SACRAMENTO, CA — California continues to face significant levels of poverty, with the state once again having the highest poverty rate in the nation, according to a new Budget Center analysis of newly released data by the United States Census Bureau. Despite some recovery from the economic impacts of the pandemic, California’s poverty rate in 2023 remained alarmingly high at 18.9%, with approximately 7.3 million state residents unable to meet basic needs — a population larger than California’s four largest cities combined: Los Angeles, San Diego, San Jose, and San Francisco.
The data reveals deep racial disparities, with Black and Latinx Californians continuing to experience disproportionately high levels of poverty. This persistent inequity points to systemic barriers many communities face in accessing economic security and opportunity.
At the same time, the incomes of California’s wealthiest households continue to far exceed those of most state residents. The average income of the top 1% of California households was $1.2 million in 2023 — 67 times that of households in the bottom 20% and 14 times the income of median-income households. This stark divide underscores the widening income inequality across the state.
“These figures make it clear that urgent action is needed to address the persistent poverty and deep inequality in California,” said Alissa Anderson, policy director of the California Budget & Policy Center. “Unfortunately, Congressional Republicans continue to block key policies, like the Child Tax Credit expansion, that would put more money back into the hands of families to help them pay for food, child care, and housing costs.”
Proven Solutions Exist — Federal Policymakers Must Act
The pandemic demonstrated that federal and state leaders have the tools to significantly reduce poverty. In 2021, bold investments in the Child Tax Credit (CTC) and other economic security-promoting policies helped achieve a historic drop in poverty. However, when Congress allowed these policies to expire, the national poverty rate saw its largest increase in 50 years.
As Congress prepares to pass a substantial tax package in 2025, the Budget Center urges federal policymakers to prioritize expanding and strengthening two of the most effective anti-poverty tools: the federal Child Tax Credit and the Earned Income Tax Credit (EITC). These programs have been shown to lift millions out of poverty, and strengthening them would provide critical support to struggling families.
Additionally, federal leaders should enhance nutrition assistance programs like SNAP (known as CalFresh in California), which are essential in reducing poverty and food insecurity across the state.
# # #
