welcome to "beyond the headlines," i'm cheryl jennings. today we're going to talk about the widening gap between the rich and poor. middle-class has shrunk the lowest level in 30 years. that is by a recent study.

mark matthews filed this report in december. >> reporter: talking with the shoppers around union square, everybody knows someone to be hit by the recession. >> kind of breaks your heart to see someone lost their job in their 50s. >> state's middle-class has some lung to 48% of the population, down from a high of 60% in the 1980s. >> the recession exacerbated the long term trend and now we're at a new low. >> reporter: she co-authored for the cpic and she told staffers that the recession has hurt all income groups but the wealthy not as much. poorest lost 21% of their income wealthiest, just 8%. >> the gap between high and low incomes as we measure it is twice what it was in 1980. >> the gap is growing because

the middle-class is underemployed. sandy is one of those californians. >> i was temporary on and off. so i have less money. i don't have a permanent job right now. >> reporter: do you know a lot of people in the same boat? >> yes, i do. >> they recommended job creation will be a bigger help than wage increases. globalization and automation have precipitated a long term decline in american manufacturing. it's not apparent that those manufacturing jobs are coming back and he says the biggest factor for increasing income is education. >> by promoting education, we can do something to try to ensure that economic opportunity is available for all workers. >> cheryl: joining me in the studio is economist sarah bohn. she is a policy fellow at public policy institute of california and she co-authored a study called "the great depression and distribution of income in

california." thank you for being here. the study is so impressive. why did you do it? >> as you know, middle and low income families have been struggling for a long time, not just because of the recession but over the decades. we wanted to quantify how family income was faring in the state of california and in particular what the recession did to impact the distribution of income. we found there were serious impacts. as the study noted reduced living in california with size of the middle-class is the smallest in 30 years and the gap between rich and poor and families in help twice as much it was in 1980. >> reporter: this must have been a monster task for you? >> we used publicly available based on surveys from census ces

bureau. we got the data and over the course of about a year and a half, we tried to arrive at the metrics that were rigorous and really described how families were doing. >> cheryl: get to back something you said, california's middle-class is less than 50% for the first time in 30 years, how do you measure that? >> middle-class, we want to be very precise in our study what we're talking about. we just look at one dimension. we look at family income. we try to measure families over time to see based on a set kind of economic well-being, how many families in california can be considered in the middle range over time. then we track that. that is how we arrived at the striking number. our definition if a family is on

four is earning about $44,000 and $155,000 in 2010 they are considered in the middle income group. that sounds like a wide range but it encompasses less than 40% of the families. >> what is the danger of that? >> here is one reason that economists think the middle-class is important to our economy. that is consumer demand drives a lot of our economic growth in the u.s. demands for goods and services and the middle collaborating makes up the bulk of that. because middle income families have been hit by the recession they are not demanding the goods and services they were before the recession. that is why we're in slow recovery effect. >> cheryl: you talk about education helping to close the gap? >> i think that is one of clear ways we know through public policy to ensur that

eco opportunity is share the costs of income distribution. that is really one of the keys that, the data we find. so the gap and the shrinking middle-class is extreme. it raises questions about how economic opportunity is shared across the income distribution. what we can do to ensure across the life for adult workers and young people, to ensure that all those groups can attain high education and can help them get the good job. >> cheryl: thank you so much. a lot of information. thank you so much for bringing this to us. we do have to take a break. when we come back. we're going to learn about the tale of a people from silicon valley. stay with us. [ female announcer ] there's surprising news about whole grain

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>> cheryl: welcome bashing. today we're talking about the widening gap between the rich and poor and shrinking of the middle-class. in the studio is carol leigh hutton, the president of united way silicon valley. partnered with the american human development project.

carol leigh. thank you for being here. tell us about the report. >> portrait of california makes clear the stark distinctions in silicon valley that are living in the margins, terribly challenged and other folks when we think about silicon valley. we think of it as great wealth. it's also a place of great challenge and great hardship. >> cheryl: we have some slides that talk about what you found. can we put those up on the screen. it's the will of two silicon valleys. >> when you think about children living in poverty, the fact there are children living in poverty poverty in silicon valley is hideous. but 21% in north san jose area, 28% of the kids are living in

poverty versus 3% of the children who n a north santa clara county around the city of palo alto. sharp distinction in and of itself, children in poverty. unacceptable. >> cheryl: seniors? >> seniors another harsh reality. why do we have seniors living in poverty in silicon valley, 16% in one cluster living in poverty when we know we have the means to do better than that in silicon valley. >> we have is some more slides. >> clearly education, gateway to opportunity and without it you won't have the self-sufficient at this si. 39% of the adults in one east san jose census cluster, 100,000 people, 39% don't have a high school diploma.

only 3% and much more affluent community. >> graduate and professional degrees again, if you don't have access to additional education, 40% of the palo alto cluster and only 3% in the other cluster. >> cheryl: so silicon valley jobs in management? >> 3% are developed in the east san jose cluster is working in management whereas 23% in the cluster are working in management. clearly they are more likely to be able to give their families economic stability. >> cheryl: one of the things, it often goes unnoticed between the two silicon valleys. why don't they know about it. the ones that have the money? >> so many comb come to silicon valley, they come to go to stanford, they join a tech firm.

they live and work in an area that does not see areas of need. they are really unaware and they don't think about the need there is that need in silicon valley. people are frequently surprised about the economic realities in the other silicon valley. that is really one of our biggest challenges. >> cheryl: you woke me up on this. i'm very familiar with 211? >> 211 is a critical connection. there the are thousands of services that are designed to help people. 211, simple dial or online, access to help that people need is critical. one of the most critical pieces of 211 is building the awareness that folks know they can get help whether it's getting food on the table tonight or getting day care for a senior that may have alzheimer's. you have to get them help. >> cheryl: it's hard to find if

they are struggling? >> and the difference between basic search engines and 211 is called by a trained specialist in living human beings. no recordings. jaws person who can do the reach and get you the necessary referrals. >> cheryl: what can our viewers do to help? >> first of all they can volunteer. we use volunteers for everything we do. to help early grade readings because it's foundational to later in life success. high school graduation and the opportunity to get an income sustaining job. they can volunteer to be credit, to improve fico scores on so they can get access to financial sources. they can become advocate. we need people to contact their elected officials and help with public policy matters and they can give. all this work takes money.

>> cheryl: that is the best. thank you for the work you are doing. when we come back, we're going to hear in silicon valley community foundation. stay with us.

>> cheryl: welcome back to beyond the headlines, we've been talking about our shrinking middle-class and the tale of two silicon valleys. here with me in the study is

emmett carson, the ceo of silicon valley community foundation. i'd love to learn more what you do. >> we are a collection of some 1600 individuals, families and corporations. we aggregate the resources for investment purposes and make recommendations about worthwhile causes within silicon valley but also around the world to make things better. >> cheryl: let me talk about that, but obviously you studied the recession and a huge gap. what are you are seeing? >> we are seeing a shrinking middle-class. community foundation issued a report less than a month ago you see the middle-class shrinking. we have seen a 31% in school children, we are putting a squeeze.

we're finding that increases in food assistance has gone up significantly at the food shelters. over five years we've btd $8.5 million 20 to food and shelter organizations. >> cheryl: and to think somebody in this rich area could go hungry? >> it happens every day. increases in homelessness and you see increase where families are living out of campers because of extraordinary foreclosure rate. >> cheryl: some of the things that are contributing to this is in the public sector? >> what we're seeing some of the inability to respond is because we are no longer appropriately finance our local government or county government. for example, one of the things that we believe that needs to be talked about is prop 13. i understand the controversy around raising prop 13, but as a

structural matter, prop 13 is giving us less money today than it used to. because of the housing crisis, the median home price has decreased, as a result we locked in the low prices from the peak which means we'll get less revenue which results in places like san jose cutting 50% youth and senior programs. >> cheryl: you worry about the people in those homes, elderly in those homes and bigger increase? >> you don't necessarily have a bigger increase. but the houses that are being bought by new owners at historic lows that will result in far fewer resources. elderly people that are staying, they aren't effected. >> the kinds of jobs that need to be created? >> if you think about a community, needing jobs at every level. we need people who can cut the grass. we need people who can work in

the hospital. we need pharmacists. we need an ecosystem, we need jobs at each one of those levels and we need them at incomes that can. you can't find plumbers and electricians and find school teachers. >> cheryl: part of the middle-class? >> part of the middle-class that is shing sh rink go. we need houses at each one of those levels and discussion within our community what resources do we want to provide and structural ways we're going to tax ourselves to provide those goods and services. >> cheryl: until those things are fixed we have you to help and tell me about the granted process? >> we are working on food and shelter, education over five years we have provided afterschool programs for some 2500

we're working on issues such as immigration, how do we integrate immigrants better into our communities. one of the things that we have to do is come up with a process that allows those that have resources to be more engaged in the community. the community foundation is a way for people to do that, to work with others, to learn with others and work on the most pressing issues. >> cheryl: how beach you? >> it's silicon valley cf.org. we would love. >> there is on the screen in case you missed it. thank you so much. >> we do have to take another break but we're going to meet a san francisco organization helping to bridge a digital divide. stay with us. we'll be right back.

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between the wealthy and low income. local organization in san francisco called caminosworkinge digital divide for the latino community. and her said hernandez and leo sosa. tell me about caminos, what does it do? >> it's an organization that was founded 13 years ago. the mission is to help immigrant women that are coming into the city to learn about literacy in digital devices. we have numerous programs throughout the day where we have women of all ages from young to very old. >> cheryl: why did you choose immigrant women? >> in living in hispanic community, the woman and mother

is pillar of the family. there was a need for the mother, pillar of the family. children ride into the public school systems and go on their own. so the women needed to get help to build a better life for themselves and their children. this is what we saw where the need was. especially with it. hispanic community is being left behind. >> cheryl: you are making a big difference. >> the caminos technology program, it allows young people between the ages of 16 to 19 learn technical skills. our curriculum focuses on computer repair, job preparation skills and literacy skills. the idea is to help that

particular gap that is undecided what they want to do after they finish high school. my experience, we need to take advantage of helping youth in the latino community, especially young latinos need to understand technology, it's a great resource. >> cheryl: you have an event coming up? >> we had a great event, tuesday where we used mission tech which is part of caminos but we're going to offer programs for students mercedes was talking about earlier. we're preparing for the next technology ambassadors for the 21st century. last exciting thing about this program we offer microsoft certification for the youth population. imagine what can do, a lot of kids spoke about the gap between education. we are creating that type of

avenue and career path. >> and mission tech? >> mission tech, its computer repair shop that provides low prices for the community. we take donations from computer, local ceos and families might discard. we take those computers and we allow young people to refurbish them and then bring back to the shop and sell them at a low cost. >> cheryl: you take donations? >> anybody that is interested in bringing a young computer that can build from scratch, that will help a family get connected to the internet. that is how we break the digital divide. >> cheryl: mercedes i know you have incredible success stories? >> last year, we trained over 1700 women. >> cheryl: women? >> 1700, right.

we have programs that run every ten weeks, we charge only $25, it's really free. but we also do workshops and identity theft on computers, learning how to do facebook, learning how to tweet. we have a number of things we're doing and as you mentioned we are now a certified site of microsoft office specialists. we're the only ones in the agencies that are doing that in san francisco. our programs we're doing is bilingual. we have english and all ages. we have program for diabetes, for women to learn to research diabetes on the computer. these are programs, we're really serving the community. >> cheryl: if people want to get in touch with you it's pretty easy.

415-40-6820. >> and we're at 19th and mission street. we'll post all that information our website. thank you for junior success. it's such an inspiration. >> cheryl: we are out of time. a big special thanks to our of our guests for joining us. that is it for this edition of "beyond the headlines." we have information all available to you on our website. find us on facebook on abc7 community affairs and you can follow me on twitter. i'm cheryl jennings. thanks so much for joining us. have a great week. bye for now. ♪