RICH-POOR GAP GROWING FAST : CALIFORNIA PACE OUTSTRIPS THAT IN REST OF U.S.

Byline: Dawn Yoshitake Daily News Staff Writer

California's gap between the rich and the poor is widening at a faster pace than elsewhere in the nation, according to a report released today by the Public Policy Institute of California.

The report, like others released this year on income distribution among Americans, found the rich are getting richer and the poor aren't improving their financial wealth at a similar pace.

``Since 1987, the gap in California has expanded faster than other places in the nation,'' said Deborah Reed, author of the report.

Californian's poor - when comparing the economy's robust years of 1969 and 1989 - posted income declines of 7 percent, while nationwide, the poor had a 7 percent increase.

Men earning an annual income of $6,000 composed the 10th lowest percentile of the population and were considered part of California's poor. The category for men was the most disparate of the study.

Meanwhile, the state's rich saw their incomes rise 31 percent during the same period. And nationwide the incomes rose 42 percent. Males earning $65,000 annually represent the state's top 10th percentile.

``California's recession may have contributed to the inequity,'' Reed said. Cuts in defense spending, a decline in residential building, a fall in the region's aircraft orders and reduction in spending relative to income could have all contributed to the growing disparity, she said.

``The national trend is there is more demand for high-skilled labor and less for lower-skilled labor. This is why wages are falling,'' she said.

As lower-skilled workers find manufacturing and production jobs harder to secure, they may move into the service industry, which tends to pay less.

But although the income gap between the rich and poor has grown fastest in California, the state does not rank dead last in having the widest spread between the two economic groups.

Mississippi and Louisiana share the rank of having the widest disparity, followed by Texas, New Mexico and New York. California ranks fifth.

The Public Policy Institute, a San Francisco-based nonprofit research group, compiled its report from household and family income data gathered from 5,000 Californians by the U.S. Census Bureau between 1968 and 1995.

Along with income, the salary and hourly wages of men and women were used in the report, Reed said.

Lynn Karoly, a senior economist at the RAND Corp. research firm in Santa Monica, said the California report was consistent with the national results found in her March income distribution report.

The RAND report also found that the rich were getting richer and the poor were far behind in keeping up with a similar growth rate.

``It's not surprising that California is experiencing the same pattern,'' she said. ``It's very consistent with the work I have done, and it'll be useful to have a perspective of how California has fared.''

Reed, however, was surprised by the ability of California to follow the income disparity growth for a number of years, up until 1987. And she was surprised that men in the high-income levels never increased their earning power by more than 10 percent over two decades.

Meanwhile, those who work and have researched the poor said the results will not likely cause outrage among that group.

``You would think there would be more outrage and a rallying point for reform, but there hasn't been a strong voice among organizations that provide for people on the edge,'' said Valerie Crooks, a sociology lecturer at Mount St. Mary's College in Los Angeles.

She added the state's conservative administrations have chipped away at services designed to aid the poor.

Meanwhile, Marianne Haver Hill, executive director of Pacoima-based Meet Each Need with Dignity social services agency, said the disparity is nothing new for the community she serves.

``The poor will say, it's OK, I know it, but I'm so overwhelmed with my life that a little bit of bad news doesn't affect or change what is happening to me,'' Hill said. ``Let's hope that the rich who get richer will share some of their wealth with those in society who are struggling.''