earlier this month in which President Bush urged consumers to keep the faith amidst reports of a slowing economy. His words do not seem to have had the desired effect: According to the poll, 86 percent of voters here believe the state is experiencing "bad times" economically, up from only 52 percent who felt that way in December. Even before Gov. Arnold Schwarzenegger's threat this week to slash the pay of more than 200,000 state government employees to the federal minimum wage of $6.55 an hour—part of an ongoing tussle with a recalcitrant state legislature over a $15.2 billion budget deficit—more than 1 in 5 respondents told pollsters they expect things to be worse next year, the highest rate of economic pessimism since 1979.
What's most surprising about this new poll, though, experts say, is the breadth of today's financial gloom. While nearly 3 in 4 low-income residents, who have been hardest hit by climbing food and gas prices and the ever expanding housing crisis, said they were worse off than last year, a surprising 66 percent of middle-income residents report being in similar financial straits. Almost half of those with household incomes of more than $100,000 agreed.
By comparison, at the height of the dot-com bust in 2002, which affected California more than many other states, only 35 percent of people said they were worse off than they had been the year before. In 1981, when Ronald Reagan was elected president during a then unprecedented period of economic malaise, 42 percent of people in California believed their financial situation was worse than it had been the year before.
"You're seeing similar kinds of things if you look at national polls," says DiCamillo, who has been conducting the poll for 30 years. With climbing gas prices, the housing crisis, and a slow stock market, "it's been a triple whammy in the past six or seven months," he says. "But it's not just the middle class or lower-income people. Even the well heeled are reporting they're financially worse off. It's cutting a broad swath, and we've never seen anything like it."