Report

California’s Official Poverty Rate Declined in 2016, but Federal Proposals Could Increase Economic Hardship

State and National Leaders Must Do More to Promote Economic Security and Opportunity

New Census figures released today show that millions of people in California continue to struggle to get by on extremely low incomes in spite of our state’s recent economic gains. More than 5.5 million Californians, including almost 1.8 million children, lived in poverty in 2016 based on the official poverty measure. In addition, poverty remained more widespread last year than it was in 2007 when the national recession began. Specifically, 14.3 percent of Californians had incomes below the official poverty line in 2016, down from a recent high of 17.0 percent in 2012, but still well above the state poverty rate in 2007 (12.4 percent). Also, roughly 1 in 5 California children lived in poverty last year (19.9 percent), down from a recent high of 23.8 percent in 2012, but still well above the child poverty rate in 2007 (17.3 percent).

The latest Census figures also show that there are stark differences in people’s economic well-being across California’s counties. The 2016 official poverty rate ranged from a low of 6.5 percent to a high of 25.6 percent across the counties, while the official child poverty rate ranged from 5.2 percent to 37.9 percent. More than 1 in 5 people lived in poverty in nine counties, most of which are in the Central Valley (see Map 1). Additionally, more than 1 in 5 children lived in poverty in 16 counties, including six counties — again, most in the Central Valley — where over 30 percent of children were in poverty (see Map 2).

Map 1


Map 2

Download the data for the maps above.

Although the Census figures published today show that poverty remains high, they understate the extent of hardship in California because they reflect an outdated measure of poverty. Census figures released earlier this week based on an improved measure — the Supplemental Poverty Measure (SPM) — which accounts for the high cost of housing in many parts of the state, show that roughly 8 million Californians per year, 1 in 5 state residents (20.4 percent), could not adequately support themselves and their families between 2014 and 2016. Under this more accurate measure of hardship, California continues to have the highest poverty rate of the 50 states.

The new Census poverty figures underscore the need for state and national leaders to do more to ensure that all people can share in our state’s economic progress. Specifically, policymakers should:

  • Reject steep cuts to economic security programs that help families make ends meet and get ahead. A majority of adults will experience economic hardship for at least one year during their prime working years, and nearly half will turn to a major public support, such as SNAP food assistance (CalFresh in California), to get back on their feet. These supports not only lift millions of Californians out of poverty each year, but also help children succeed over the long-term, according to research. Yet federal policymakers have proposed slashing critical supports that promote economic security and opportunity. If enacted, these cuts would drive California’s already high poverty rate even higher and threaten the future of our state’s children. People in communities all throughout the state would likely be harmed.
  • Help families afford decent housing. With housing costs far outpacing many families’ earnings in recent years, it has become increasingly challenging for people with low incomes to keep a roof over their heads. Over half of California renters are housing “cost-burdened,” meaning that they pay more than 30 percent of their income toward housing, and nearly 30 percent are severely housing cost-burdened, spending over half of their income on housing. Since housing costs are most families’ biggest expense, addressing the housing affordability crisis is key to broadening economic security in California. The Legislature is considering a package of bills that would take important first steps toward addressing this crisis through policies that are designed to increase housing supply, including production of affordable units. Given the large scale of the housing crisis, additional strategies outside of the housing arena will also continue to be critical to help families with low incomes pay for basic necessities like housing.
  • Make sure workers earn enough to support themselves and their families. Most families in poverty work, which means that low pay and not enough work hours are key barriers to economic security and opportunity. California has recently made important strides to bolster workers’ economic well-being. For example, the state last year committed to gradually raise the state’s minimum wage to $15 per hour by 2023, and the lowest-paid workers in our state have already seen their hourly earnings increase significantly. California also created and then subsequently expanded the California Earned Income Tax Credit (CalEITC) — a refundable state tax credit that helps low-earning workers pay for basic necessities. Policymakers could build on this progress by increasing the size of the CalEITC and making sure that workers get the full benefit of the rising minimum wage by instituting practices that help part-time workers access additional work hours.