May 21, 2019

Why is California’s Poverty Rate So High?

“There is much controversy over poverty measures, but even putting those disagreements aside, California still has the highest poverty rate in the U.S. Why?

It is certainly not, like some conservatives allege, because our social policies are too generous. There is no evidence that a stronger safety net discourages Californians from working. Even among Californians in poverty, nearly 70 percent live in working households. Moreover, the state’s labor force participation rate is significantly higher than other states from Alabama to Arizona that offer much less generous social policies.

Rather, California has the highest supplemental poverty measure rate simply because of our highest-in-the-nation home prices. If housing prices in California were at the median seen across the rest of the United States, the state’s supplemental poverty measure rate would drop by nearly a third — to 11.7 percent from 17.1 percent. California would then rank 30th among the states based on 2015 data. This might not be surprising, as 29 percent of Californians spend more than half their monthly income to keep a roof over their heads.”

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