Thursday, September 5, 2013

Just the Facts: Poverty in California

Poverty in California Sarah Bohn and Matt Levin

Poverty rates continue to soar in the aftermath of the Great Recession. After declining to a 20-year low of 12% in 2006, the official poverty rate in California spiked upward in the wake of the Great Recession: as of 2011, it was 16.9%. This amounts to more than six million Californians living in households with incomes below the federal poverty level (about $23,000 for a family of four). The Census "Supplemental Poverty Measure,” which incorporates California’s high cost of living and the effect of safety net programs such as food stamps, suggests that California’s poverty rate is even higher—23.5% during 2009-2011.

California’s poverty rate has not yet matched its early 1990s peak. Despite the prolonged impact of the Great Recession, a smaller percentage of Californians are in poverty now than during the recession of the early 1990s—in 1993 the poverty rate reached 18.1%. Given the persistently high rate and duration of unemployment in 2011, it is unsurprising that high poverty rates persisted into the recovery. But even if poverty rates start to decline as the state’s economy gains steam, they will likely be higher than they were in non-recessionary periods in the state’s past.

California typically has a higher poverty rate than the rest of the nation. For most of the past two decades, California’s poverty rate has exceeded that of the nation’s. By 2006, the two rates had nearly converged, with California’s rate declining and the rate in the rest of the U.S. rising. But during the Great Recession, the state’s poverty rate grew faster, and now California’s rate is higher (16.9%) than the rate in the rest of the country (14.7%).

Latinos and African Americans have higher poverty rates than other groups. Latinos (23.6%) and African Americans (24.2%) have much higher poverty rates than Asians (12.6%) and whites (9.8%) in California. The statewide poverty rate among Latinos living in families with a foreign-born head of household is 26.9%; for the same group outside of California, it is significantly higher (30.1%). Poverty rates increased for all racial and ethnic groups in California between 2010 and 2011.

Poverty varies dramatically in accordance with education level. In California, education has provided a buffer against poverty in the wake of the Great Recession. In 2011, the poverty rate among families headed by an adult lacking a high school diploma was 36.7%—a 5 percentage point jump from 2010. At the other extreme, in families headed by a college degree holder, the poverty rate was only 5.4%. For families in which the highest level of education is a high school diploma, the poverty rate was 19.9%.

Most poor families in California are working. The majority of poor people in California live in working families. In 37.3% of poor families, at least one family member is working full time, and in another 25.6% someone is working part time.

Poverty varies considerably across California’s counties. In 2011, the lowest poverty rate in California was in San Mateo County (7.2%) and the highest was in Merced County (30.0%). Many Bay Area counties in addition to San Mateo (Marin, Santa Clara, Sonoma, Contra Costa, and Alameda) had poverty rates below 13%, placing them in the bottom quarter of all counties. At the other end of the spectrum, several Central Valley counties in addition to Merced (Tulare, Kern, Fresno, Stanislaus, Madera, Yolo, and Butte) were in the top quarter, with poverty rates in excess of 20%. Nearly 30% of all poor people in California lived in Los Angeles County (1.8 million people) in 2011—by far the largest number in the state.


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