The August 12, 2001 article "New data prove that two-tier society is a fact of California life" by Dan Walters of the Sacramento Bee is apparently not on their site any more. I'm copying it from here because it needs to be preserved as an example of the California Establishment realizing the problems they helped create:

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Sixteen years ago, two academic researchers took note of the powerful economic and social forces that were just then beginning to sweep through California and made what many thought was a very bold, even risky, projection about the state.

University of California, Davis, economist Philip Martin and Washington-based sociologist Leon Bouvier concluded in 1985 that with the state's population expanding dramatically due to immigration, and its economy shifting from old-style manufacturing to high technology and services, seeds were being sown for socioeconomic fragmentation.

"The large increases projected for Hispanics and Asians in the labor force suggest a continuation of the emerging two-tier economy," Martin and Bouvier wrote in a research paper published by the Population Reference Bureau, "with Asians and better-educated non-Hispanic whites and blacks competing for the prestigious occupations while poorly educated Hispanics and blacks scramble for the lower status jobs."

If anything, they were too conservative. Socioeconomic change happened much more dramatically and more quickly. A severe recession that struck California in the early 1990s accelerated the decline of the old industrial base and spurred more than a million Californians to flee the state. But California's population still grew more quickly than the 1985 report projected, thanks to high immigration and birth rates, even as the white population declined faster than demographers expected.

A new batch of census data released last week is one piece of evidence to support the two-tier thesis. While California's median family income is 12 percent higher than the national median, the Census Bureau reported, the state has higher levels of poverty than the nation as a whole. And its middle class, the census data indicated, is the second smallest of any state. "We have very wealthy communities on one hand and then people living in poverty on the other," said Dara Schur of the Western Center on Law and Poverty.

Clearly, a major reason for the widening disparities is immigration. Mexico is the primary source of immigration to California, now running around 300,000 people a year, and the newcomers tend to be both poor and poorly educated. While they fill an insatiable demand for low-skill labor in California, they also create enormous burdens for education, health care and social service systems -- a conundrum that's very evident in national academic skills testing.

California was embarrassed in the early 1990s, when its students ranked near the bottom among states in the National Assessment for Educational Progress (NAEP), especially in math skills. The latest results, also released this month, indicate that despite some tiny gains, California's students are still near the bottom, with 48 percent of fourth- and eighth-graders failing to master the most basic levels of mathematical skills.

A detailed breakdown indicates that the math skills gap is the widest among poor, non-white and/or non-English-speaking students. A whopping 75 percent of African American youngsters and nearly two-thirds of Latinos failed the basic skill test, while more than 70 percent of white and Asian American students passed. The results directly underscore what Bouvier and Martin concluded in 1985 was beginning to happen in California.

California could continue to ignore the widening socioeconomic gap or it could swallow its collective pride, acknowledge that egalitarian political rhetoric is a myth and start refocusing public resources. It could, for instance, beef up schooling for poor-performing students, even at the cost of tilting away from college-bound suburban kids. It could stop treating the community college system like a poor stepchild, and it could restore the vocational classes that have been widely eliminated in favor of college-prep classes.

Those steps, and many others, would take political courage, because the greatest of California's gaps is in the electorate, which is dominated by white, home-owning and often childless voters from the upper tier.