Why Do So Many California Workers Feel Economically Insecure?

23 January 2026
Woman with glasses, smiling, wearing black cardigan and blue shirt, against a gray background.

by Mary Severance - Public Policy Institute of California

California is an economic powerhouse, but many working Californians feel financially insecure—they struggle to pay bills, save for the future, and balance the demands of work and daily life. Why does economic security seem out of reach for so many workers, and what could be done to improve their well-being? At a virtual event last week, PPIC researchers discussed a new report that focuses on these questions.


Sean Cremin, a report coauthor, outlined the report’s key findings. “We draw on big-picture data on California’s workforce,” he said. But the report also draws from 12 focus groups convened across the state. “Our focus groups included workers who, like three-quarters of California’s labor force, are lower and middle earners—making below about $100,000 per year.”


“We were aiming to hear from people experiencing economic insecurity,” said coauthor Tess Thorman. But Thorman was struck by the similarity of the challenges facing middle-wage and low-wage workers: “To hear the same story from both income groups was a bit of a surprise.”

Workers in the focus groups were especially concerned about housing and food prices, particularly since the onset of the pandemic. As Cremin noted, “Workers making lower wages have a more difficult time adjusting to higher costs for essentials, as these make up a larger share of their spending relative to higher-wage workers.”


Indeed, higher costs force many workers to make tradeoffs. Some have to choose between working a full-time job to earn more and working part time so that they can care for children or other family members. Many have considered moving to lower-cost areas but did not want to move away from local support networks. And others described choosing between working more hours or maintaining income eligibility for safety net benefits—in particular, Medi-Cal coverage for prescription costs.


While recent inflation has heightened worker challenges, longer-term shifts in the labor market have played a major role. “Since 2000, the number of high-wage jobs in the labor market has grown by 60%, and the number of low-wage jobs has grown by 20% . . . but there has been essentially no growth in middle-wage jobs,” Cremin said.


These long-term trends, combined with recent labor market volatility and economic uncertainty, make it more challenging for lower-wage workers to improve their earnings and well-being.


Coauthor Sarah Bohn was not optimistic about the near-term economic outlook. “Inflation is tempering but remains higher than the Federal Reserve’s target of 2%—and there are questions about trade policy,” she said. “On the wage front,” she added, “when the number of job openings is not as high as it was a few years ago, it’s not an environment where employers really need to compete by increasing wages.”


Many focus group participants felt that state policymakers seeking to improve economic well-being need to better understand the experiences of lower-wage workers. As one focus group participant put it, “Until you know how hard it is to live on, like, $2,000 a month, when rent is $1,200–$1,800 and you have kids or dependents, then you can’t really conceptualize what people need.”


Credit: Why Do So Many California Workers Feel Economically Insecure? - Public Policy Institute of California


by Selene Bendeck 8 May 2026
Most employment lawsuits don’t start with dramatic misconduct or bad actors. They start with small, avoidable decisions that no one thought would matter—until they did. In my experience representing employers, the practices that cause the most damage are rarely exotic or cutting‑edge. They’re the routine, “we’ll get to it later” items: missing documentation, inconsistent discipline, outdated policies, or decisions made out of frustration instead of process. Employment law rewards preparation and punishes procrastination. The difference between a defensible workplace decision and an expensive lawsuit is often just a few steps that were skipped when things felt busy or manageable. What follows are ten mistakes management‑side employment attorneys see over and over again—and that are far easier to prevent than to defend. Mistake #1: Treating documentation like a chore instead of a shield. In the world of employment law, if you didn’t write it down, it didn’t happen. I’ve seen too many cases lost because management never documented poor performance or gave glowing reviews to an underperforming employee. Here’s a good rule of thumb: if you’re going to take an adverse action against an employee, a stranger should be able to walk in off the street, only review your documentation, and tell you why it was necessary. Mistake #2: Letting things get personal. When a manager’s frustration starts driving employment decisions, you’re headed for trouble. For example, if an employee corrects the behavior they were disciplined for and you fire them anyway without any justification, it’s going to look suspicious. Bring in another supervisor who can evaluate the situation objectively. Mistake #3: Inconsistency in how you treat employees. If I could give employers one piece of advice, it’s this: be consistent. If it’s fine for your favorite employee to come in late three times a week, you can’t fire someone else for the same thing. If you’re absolutely convinced it’s appropriate to treat an employee differently, you had better document that very carefully in writing and make sure you’ve got a policy to back it up. Mistake #4: Neglecting your handbook and policies. Think of your employee handbook as an insurance policy: it sets expectations, communicates standards, and takes away the “I had no idea” defense from employees who violate them. But it’s a double-edged sword—you need to know what’s in it and actually follow it, because a plaintiff’s lawyer will absolutely point to your own policies and ask why you didn’t. Review it annually and don’t be one of those employers whose handbook hasn’t been updated since the Clinton administration. Mistake #5: Retaliating (even when you don’t think you are). Anti-retaliation provisions are baked into virtually every discrimination law as well as many other laws. The sooner you take an adverse action after someone complains, the more it looks like retaliation. I’ve seen managers get fed up with chronic complainers, and it resulted in a huge liability for the employer. If someone has recently complained and needs to be seriously disciplined or terminated, bring in a decision-maker who has no knowledge of the complaint and let them call the shot. Mistake #6: Botching the interactive process under the Americans with Disabilities Act (ADA). When someone asks for an accommodation, the employer is generally in the driver’s seat when it comes to determining what’s reasonable, but the employer has to engage in the interactive process. The interactive process is not a one-way suggestion box—it’s more like couples counseling: if only one party shows up, nobody gets better. When an employee requests an accommodation, request appropriate medical documentation explaining how their specific limitations impact their specific job duties, and ask how long they’ll need the accommodation. If they don’t respond, follow up in writing. That paper trail will be your best friend when the employee claims you failed to accommodate them. Mistake #7: Misclassifying employees under wage and hour laws. Wage and hour law is one of those areas where employers get into trouble because they assume the answer is simpler than it actually is. Whether it’s classifying someone as exempt based on their title instead of their actual duties, or assuming a worker is an independent contractor when the law says otherwise, the consequences of getting it wrong include liability for unpaid wages, double damages, and attorneys’ fees—and it adds up fast when multiple employees are affected. Mistake #8: Ignoring the value of a good investigation. I know of an organization that tried to handle serious misconduct allegations with inexperienced consultants. It was a disaster—they ended up commissioning another investigation (with an experienced law firm) into why the first one went so poorly. Investigating sensitive workplace situations is like surgery: it’s generally not advisable to perform it on yourself. When serious allegations arise, bring in outside counsel with investigative experience. Mistake #9: Assuming “at-will” means “bulletproof.” I hear this all the time: “We’re an at-will state, so we can fire anyone for any reason.” You can fire an employee for any lawful There’s a complex web of state and federal protections you might not be thinking about. At-will employment is not a force field against discrimination, retaliation, or wrongful termination claims. Mistake #10: Waiting too long to call an employment lawyer. I know this sounds self-serving, but hear me out. I’ve seen too many HR professionals reach out to a general business attorney who mostly does real estate or contracts. That’s like suspecting you’re having a stroke and going to your family practitioner for a checkup. The half-hour you spend talking to an employment lawyer is a lot cheaper than the half-a-million dollars that can be spent on litigation. If your gut says you’ve got an employment law-specific problem, listen to it and call someone who practices in that area. Most of these mistakes come down to documentation, consistency, and early intervention. The longer you let things fester, the harder they are to fix—and the more expensive they become. Think of it this way: nobody ever called their employment lawyer and said, “I wish I’d waited longer to reach out.” If any of these hit close to home, give us a call. We’re happy to help you get ahead of the problem before it gets ahead of you.
by Selene Bendeck 15 April 2026
A Change to Existing Accommodation Laws or a Reframing of Existing Obligations
by Selene Bendeck 20 March 2026
Most employers already collect emergency contact information during onboarding. It is one of those routine HR forms that gets completed on day one and then quietly sits in a personnel file.  Until now.
by Selene Bendeck 9 March 2026
What Employers Need To Know
by Selene Bendeck 4 March 2026
Business and taxpayer advocates turn in more than 1.3 million signatures, say measure reaffirms voters’ will and protects Californians from higher local taxes amid cost-of-living crisis
by Selene Bendeck 4 March 2026
Under the Fair Employment and Housing Act (FEHA)
by Selene Bendeck 27 February 2026
FOR IMMEDIATE RELEASE California Retailers Association Launches California Retail Law Center to Address Retail’s Top Legal and Regulatory Challenges
California State Capitol Building with trees in the foreground against a blue sky.
by Selene Bendeck 11 February 2026
AI-enabled interviewing tools have emerged as a common solution for the administrative burdens associated with hiring. These tools improve efficiency, streamline operations, allow you to consider more candidates without expanding your hiring team, keep evaluations consistent across applicants, and make high-volume hiring easier. But their adoption also raises important legal considerations, including potential bias, compliance risks, and data privacy and cybersecurity obligations – all while we face a growing regulatory and litigation landscape targeting the use of these tools. This Insight reviews the most common tools being deployed by employers and their associated risks, and provides a five-step suggested plan for minimizing liability.
California State Capitol building with a large dome, surrounded by trees and a blue sky.
by Selene Bendeck 2 February 2026
Posted in Compliance and Enforcement , Fees and Penalties , Immigration and Customs Enforcement (ICE) , Legislation
California State Capitol building with white columns and dome, under a blue sky.
by Selene Bendeck 2 January 2026
A Year-End Compliance Checklist for California Employers