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Q&A: Understanding Homelessness in California & What Can Be Done

March 2023 | By Sara Kimberlin and Monica Davalos

Aerial of dense lower income housing in south central Los Angeles.

Having a place to call home is the most basic foundation for health and well-being no matter one’s age, gender, race, or zip code. But many thousands of individuals in California each year experience homelessness and its destructive effects. Polling shows that Californians continue to rank homelessness as one of the most serious challenges facing the state, and policymakers have paid increasing attention to this issue in recent years. Understanding the scale, impact, and drivers of homelessness in California can help guide effective policy solutions and action to end this crisis.

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How does homelessness affect the people who experience it?

Homelessness has devastating effects on the individuals who experience it because having a home is a basic necessity to maintain health, work, school, and dignified living conditions. Lack of stable housing seriously disrupts individuals’ ability to obtain or keep a job or to make sure that children are able to attend and focus on school. Homelessness exposes individuals to serious health risks and makes it difficult to take care of one’s health and access health care, and therefore homelessness can exacerbate chronic or acute health conditions. In fact, adults experiencing homelessness often have health problems and difficulty with daily living activities that are more typical of people 20 years older. Unhoused individuals have also faced serious health risks throughout the COVID-19 pandemic.

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This devastation to people’s lives is why homelessness in California is a crisis that requires urgent attention by federal, state, and local leaders.
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The stress of homelessness can also seriously harm individuals’ mental well-being. Research shows that the trauma of experiencing homelessness can cause people to develop mental health problems for the first time and can worsen existing behavioral health challenges. Longer time spent without a home is linked to higher levels of mental distress and more damage from coping behaviors like substance use.

This devastation to people’s lives is why homelessness in California is a crisis that requires urgent attention by federal, state, and local leaders.

How many people in California experience homelessness?

When Californians experience homelessness, urgent action is needed, because no one should be without a home. According to the most recent point-in-time data, as of January 2020 there were 161,548 people in California experiencing homelessness on a given night. The majority of these individuals – about 70% – were unsheltered, meaning that they were living on the street, in their vehicle, or in other places not meant to serve as homes. 

Another way to understand how many Californians experience homelessness is to consider how many people received homelessness services (like shelter or outreach) over the course of a full year. More than 270,000 homeless individuals across the state received some kind of services during calendar year 2021, and the total number receiving services likely increased the following year. This number is larger than the point-in-time number because many people who fall into homelessness at some time during the year return to stable housing relatively quickly, and the point-in-time count only captures the number of individuals experiencing homelessness on one night of the year.

Who experiences homelessness in California?

People of all ages and backgrounds fall into homelessness, and Californians experience homelessness in every county of the state. The majority of unhoused individuals are single adults, but an important share are also families with children and unaccompanied and parenting youth. A substantial share of single adults experiencing homelessness in California are older adults.

There are deep racial inequities in who experiences homelessness in California, with individuals who are Black facing a greatly disproportionate risk of homelessness, as well as American Indian or Alaska Native and Pacific Islander individuals. The number of Latinx Californians experiencing homelessness also increased substantially in the most recent point-in-time count. These disparities reflect the effects of structural racism and inequitable treatment and access to opportunities in education, employment, health, the justice system, and other domains.

In addition, there are disparities in experiences of homelessness by gender identity and sexual orientation. In terms of gender, the majority of unhoused Californians are male. Individuals who identify as transgender or gender-nonconforming are more likely than cisgender individuals to be unsheltered when they experience homelessness. Among youth, those who identify as LGBTQ+ are especially likely to experience homelessness, in many cases as a direct result of family rejection of their gender identity or sexual orientation.

MORE in this series

See our 5 Facts: Who is Experiencing Homelessness in California? to learn more about California’s diverse unhoused population.

What are the key drivers of homelessness in California?

Many systemic challenges rooted in classism, racism, and sexism that harm individuals and families put people at greater risk of becoming homeless at some point in their lifetime.

The severe shortage of affordable housing — particularly housing that is affordable to people with the lowest incomes — is the number-one driver of California’s homelessness crisis. For Californians with the very lowest incomes — those categorized as “extremely low-income” under the definition used for most state and federal housing policies — there were only 23 housing units that were affordable and available for every 100 renter households as of 2020. Statewide, an estimated 1.2 million new affordable homes are needed by 2030 to meet the housing needs of Californians with low incomes.

Because affordable housing is in such short supply in California, many renters with low incomes must pay much more than they can afford for housing, so that even a minor financial emergency can cause them to be unable to cover the rent and face the risk of eviction and homelessness. Black and Latinx renters are especially likely to face unaffordable housing costs, reflecting the effects of explicitly and implicitly racist policies and practices in housing, employment, and other arenas.

Other factors have also contributed to California’s homelessness crisis, including the decades-long trend of stagnant wages for lower-wage workers and past failure to fund adequate mental and behavioral health services to meet needs in the community. The shortage of deeply affordable housing, however, is a fundamental driver of the crisis.

What public systems and supports can address the needs of people experiencing homelessness or play a role in preventing homelessness?

Many different local, state and federal public systems and services intersect with homelessness in important ways. 

Nearly 1 in 8 Californians did not have enough resources to meet their basic needs, according to the most recent California Poverty Measure data. This reflects the high cost of living in many parts of the state. In addition, the share in poverty is expected to increase for 2022, as pandemic-era public supports like the expanded federal Child Tax Credit expired. For all individuals experiencing homelessness, public supports that help people meet basic needs are important both to prevent and exit homelessness. These supports include but are not limited to: cash supports like SSI/SSP and CalWORKs, refundable tax credits like earned income tax credits (EITCs) and child tax credits, nutrition assistance programs like CalFresh and WIC, and Medi-Cal health coverage.

While only a minority of unhoused individuals struggle with serious mental health or substance use disorders, behavioral health services are vital supports for maintaining stable housing over the long term for those individuals.

Among youth, abusive or neglectful family situations can cause young people to leave their homes and become homeless, pointing to a role for the child welfare system in preventing and addressing youth homelessness.

Domestic violence can also be the trigger that pushes individuals into homelessness, especially women and mothers with children. Services that directly address the experiences and needs of domestic violence survivors are important to prevent and address homelessness for these individuals.

The justice system has an impact on many unhoused individuals as well. This is both because of laws that criminalize homelessness (e.g., laws that make public camping punishable by citation or arrest) and because individuals who have a conviction record or are reentering the community after incarceration face daunting barriers to securing and maintaining stable housing. These factors compound challenges in helping individuals find safe, affordable housing.

What are effective, evidence-based ways to address homelessness? 

Extensive research shows there are several evidence-based approaches that are effective in helping people successfully exit homelessness and maintain stable housing. 

For all individuals experiencing homelessness, interventions that use a “housing first” approach have a strong track record of success. Housing first — as its name suggests — focuses on moving people into permanent housing as the first priority, before focusing on meeting other needs or connecting with other services.

For the minority of individuals who are chronically homeless and have serious physical or mental health challenges, supportive housing — or permanent housing paired with case management and support services — is an approach that research shows is effective in enabling individuals to exit homelessness and achieve housing stability. About one-third of Californians experiencing homelessness on a given night are chronically homeless with serious health challenges.

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Having a place to call home is the most basic foundation for health and well-being no matter one’s age, gender, race, or zip code.
”

Housing vouchers, shallow rental subsidies, and targeted programs for specific subpopulations  — such as veterans, homeless youth, or domestic violence survivors — are additional tools to help individuals successfully return to stable housing.

Interim housing, like motel stays, emergency shelters, and tiny homes, can also be necessary short-term strategies to get people off the street so that they are not unsheltered. These options can contribute to solving homelessness if coupled with services that focus on moving individuals into permanent housing as quickly as possible.

State funding to address homelessness has recently increased, but the number of people experiencing homelessness did not decrease. Why is that the case?

Effectively addressing homelessness requires a system of housing and services with enough capacity and investment to meet the needs of all Californians who are experiencing homelessness in every region of the state. Building that capacity requires investing in proven effective approaches at a scale that meets the need — and then providing reliable ongoing funding so that effective efforts can be sustained. Partnership between the state, federal, and local governments is important to mobilize the resources needed for impact at scale.

California first dedicated significant state dollars to address homelessness only a few years ago, and state investments have primarily consisted of one-time funding. The 2021-22 state budget first included a multi-year commitment of $1 billion annually to support local homelessness efforts, with intent to continue “based on performance and need.” In addition, there were significant investments in housing supports for special populations, such as families with children, and support to acquire and develop housing specifically to meet the needs of individuals experiencing homelessness. The 2022-23 state budget further built on these investments, including maintaining the $1 billion support for local homelessness efforts and incorporating $1 billion to expand bridge housing for individuals experiencing homelessness with serious mental illness.

These recent increases in state funding have not been accompanied by a drop in the number of Californians experiencing homelessness. Why? The COVID-19 pandemic is a key factor. Both health and economic effects of the pandemic have directly affected homelessness services and put more individuals at risk of homelessness.

At the start of the pandemic, to protect the health of vulnerable individuals experiencing homelessness — and public health more broadly — policymakers and service providers pivoted remarkably quickly to implement new models of non-congregate shelter, with California leading the way in developing innovative new approaches. Launching these new models required significant up-front investment of time and funding, which was necessary in the short-term to protect the health of individuals, and is expected to produce sustained payoff by building a safer and more effective long-term model for interim housing.

At the same time, the economic effects of the pandemic have put more Californians at risk of falling into homelessness. Since the start of the pandemic, rents have increased significantly. Record-high inflation more generally has pinched household budgets, and Californians with the lowest incomes have been hit the hardest.

Given these significant pandemic headwinds, the recent increases in state funding to address homelessness have likely played several vital roles. These include preventing many unhoused Californians from experiencing severe health effects or dying from COVID-19; preventing a substantially larger increase in the number of Californians experiencing homelessness; and building California’s long-term capacity to address homelessness more effectively.

When addressing a complex challenge like homelessness — particularly in the shadow of a global pandemic — progress takes time, and sustained commitment by policymakers is critical. Maintaining and building on recent state budget investments to address homelessness, to meet the full scale of need, can enable California to achieve a functional end to homelessness. The experience of homelessness for Californians would then be rare, brief, and non-recurring for individuals and across communities.

At the same time, the widespread shortage of affordable permanent housing continues to drive Californians into homelessness. As a result, it is also critical to invest in expanding the state’s supply of affordable housing, especially rental housing affordable to households with the lowest incomes. Both housing development and tenant-based rent subsidies can play a role in making more housing available that is deeply affordable.

Bottom line: Ending homelessness is possible, but persistence is required. There are many opportunities for the state to leverage its resources to ensure all Californians have a home.

Support for this report was provided by the Conrad N. Hilton Foundation.

Housing & Homelessness

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Introduction

Every Californian deserves a safe and stable place to call home in order to have the opportunity to live a dignified and healthy life. Yet, over 171,000 Californians were counted as experiencing homelessness in early 2022.

These Californians were either residing in shelters or transitional housing — or considered unsheltered, residing on the street, in encampments, vehicles, or other places not meant for habitation. During calendar year 2021, local homeless service providers made contact with over 270,000 individuals needing to find a home or search for other life-sustaining services — and even more were likely served in 2022.1This publication utilizes two separate sources of data for our analysis: 1) US Housing and Urban Development Point-in-Time Count which provides the number of unhoused people counted on a single night in January, and 2) the California Homeless Data Integration System through which local Continuums of Care report data to the state collected by homeless service providers throughout a year. The terms homeless and unhoused are also used interchangeably.

“Lifting all Californians out of homelessness is possible. Policymakers have the tools to support all Californians and end homelessness across the state.”

As people of all ages and backgrounds are pushed into homelessness, understanding their diverse characteristics is fundamental to effectively addressing their housing needs. Unhoused individuals require interventions of different types and at different scales to become and stay housed. Californians who are unhoused are more than their current living situation. State policymakers have a responsibility to support all Californians and persist in ending homelessness across the state.

1. Homelessness is temporary for most who experience it, but some face long-term, chronic homelessness

Most unhoused individuals experience relatively short-term homelessness (64%), but over a third (36%) experience chronic homelessness exacerbated by a disability. Individuals and families are considered homeless if they do not have a fixed, regular, and adequate nighttime residence — for example, if they are living in a shelter, vehicle, or other places not meant for habitation. Unhoused individuals are considered chronically homeless if:

  • They have a long-standing disability that significantly impedes their ability to live independently.
  • They have been unhoused continuously for a year or on at least four occasions within a three-year period.

Different interventions are typically needed to ensure individuals experiencing temporary or chronic homelessness secure and remain in housing. For the majority of unhoused Californians who are experiencing short-term homelessness and have extremely low incomes, deeply affordable permanent housing is needed. For those who are chronically homeless, effective evidence-based strategies are needed. This includes supportive housing that combines robust housing interventions with wrap-around supportive services.

A graphic showing the total number of Californians experiencing homelessness in February 2022 where roughly 2 in 3 unhoused Californians experience short-term homelessness.

2. Single adults make up the vast majority of unhoused Californians

Adults not with children make up 80% of the people experiencing homelessness in California at a point in time, followed by families with children (14%) and unaccompanied youth (7%). Adults (aged 25 and over) in households not with children include sole individuals, couples, and groups of adults and can include noncustodial parents.2In the data presented here, “adults not with children” excludes young adults aged 18 to 24 who are only with other individuals under age 25 (and so are considered “unaccompanied youth”). “Adults not with children” includes a small number of young people aged 18 to 24 who are accompanied by adults aged 25 or older. They are particularly vulnerable to experiencing severe housing insecurity since they do not often qualify for many social safety net programs or are only eligible for short-term, small-sum assistance.

Unhoused families with children often fall into homelessness because of the lack of affordable housing and compounding economic challenges. Unaccompanied youth, aged 24 and younger, include youth that left home due to neglectful or unsafe family dynamics, including many LGBTQ+ youth and some parenting youth. Experiencing homelessness at any age causes trauma and negative health, educational, and economic outcomes, and these are especially exacerbated in children and youth.

Close attention should be placed on how many unhoused Californians fall into each of these three subpopulations of people experiencing homelessness — single adults, families with children, and unaccompanied youth — to appropriately build the capacity of housing and service system needs, especially for adults without children who represent the vast majority of individuals experiencing homelessness.

A pie chart showing the percentage of Californians who are homeless by household type where over 3 in 4 Californians experiencing homelessness are adults with no children as of February 2022.

3. Racial disparities are stark within California’s homeless population

Black Californians are disproportionately likely to experience homelessness, and American Indian and Pacific Islander Californians are also especially affected. While Black Californians make up roughly 5% of the state’s population, they comprised over 1 in 4 unhoused people who made contact with a homelessness service provider in the 2021-22 fiscal year. Separate data from the 2022 point-in-time count show a particularly large increase in the share of Californians experiencing homelessness who are Latinx. These stark racial disparities reflect harmful current and past racist policies that have created educational, housing, economic, and health barriers for people of color – all of which directly affect an individual’s ability to obtain and sustain stable, affordable housing.

Long-standing racist policies and practices have also concentrated marginalized communities in undervalued occupations, increasing their economic insecurity which is a primary driver of experiencing homelessness. We see this today as people of color are largely pushed into lower-paying occupations, the first to lose their jobs during economic downturns, and experience the highest rates of unemployment. Consequently, Californians of color face higher risk of housing instability and are more likely to pay unaffordable portions of their income towards rent. Institutionalized practices have also placed Black and other communities of color at highest risk of justice system-involvement, which can cause and exacerbate the length of homelessness.

A line chart showing the percentage of unhoused individuals being assisted by homeless service providers where Black, America Indian or Alaska Native, and Pacific Islander Californians disproportionately experience homelessness in the 2021-22 fiscal year.

more in this series

See our Q&A: Understanding Homelessness in California & What Can Be Done to learn how California can leverage its resources to ensure all Californians have a home.

4. Californians experience homelessness in every county throughout the state, with the most residing in Los Angeles County

Homelessness is a statewide problem that affects Californians in every county throughout the state — rural, suburban, and urban alike. In February 2022, the Los Angeles and South Coast region (49.9%) and the San Francisco Bay Area (22.2%) had the highest shares of unhoused individuals, followed by the Sacramento Region (7.2%). Los Angeles County specifically is home to more than 40% of unhoused Californians, based on point-in-time data. This is in part due to its dense population, high housing costs, and general lack of affordable housing. Understanding the geographic distribution of where people experiencing homelessness reside is needed to appropriately design the allocation of state funding in ways that account for the proportional share of the homeless population in each local area.

A line chart showing the percentage of people experiencing homelessness by state region where most unhoused Californians reside in the Los Angeles and South Coast region and the San Francisco Bay Area as of February 2022.

5. California’s unhoused population is aging and increasingly composed of older adults

Over 40% of unhoused Californians in adult-only households who came in contact with the homelessness response system in the 2021-22 fiscal year were aged 50 and older.3Data point from custom tabulations from the California Homeless Data Integration System. Financial and medical emergencies later in life can push those who were already struggling to make ends meet into homelessness. Challenges in accessing support and social safety net programs for older adults in crisis and inadequate benefit amounts are also a driving factor.

Older adults are more likely to have underlying health conditions and disabilities that may be exacerbated by the additional stressors of being unhoused. Experiencing homelessness is already tied to severe health declines as research shows unhoused adults develop similar rates of geriatric conditions as housed adults who are 20 years older. The distinctive circumstances older adults face require more assistive services to obtain and maintain housing. As such, older unhoused Californians have significant implications for current homeless intervention practices as specific service needs should be integrated with other service systems and funding sources.

Conclusion

Lifting all Californians out of homelessness is possible. However, this cannot be done without persistence and understanding the diverse needs and housing support required for each distinct group of Californians that is unhoused. Interventions must also target overrepresented Californians, including people of color and single adults who comprise the majority of the homeless population. The challenges unhoused individuals face are not theirs alone as severe shortages of affordable housing, stagnating wages, disinvestment in mental health services, and historical and current racist policies and practices that touch on every aspect of life in California further exacerbate homelessness across communities. And while recent state budgets have included significant funding for various homeless-related services and programs, there is still a need for more investments, capacity building, and tailored interventions.

Ending homelessness through effective and respectful practices has proven to be possible through evidence-based approaches supported by sufficient ongoing funding, and it fundamentally begins with housing. By understanding the needs of unhoused Californians and focusing on solutions that work, state policymakers have the opportunity to leverage our resources to ensure all Californians have access to a home.

Support for this report was provided by the Conrad N. Hilton Foundation.

Housing & Homelessness
  • 1
    This publication utilizes two separate sources of data for our analysis: 1) US Housing and Urban Development Point-in-Time Count which provides the number of unhoused people counted on a single night in January, and 2) the California Homeless Data Integration System through which local Continuums of Care report data to the state collected by homeless service providers throughout a year. The terms homeless and unhoused are also used interchangeably.
  • 2
    In the data presented here, “adults not with children” excludes young adults aged 18 to 24 who are only with other individuals under age 25 (and so are considered “unaccompanied youth”). “Adults not with children” includes a small number of young people aged 18 to 24 who are accompanied by adults aged 25 or older.
  • 3
    Data point from custom tabulations from the California Homeless Data Integration System.

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California’s subsidized child care providers offer vital early learning and care options for families struggling to make ends meet. These early educators — who are primarily women and disproportionately women of color — deserve fair and just wages for essential work that helps children learn and grow while parents are working or going to school to support their families.

“California providers and families suffer when affordable child care is limited in their communities because of policymakers’ lack of investment.”

Despite providers’ critical role in nurturing children and assisting families, state leaders have failed to consistently and adequately increase provider payment rates in recent years. Without sufficient payments, child care providers are unable to offer early educators fair wages, struggle to keep pace with the rising statewide minimum wage, and can’t afford the increasing price of food and supplies. Ultimately, California providers and families suffer when affordable child care is limited in their communities because of policymakers’ lack of investment.

How Are Subsidized Child Care Providers Paid in California?

Subsidized child care providers are paid in one of two ways in California: 1) by accepting vouchers from families or 2) by contracting directly with the state. Providers who accept vouchers are reimbursed by the state based on the Regional Market Rate (RMR) Survey. The RMR survey — administered every two to three years — provides “rate ceilings” based on provider setting and the age of the child for all 58 California counties. The rate ceiling is the highest payment a provider can receive from the state for the care of a child. Providers who contract directly with the state are paid based on a Standard Reimbursement Rate (SRR). The SRR is adjusted to reflect the additional cost of serving certain children.1In 2018-19, policymakers also increased the Standard Reimbursement Rate adjustment factors for certain higher-cost groups of children, such as infants and children with disabilities. However, some (but not all) of these adjustment factors were eliminated in the 2021-22 budget agreement as part of the transition to a single reimbursement rate system for subsidized child care providers. See Assembly Bill 1808 (Committee on Budget, Chapter 32, Statutes of 2018), https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB1808; and Assembly Bill 131 (Committee on Budget, Chapter 116, Statutes of 2021), https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB131. Moreover, beginning in 2022-23, state law requires an annual cost-of-living adjustment to the SRR, although the Legislature may suspend it for a given fiscal year.

Payment Rates for Voucher-Based Child Care Providers Are Not Keeping Pace Across 58 Counties

State leaders have updated voucher-based payment rates for child care providers just twice since the 2016-17 state fiscal year. During this same period, the state law requiring annual increases to the statewide minimum wage went into effect, raising the wage by 55% from 2016-17 to 2022-23 and increasing costs for providers.2Calculations are based on the minimum wage for employers with 25 employees or less. Senate Bill 3 (Leno, Chapter 4, Statutes of 2016), https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160SB3.

The rate ceilings for child care providers across all 58 counties generally have not kept pace with the rising minimum wage even after the most recent increase to payment rates enacted in 2021-22. In the state’s most populous county — Los Angeles — payment rates for licensed centers caring for preschool-age children increased by less than half as much as the statewide minimum wage. Providers in some counties, such as Riverside County, saw miniscule rate increases of less than 5%. And in 27 counties, due to weaknesses in the rate-setting methodology, licensed centers have not received a single rate increase for care for preschool-age children since 2016-17.3Market rate surveys collect data on the tuition and fees that families can afford to pay for child care in a geographic area. These rates typically do not cover the true cost of care, as many providers supplement tuition and fees with other sources of revenue, such as grants or donations. See Bipartisan Policy Center, The Limitations of Using Market Rates for Setting Child Care Subsidy Rates (May 2020), 4-6, https://bipartisanpolicy.org/report/the-limitations-of-using-market-rates-for-setting-child-care-subsidy-rates/

A bar chart showing a percentage change where payment rates for voucher-based child care providers have fallen short of increases to the minimum wage.

State Rate for Contract Providers Doesn’t Match Rising Child Care Business Costs

Policymakers have not consistently updated the SRR each year so that contract providers can keep pace with rising staff costs and the increasing price of food and supplies. From 2016-17 to 2022-23, the SRR increased by 36.6%, falling short of the 55% increase in the state minimum wage.

A line chart showing the percent increase in minimum wage and standard reimbursement rate from 2016-17 to 2022-23 where the rising minimum wage has outpaced increases to the payment rate for contract child care providers.

Even though contract-based providers are required to meet more program standards than voucher-based providers do, the payment rate is lower than the RMR ceiling in many counties, illustrating a key problem with the state’s bifurcated rate system. To correct for this, policymakers included a provision in the 2021-22 budget agreement to reimburse contract-based providers with either the SRR or the rate for voucher-based providers, whichever is higher.4Assembly Bill 131 (Committee on Budget).

Child Care Providers Urgently Need a Substantial Pay Raise

Child care provider rates are inadequate and further destabilize the state’s early care and learning system. Policymakers should significantly increase rates in 2023-24 to ensure child care providers can keep up with costs and continue to offer invaluable care to children and families. Doing so would offer needed relief to providers and support the longer-term implementation of a new rate system that will reflect the actual cost of providing care, including paying educators fair wages.

To fully and consistently fund these critical investments in child care, state leaders will have to develop solutions that raise ongoing revenues. One option is to scale back or eliminate costly tax breaks that provide outsize benefits to wealthy people and profitable corporations. Each dollar that goes to these poorly targeted tax breaks is a dollar that is not available to bolster core state services — such as subsidized child care. Moreover, the State Appropriations Limit (“Gann Limit”) may be a barrier to boost investments in child care and other public services. Policymakers should work to remove or significantly reform this spending cap so the state can plan and make bold investments that help families be healthy and thrive.

Housing & Homelessness
  • 1
    In 2018-19, policymakers also increased the Standard Reimbursement Rate adjustment factors for certain higher-cost groups of children, such as infants and children with disabilities. However, some (but not all) of these adjustment factors were eliminated in the 2021-22 budget agreement as part of the transition to a single reimbursement rate system for subsidized child care providers. See Assembly Bill 1808 (Committee on Budget, Chapter 32, Statutes of 2018), https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB1808; and Assembly Bill 131 (Committee on Budget, Chapter 116, Statutes of 2021), https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB131.
  • 2
    Calculations are based on the minimum wage for employers with 25 employees or less. Senate Bill 3 (Leno, Chapter 4, Statutes of 2016), https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160SB3.
  • 3
    Market rate surveys collect data on the tuition and fees that families can afford to pay for child care in a geographic area. These rates typically do not cover the true cost of care, as many providers supplement tuition and fees with other sources of revenue, such as grants or donations. See Bipartisan Policy Center, The Limitations of Using Market Rates for Setting Child Care Subsidy Rates (May 2020), 4-6, https://bipartisanpolicy.org/report/the-limitations-of-using-market-rates-for-setting-child-care-subsidy-rates/
  • 4
    Assembly Bill 131 (Committee on Budget).

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All parents should have the support they need to ensure economic security for their children and themselves. CalWORKs is California’s primary program to help families with children that are struggling to secure a basic income to meet their needs. Recent state reforms to CalWORKs are designed to improve the program’s capacity to effectively focus on supporting parents to identify goals, address barriers, and secure durable improvements in economic stability and family well-being.

“CalWORKs provides an opportunity to support thousands of children and parents in addressing the challenges of poverty and the barriers put before them.”

However, state CalWORKs policy continues to threaten counties with financial penalties tied to the federally-defined Work Participation Rate (WPR), incentivizing counties and caseworkers to direct CalWORKs participants away from supportive activities to address barriers that do not fully count toward meeting the federal WPR.

Removing this threat of financial penalty could better align state policy with the CalWORKs program’s current focus, facilitating full implementation of strategies designed to effectively support parents and families in securing long-term stability and well-being. Policymakers also have options to build on these reforms to further support families participating in CalWORKs.

CalWORKs Participants Face Multiple Challenges to Securing Economic Security

CalWORKs is California’s version of the federal Temporary Assistance for Needy Families (TANF) program and supports more than 300,000 families throughout the state, providing modest monthly cash grants while helping stabilize families and supporting parents in addressing barriers to employment and finding jobs.1For additional discussion of the CalWORKs program, recent reforms, work requirements, and the federal WPR, see also Esi Hutchful, Undercutting the Needs of California Families: The Harm of Racist, Sexist Work Requirements & Penalties in CalWORKs (California Budget & Policy Center, 2022). CalWORKs parents face a labor market in which gender- and race-based discrimination are ongoing, as well as workplace expectations and practices that make it difficult for parents to balance work with caregiving responsibilities. These dynamics significantly affect CalWORKs parents, who are predominantly women, people of color, and parents of young children.

A column chart showing the percentage of CalWORKS clients with welfare-to-work participation requirements in 2020 where CalWORKs clients are particularly exposed to an economy that discriminates against women, people of color and parents.

CalWORKs parents also face an economy where a postsecondary credential is increasingly required to access all but the lowest-paying jobs. Yet nearly half of CalWORKs household heads do not have a high school degree or equivalent, reflecting structural barriers to education that many have encountered, again pointing to the effects of racism and sexism embodied by past and ongoing policies and practices across a variety of domains.2Adriana Ramos-Yamamoto and Monica Davalos, Confronting Racism, Overcoming COVID-19, & Advancing Health Equity (California Budget & Policy Center, 2021).

A donut chart showing that nearly half of CalWORKs household heads have not completed high school.

In addition, many CalWORKs parents also experience significant health challenges. Among parents completing appraisals of strengths and barriers at program entry, 28% faced mental health challenges, 5% struggled with substance abuse, and 18% had faced domestic abuse.3Data reflect the share of CalWORKs participants recommended for services to address mental health, substance abuse, or domestic abuse among those completing Online CalWORKs Appraisal Tool (OCAT) assessments during fiscal year 2019-20. Source: Budget Center analysis of Department of Social Services data from Department of Social Services, CalWORKs Annual Summary (November 2022). These additional barriers can negatively affect both parents’ employment prospects and their families’ broader well-being.

Supporting Parents to Address Barriers Can Improve Long-Term Employment and Child and Family Well-Being

There are multiple reasons for the CalWORKs program to prioritize supporting parents in addressing the barriers they face:

  • Challenges related to limited education and mental health, substance use, and domestic abuse barriers limit parents’ capacity to work at all and limit the quality of jobs parents can secure. Addressing these barriers improves parents’ likelihood of success in securing and retaining jobs and improves parents’ access to jobs with higher pay and more job security over the short-term and the long-term.
  • Addressing these challenges also promotes child well-being and family stability. Parental struggles with mental health, substance use, and domestic abuse are risk factors linked to child neglect leading to child welfare involvement.4Lindsey Palmer, et al. “What Does Child Protective Services Investigate as Neglect? A Population-Based Study.” Child Maltreatment (July 13, 2022), doi: 10.1177/10775595221114144. Supporting parents to address these challenges can help families stabilize and safely remain intact, facilitating prevention of child maltreatment and the need for child removal and foster care placement.

Recent State Reforms to CalWORKs Recognize that Effective and Respectful Services Should Focus on Supporting Families…

Recognizing the significant challenges facing CalWORKs families – and the importance of respectfully addressing these challenges to enable families to secure long-term stability – in recent years state policymakers have made several changes to CalWORKs policy intended to improve support for participants.

Through Senate Bill 1041 of 2012, California established its own CalWORKs participation standards that are distinct from federal standards.5Senate Bill 1041 (Committee on Budget and Fiscal Review, Chapter 47, Statutes of 2012). These state standards include no rigid time limits on activities to address barriers or advance education, treating these activities as equal to employment activities for demonstrating engaged program participation.

The state has also adopted an evidence-based behavioral approach to guide families in setting goals (CalWORKs 2.0) and created more holistic outcome measures to evaluate the program (the California CalWORKs Outcome and Accountability Review or Cal-OAR). California also implemented a voluntary home visiting program to support family health and engaged parenting.

… But Continued Threat of County Penalties Linked to the Federal Work Participation Rate Hinders Full Implementation of Reforms

These recent constructive CalWORKs reforms are hindered from full implementation, however, because state policy continues to threaten counties with potential financial penalties linked to the Workforce Participation Rate as defined by federal TANF rules.

The federal government defines success for state TANF programs not based on how well the programs meet families’ needs, but only based on whether programs meet specific WPR targets, determined by the percentage of parents receiving assistance that are engaged in a narrowly-defined set of welfare-to-work activities. These federal activities focus on getting parents into paid employment as quickly as possible, despite the fact that such work requirements have racist and sexist roots and research suggests they do not lead to meaningful long-term improvements in employment and are linked to increases in deep poverty.6Elisa Minoff, The Racist Roots of Work Requirements (Center for the Study of Social Policy, February 2020); LaDonna Pavetti, TANF Studies Show Work Requirement Proposals for Other Programs Would Harm Millions, Do Little to Increase Work (Center on Budget and Policy Priorities, November 2018). Like many other states, California has sometimes struggled to meet its federal WPR targets. The state has at times been required to submit appeals and corrective plans, but has never had to pay a WPR penalty.

Current state policy would require counties that miss federal WPR targets to pay half of any financial penalty the state received for not meeting targets. This policy incentivizes counties and caseworkers to direct CalWORKs participants into the narrowly-defined activities that count toward meeting the federal WPR. However, the federal WPR does not acknowledge the value of fully supporting parents to address education and health barriers. Many activities to address barriers faced by large shares of CalWORKs participants – that the state approves without time limits for participants to meet state CalWORKs participation expectations – do not fully count toward meeting the federal WPR.

The Federal WPR Does Not Fully Count Activities That Address Barriers Faced by Many CalWORKs Participants

State-Approved Barrier Removal That Does Not Fully Count for Federal WPRShare of CalWORKs Participants Assessed With Need for Barrier Removal
Adult basic education or secondary education (e.g., high school or GED), for participants without a high school or equivalent degreeNearly 1 in 2 heads of household lack a high school or equivalent degree
Mental health servicesMore than 1 in 4 participants recommended for mental health services
Substance abuse servicesAbout 1 in 20 participants recommended for substance abuse services
Domestic abuse servicesMore than 1 in 6 participants recommended for domestic abuse services

*Note: Federal rules limit countable participation in listed education activities to no more than 10 hours per week, and limit countable participation in mental health, substance abuse, and domestic abuse services to no more than four consecutive weeks, not to exceed six weeks in a 12-month period. CalWORKs participant data reflect the share of CalWORKs participants recommended for services to address mental health, substance abuse, or domestic abuse among those completing Online CalWORKs Appraisal Tool (OCAT) assessments during fiscal year 2019-20.
Source: Budget Center analysis of Department of Social Services data, Congressional Research Service

Removing County Liability for Federal WPR Targets Could Better Align State Policy with Recent CalWORKs Reforms

Threatening to penalize counties financially for not meeting federal WPR targets creates an incentive for counties to direct parents away from activities to address barriers that may be their best investments to improve stability and long-term employment prospects – and toward more narrowly-defined “work-first” activities that may not be in families’ best long-term interests but will meet rigid federal WPR criteria. This financial penalty policy therefore works at cross-purposes with extensive recent CalWORKs reform efforts. Repealing this policy could better align state policy with the CalWORKs program’s current focus, facilitating full implementation of strategies designed to effectively support parents and families in securing long-term stability and well-being.

State Policymakers Have Options to Further Build on Recent Reforms to Support CalWORKs Parents and Families

Additional state changes to CalWORKs program rules could extend recent reforms to further bolster support for parents and children. Examples include:

  • Continuing to increase the size of cash grants to enable families to cover their costs to meet basic needs,
  • Expanding policies and practices that help parents avoid and quickly resolve sanctions that reduce access to cash grants,
  • Reducing sanction penalties in order to minimize negative impacts on child and parent basic needs and well-being, and
  • Recognizing county performance that demonstrates strong participant engagement and effectively identifies and addresses participant barriers.

As California’s primary program to help families that are struggling to secure a basic income to meet their needs, CalWORKs provides a unique opportunity to support thousands of children and parents in addressing the challenges of poverty and the barriers put before them. Continuing to align state policy and build on recent reforms can help CalWORKs reach its potential to help ensure that every California child and family can thrive.

Support for this report was provided by the Conrad N. Hilton Foundation.

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