California’s 19% poverty rate, though improved, ties state for first in U.S.
Nearly one in five Californians still lives in poverty despite the state’s vigorous recovery from the Great Recession and its low unemployment rate.
The latest numbers, a reflection of the state’s high housing costs and low wages, show 19 percent are poor, some 7.5 million people. The calculation, released Wednesday by the U.S. Census, represents a 1.4 percent improvement over last year.
California is statistically tied for first with Louisiana and Florida as having the highest poverty rate among the 50 states. Nationally, 14.1 percent of Americans are poor.
The agency’s Supplemental Poverty Measure is considered to be the most accurate yardstick because it takes into account the local cost of living and benefits from government safety net programs.
In the Los Angeles-Long Beach-Anaheim metro area, renters with an income of $34,308 and homeowners with a mortgage earning $34,424 were deemed below the poverty line.
In the Riverside-San Bernardino-Ontario metro area, the equivalent numbers were $29,038 and $29,128, respectively.
“High housing costs are a key driver of why so many are struggling,” said Sara Kimberlin, a senior policy analyst at the California Budget & Policy Center, a Sacramento think tank, pointing to a “mismatch between higher housing costs and wages not keeping pace.”
Median household rents in California rose by 13.2 percent from 2006 to 2016, while median annual earnings for full-time workers grew by only 4.1 percent over the same period, according to inflation-adjusted numbers in a report by the budget center.
“Wages for workers in the middle and bottom range have been relatively flat,” Kimberlin added. “We’ve mainly seen increases for those at the higher end.”
California’s jobless rate stood at 4.2 percent in July.
Although attention often focuses on high rents in coastal areas, the report noted that in areas where housing is cheaper, wages also are lower. Statewide, more than a third of households pay more than half of their incomes toward housing.
National programs such as tax credits, food assistance, disability benefits and Medicaid (known as Medi-Cal in California) play a crucial role in reducing poverty, the budget center noted.
However, a proposal before Congress to slash food assistance, known as CalFresh in California, and efforts to reduce health insurance coverage under the Affordable Care Act could thwart anti-poverty efforts, the group said.
Thanks to the ACA, also known as Obamacare, California’s uninsured dropped to 2.8 million from 6 million. But progress has slowed, with the portion of uninsured residents dropping to 7.2 percent from 7.3 percent, a far smaller decline than the last four years.
“Congress is making attempts to slash federal funding to Medicaid and shift costs to states,” said Scott Graves, research director of the budget center. “A drip-drip-drip of federal actions is taking a toll on the ability to plan for the future and invest in healthcare. Whether the ACA and Medicaid remain intact will depend on the outcome of the November elections.”
Meanwhile, California lawmakers have enacted new laws to boost affordable housing. And two November ballot measures would address housing: Proposition 1 would approve a $4 billion bond to fund affordable housing construction and rental and home loan subsidies; Proposition 2 would allocate a portion of mental health funds to house the homeless.
State lawmakers have also expanded the California Earned Income Tax Credit, building on the federal EITC which gives tax refunds to poor families. Some 1.4 million California families claimed more than $300 million under the program this year.
However, Joseph Sanberg, founder of CalEITC4Me, a public-private partnership that promoted the expansion, said “California’s poverty crisis is even worse than the new census data shows. Some cite high housing costs as the culprit. But just as big a problem is that too many California jobs pay too low wages. Nearly 3 of 10 workers in California earn less than $12.50 per hour.”
The Supplemental Poverty Measure report released Wednesday, Sept. 12 did not calculate poverty down to the county and city level — numbers which will be released later this year.
A more basic census measurement, which does not account for the cost of living and safety net programs, pegs California’s poverty level at 13.4 percent, considerably below the 19 percent which weighs those factors.
That more basic analysis, released Thursday morning, includes local numbers. It shows that Southern California counties since 2007 largely followed the state’s arc of higher to lower poverty levels as residents weathered the Great Recession.
Still, the number of poor remains higher than it was before the economic crisis. Last year, about 2.5 million people in Los Angeles, Orange, Riverside and San Bernardino counties lived below the poverty line compared with 2.2 million in 2007 before the recession hit.
Poverty rates in the four counties have fallen over the past four years yet remain 16 percent higher than in 2007, exceeding a 6 percent population growth over 10 years.
San Bernardino County’s poverty rate in 2009 surpassed Los Angeles County’s and peaked in 2014, when one in five people lived in poverty. The rate has since eased but remains the highest in the Los Angeles region at 16.2 percent last year.
The basic poverty measurement varies from year-to-year. In 2017, a person under 65 who made less than $12,752 was considered impoverished; for a family of two adults and two children, the threshold was $24,858.
Statewide last year, nearly four in five working-age people in poverty were employed, the census reported. Two in three poor adults had a high school education or higher.