The Census Bureau recently released updated income and poverty statistics for the years 2015–2017 combined, including information on the Supplemental Poverty Measure (SPM) for states. The SPM updates official poverty statistics, which are released annually, by accounting for the varying cost of housing across states and the impact of key social safety net programs like federal and state Earned Income Tax Credits (EITCs). According to the SPM, California continues to have one of the nation’s highest poverty rates, neck-and-neck with Florida (18.1%) and Louisiana (17.6%). While California’s poverty rate for 2015–2017 was 19%, the national poverty rate was much lower, at 14.1%.
The California Poverty Measure (CPM), a collaborative effort by PPIC and the Stanford Center on Poverty and Inequality, provides additional detail needed to understand our large, complex state. It takes into account both the varying cost of living and the poverty-mitigating role of social safety net programs like the EITC and CalFresh within different regions of California. PPIC published CPM estimates in July indicating that 19.4% of Californians lived in poverty in 2016. Poverty rates are highest in certain coastal areas, including Los Angeles County, where the mix of the high cost of housing, employment opportunities for low-skilled workers, and access to large-scale social safety net programs create particularly challenging circumstances.
Despite the important role of social safety net programs, employment is a key factor in determining poverty status. Adults working full time and for the whole year have a poverty rate of just 8.3%, while nearly a quarter (23.5%) of those working less are in poverty. At the same time, employment does not eliminate poverty: 44.6% of working adults in poverty are actually working full time, year round.
What can policymakers do to improve the situation in California? The good news is that there are diverse opportunities to address poverty. Moderating housing costs, supporting proven employment and training programs, and vigorously supporting social safety net programs all offer opportunities to improve the well-being of disadvantaged Californians.