Today saw the release of the jobs report for March. California’s March unemployment rate was 8.1 percent, unchanged from February. Employers in California added 325,100 jobs over the past year–the largest increase in the nation. This is encouraging news for state residents who live near the bottom of the income ladder because, for a variety of reasons, workers in this category tend to be most affected by economic downturns.
Federal and state safety net programs target low-income families, and our work has shown that these programs play a major role in mitigating poverty. But a closer look shows that earnings from employment—not support from the social safety net—are the predominant source of income for working-age Californians living in poverty. Among poor adults with children, after-tax earnings made up 74 percent of family resources in 2011 (when the California unemployment rate was much higher than it is today, averaging 11.8 percent). In dollar terms, this translates into annual family earnings of about $22,200. For poor working-age adults with no children, earnings made up 69 percent of resources on average, or $10,400 (the much lower amount in part reflects the typically smaller family size of this group of adults).
Regionally, across California’s three most populous counties—Los Angeles, Orange, and San Diego—earnings made up between 75 and 82 percent of resources for poor adults with children. For those without children, earnings were 70 to 74 percent of resources. In California’s Central Valley, an economically struggling region of the state, earnings still made up the majority of family resources for poor working age adults: 59 percent for adults with children and 62 percent for adults with no children.
Although similarly detailed statistics for 2014 are not yet available, we can expect that earnings play at least as large a role in the resources of California’s poor today, now that the economy is on the upswing.