Economic News

California Found to Have Highest Poverty Rate of Any State

They say that all that glitters is not gold — and that cliche seems to apply to The Golden State as well. According to new data from the U.S. Census Bureau and reported on by the San Diego Union-Tribune, California has the highest level of poverty among the 50 states. Moreover this isn’t the first time the state has stood atop the list.

The Census Bureau report found California’s estimated supplemental poverty rate (which factors in things like government assistance programs) to be 19% in 2017. That equates to about 7.5 million living in poverty and tops other states such as Florida (18.1%) and Louisiana (17.7%). However it should be noted that Washington D.C. actually had the highest supplemental poverty rate at 20.2%.

There is good news in that California’s poverty rate was down slightly in 2017, falling 1.4%. That also well exceeded the 0.4% drop the national poverty rate saw. Meanwhile the nationwide supplemental poverty rate averaged out to 14.1%.

One major factor in California’s poverty problems is the high cost of living throughout the state. As Public Policy Institute of California policy director Caroline Danielson explains, “We do have a housing crisis in many parts of the state and our poverty rate is highest in Los Angeles County. When you factor that in we struggle.” Similarly California Budget and Policy Center senior policy analyst Sara Kimberlin said, “A really key reason why California’s poverty rate is so high is that we have very high housing costs in many parts of the state. And even in areas of the state where housing costs are not as high, many people struggle with high housing cost burden.”

Adding to the problem, the Union-Tribune reports that median household rents swelled 13.2% between 2006 and 2016 while full-time worker earnings only increased by 4.1% during that same timeframe. The Southern California housing market also saw median home prices reach a new high of $536,250 earlier this year.

What’s also concerning about California’s continually high poverty rate is that other aspects of the state’s economy have been performing quite well. Public radio station KPCC notes that three million jobs have been created in the state since 2010, leading unemployment to reach record lows. In terms of size, California also passed an interesting milestone earlier this year, overtaking the United Kingdom to theoretically become the world’s fifth largest economy if it were its own country. Given that size, solving California’s poverty issue is made all the more complicated. Plus, even though it seems clear that housing costs are a key part of the problem, there’s no clear fix or magic bullet on that front that can turn things around. As a result, it wouldn’t be surprising to find Calfornia at the top of next year’s report — although, hopefully, it will do so with a lower overall rate.

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