We’re afraid in California. Very afraid. And according to a new study, that’s because nearly one in four Californians experienced large economic losses in 2010. This is what the Rockefeller Foundation and a team of researchers from Yale University found, as part of an ongoing project called the Economic Security Index (ESI).
The ESI was developed using publicly available data. It's defined like this:
The ESI is an annual index that represents the share of Americans who experience at least a 25 percent decline in their inflation-adjusted “available household income” from one year to the next and who lack an adequate financial safety net to replace this lost income until it returns to its original level.
For stats geeks out there, I've grabbed the calculation that underlies and ESI and put it on top of this post.
According to ESI, California isn't the most economically insecure state. In fact, we're not even in the top three. But we are sixth for economic insecurity. However, in 2010 fear in California hit a record level for the state, easily beating the national average. Those states ranked above us, interestingly, are all clustered in the South: Mississippi, Arkansas, Alabama, Florida, and Georgia.
Our ESI ranking isn't trivial. If you combine the top five in terms of their state economies, your get about $1.5 trillion — but you have another $500 billion to go before your get to California's $2 trillion. A nervous people is reponsible for a huge chunk of U.S. GDP, currently at about $15 trillion.
It’s not like we’ve ever been all that economically secure in the Golden State. Our nervousness runs higher than the rest of the country, possibly because we have more people exposed to major risk — people who don’t have college degrees, are Black or Hispanic, or a single parent.
But we can reverse this, right? Maybe not. Unfortunately, the Rockefeller-Yale study says that we’re never going to be all that secure. Our ESI has gone up a whopping 33 percent since 1986.