California’s high poverty rate, low wages and frayed public safety net require a new “social compact” between workers, business and government, according to a report by a blue-ribbon commission that highlights the state’s widening inequality.

In a report released Tuesday, the Future of Work Commission, a 21-member body appointed by Gov. Gavin Newsom in August 2019, laid out a grim picture of the challenges facing the world’s fifth-largest economy, even as it acknowledged the Golden State’s technology leadership, its ethnically and culturally diverse workforce and world-class universities.

“Too many Californians have not fully participated in or enjoyed the benefits of the state’s broader economic success and the extraordinary wealth generated here, especially workers of color who are disproportionately represented in low-wage industries,” the report says.

California has the highest poverty rate in the country when accounting for the cost of living, 17.2%, according to the report. Since 2012, wages in the state grew by 14% while home prices increased by 68%.

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