Fact Sheet

A Better Measure of Poverty Shows How Widespread Economic Hardship Is in California

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The federal Supplemental Poverty Measure (SPM), which improves on the official poverty measure (see note), shows that:

  • 1 in 5 Californians (20.6%) struggle to afford basic necessities, up from 14.9% under the official poverty measure.
  • Nearly one-quarter of children (23.8%) live in families struggling to get by — a larger share than for adults regardless of which poverty measure is used.
  • Seniors are nearly twice as likely to lack adequate resources under this more accurate measure.

chart-1-spm-v-opm-by-age-2-01

 


  • 1 in 4 black Californians (25.1%) and 3 in 10 Latinos (30.4%) are struggling financially based on the SPM (see chart below).
  • Black Californians and Latinos are more likely to face economic hardship than whites, regardless of how poverty is measured.
  • The share of Latinos struggling to get by is 9 percentage points higher based on this better measure of hardship.

chart-2-spm-v-opm-by-race_eth-expanded-2-01

 


  • One-third of Latino children (33.2%) live in poverty based on the SPM, compared to 29.7% under the official measure (see chart below).
  • Over one-quarter of black children (25.7%) live in poverty based on the SPM. Although this is unacceptably high, it is nearly 8 percentage points lower than the official poverty rate (33.5%) due to the impact of public supports like CalFresh food assistance and housing assistance.
  • Latino and black children are more than twice as likely as white children to live in families that are struggling to get by.

chart-3-spm-v-opm-by-race_eth-kids-expanded-2-01

 


  • The share of seniors struggling to make ends meet is substantially higher under the SPM (see chart below).
  • Nearly one-third of Latino seniors (32.4%) and nearly one-quarter of other seniors of color (23.7%) struggle financially.
  • Seniors of color are more likely than white seniors to live in poverty regardless of which measure of hardship is used.

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Note: 
The SPM is a better measure of economic hardship than the official poverty measure because it:
1) Better accounts for differences in the cost of living by establishing different poverty lines within each metropolitan area and for all non-metropolitan areas within a state combined for people who rent their home, own their home with a mortgage, or own their home without a mortgage;
2) Factors in a broader array of resources that people use to make ends meet by adding to people’s incomes the value of non-cash benefits, such as food and housing assistance, as well as personal income tax credits, including the Earned Income Tax Credit; and
3) More accurately estimates people’s disposable income by subtracting from income the cost of basic expenses, including work-related expenses, such as child care, and out-of-pocket medical expenses.
Three years of data were pooled together to increase the reliability of the estimates for demographic groups based on small samples, such as seniors of color.