As if it needed it, California received a fresh reminder Tuesday that despite its trappings of gourmet wealth, it is home to millions of families who struggle every day to keep a roof over their heads and food in their bellies.
United Ways of California released updated estimates of real-world poverty, which revealed that 34% of families in the state do not have enough income to cover the basic costs of living, primarily because those costs, particularly for housing, are extraordinarily high. tall.
The estimate is based on data from 2021, but there is no reason to believe that the situation has improved significantly, if at all, since then.
The federal government’s official poverty figure is strictly based on income, and California’s rate is not particularly high based on that methodology. But the US Census Bureau also has an alternate measure that includes cost of living and generally places California at or near the top of poverty among states.
United Way’s methodology is similar to the Census Bureau’s alternate poverty measure, and is also similar to the Public Policy Institute of California’s poverty and near-poverty estimates. The 34% poverty level is also consistent with the 15 million Californians who receive health care through the state’s Medi-Cal program.
In a sense, therefore, the United Ways report is simply telling us something we already know. However, its interactive feature provides important details about which communities and which demographic subgroups are most likely to experience severe economic stress in a state with the fifth, and perhaps fourth, largest economy in the world.
It reveals, for example, that rural counties and core urban areas are more likely to fall into poverty, and that 51% of Latino families have income below the “true cost measure” of what is you need to cover basic living costs. the tallest of any ethnic group.
Additionally, 68% of Californians without high school diplomas are in poverty, as are 70% of single mothers and 57% of non-citizen immigrants.
Once again, the United Way report implicitly asks what, if anything, California’s political apparatus can do about its high poverty, since the main factor is the particularly high cost of living (particularly housing ), rather than especially low income.
High housing costs stem from the chronic housing shortage in the state, and while there has been a recent increase in home construction, it is still well below the 180,000 units a year the state says is needed to close the gap.
The state has made some notable efforts to boost housing construction, primarily by removing local barriers to development, but its main anti-poverty focus has been to increase household income through intermittent programs such as increased social grants, the increase in minimum wages, the expansion of health. child care and child care services and providing earned income tax credits and direct cash payments.
However, those are generally short-term fringe benefits that rely on the state’s erratic revenue stream, rather than permanent revenue supports. There are some efforts at the state level to create a guaranteed basic income program to lift low-income families out of poverty, but the potential costs are enormous.
The United Ways study says that 3.8 million families live below their “true cost measure” for a decent way of living and would normally need about $40,000 more in annual income to reach it. Providing that supplemental revenue, therefore, would cost about $150 billion, or roughly a 50% increase in the state budget of $300 billion.
That’s not going to happen.
If California politicians want to take poverty seriously, instead of engaging in superficial virtue signaling, they will become more aggressive, even ruthless, in removing barriers to housing construction, improving educational deficiencies, and making the state more more attractive for investment that creates employment. instead of scaring away employers.