Poverty & Inequality Archives

This report was co-authored by Amy M. Traub, Senior Researcher and Policy Analyst at the National Employment Law Project.

key takeaway

California’s Unemployment Insurance (UI) system is severely underfunded and outdated, leaving workers with inadequate benefits and excluding millions. To revitalize UI and ensure it supports both workers and the economy, the state must raise the taxable wage base and reform its financing structure to eliminate the $19.8 billion debt and stabilize the system for future economic downturns.

When Californians are out of work, unemployment insurance (UI) should help them make the rent, put food on the table, and cover other basic needs until they can find a new job. During the worst days of the pandemic, millions of jobless workers across the state relied on UI benefits to make ends meet, supporting both their families and California’s economy until it could thrive again. UI is also critical for jobless workers during periods of economic growth: In May 2024, 379,955 California workers — laid off from industries including manufacturing and information — counted on UI as they sought new employment.¹

Yet without the federal supplements that were available during the pandemic downturn, California workers received an average UI benefit of just $368.53 a week in 2023, less than the income needed to afford fair market rent in any county in the state.² At the same time, millions of California workers, including more than a million immigrant workers, are excluded from accessing unemployment insurance entirely.³

To strengthen and expand UI to adequately support workers and the economy, California must address the severe and chronic underfunding of the UI trust fund, which has created a structural deficit and $19.8 billion in debt for the state’s UI system. The underlying problem is California’s deficient UI financing: For decades policymakers have not required businesses to cover the true cost of the unemployment benefits their workers need. Instead, the state taxes employers on only the first $7,000 of each employee’s pay, a dramatically lower wage base than most other states.

This report details how workers, employers, and the economy as a whole are paying a steep price for California’s inadequate UI financing system. It explores how both raising the taxable wage base and changing the state’s experience rating system will be necessary to strengthen and stabilize UI to better serve workers, employers, and the economy.

Unemployment Insurance is a Lifeline for California, But Low Benefits and Exclusions Undermine Its Effectiveness

The joint federal-state UI system was established in the wake of the Great Depression to protect workers and their families against the loss of employment income, to bolster the economy during economic downturns by supporting consumer demand, and to ensure jobseekers are not forced into substandard jobs that could broadly depress wages and degrade working conditions.

Today, economists recognize that UI also plays an important role in improving job matches, enhancing the overall functioning of the labor market, and helping employers match with workers who have the right skills, improving their efficiency.⁴ By giving workers time to match with more suitable jobs, UI also contributes to higher wages and greater job satisfaction when they find new work.⁵ Yet UI’s ability to fulfill any of these functions is weakened by California policymakers’ failure to raise the state’s low benefit levels or to include the significant numbers of workers who are locked out of the system entirely.

Unemployment benefits remain critical to workers who receive them. In 2022, UI prevented more than 400,000 people nationwide, including 116,000 children, from experiencing poverty.⁶ Even for workers not facing poverty, receiving unemployment benefits reduces hardship and broadly improves the well-being of households, including recipients’ financial stability and mental health.⁷

Yet benefits in California have not been raised in nearly two decades. With an average benefit of just $368.53 a week in 2023⁸, UI benefits no longer provide enough money for Californians — particularly those with low incomes — to meet the rising cost of living while seeking employment. As the California Budget & Policy Center pointed out earlier this year, a worker who loses a full-time minimum wage job (at $16.90-per-hour in Los Angeles County) receives just $1,465 in monthly unemployment benefits, which falls $69 short of covering rent for a studio in Los Angeles priced at Fair Market Rent.⁹ California’s UI benefits are significantly lower than other Western states, including Washington ($703.79 per week on average), Oregon ($543.81 per week), Nevada ($450.70 per week), and Hawaii ($613.30 per week), as shown in the figure below. California’s low benefits are even more striking considering the state’s higher cost of living.

At just $40 per week, California’s minimum UI benefit — the payment provided to workers who earned the lowest wages before becoming unemployed — is also among the nation’s lowest, falling below the minimum benefits provided by 29 other states. For example, Washington’s minimum benefit is seven times greater than California’s ($295 per week), while Arizona’s minimum benefit is $200 per week, and Oregon’s is $171. In addition, 12 states offer dependent allowances, providing a weekly supplement to UI benefits so that workers with children and other dependents have an additional resource to make ends meet. Despite its low average and minimum benefits, California offers no additional support to unemployed parents and other workers supporting dependents.

Low Unemployment Insurance Benefits Exacerbate Racial and Gender Inequities

Low UI benefits can be especially harmful for workers of color, including American Indian, Black, Latinx, and Pacific Islander Californians — particularly women — who are overrepresented in low-paying jobs due to structural racism and sexism.¹⁰ Since benefit levels are based on prior wages, low-paid workers tend to receive lower UI benefits. Yet workers who lived paycheck-to-paycheck when they were employed face even greater hardship in trying to cover their expenses on benefits that are a small fraction of their paycheck. At the same time, workers of color typically have fewer financial resources other than UI benefits to draw on during unemployment compared to white workers, as a result of systematic exclusion from wealth-building opportunities over generations.¹¹

California’s low benefit levels also undercut UI’s ability to fight recessions. This is particularly troubling because a strong UI system is among the most effective tools available to promote economic recovery: According to the International Monetary Fund, each dollar paid in UI benefits during the pandemic generated $1.92 of economic growth as workers and their families were able to continue spending on basic necessities.¹² This powerful impact was achieved because the federal government expanded UI benefits during the pandemic: A $600 a week supplement to regular state UI benefits early in the pandemic (later $300 a week) ensured that unemployed workers could keep spending money, supporting local businesses across the state. The expanded federal benefits also ensured that California jobseekers and their families were able to meet expenses far better than they could by relying solely on the state’s regular UI benefits.

Federal pandemic programs also expanded eligibility for UI benefits to self-employed workers, caregivers, misclassified independent contractors, part-time workers, and many underpaid workers who are typically shut out of California’s regular UI system. By expanding the share of unemployed workers who received support, federal pandemic programs further improved the ability of UI to stabilize the economy.

More than 1 million undocumented workers, who represent over 6% of California's workforce, were, notably, not included in the UI benefit expansions.¹³California instituted a Disaster Relief Assistance for Immigrants (DRAI) program to provide limited, one-time financial assistance to unemployed immigrants who were not otherwise eligible for UI benefits. However, the amount of support was grossly inadequate to meet immigrant workers’ needs and fell far short of what other Californians received, with researchers finding that unemployed citizen workers in California were eligible for up to 20 times more aid than the state’s undocumented workers in the first year of the pandemic.¹⁴

Workers who are on strike are also excluded from UI benefits, even though they miss paychecks and risk hardship for exercising their right to collective action. California should consider expanding UI benefits to striking workers, as New York and New Jersey already do.

Now both federal and state emergency programs have expired, and Californians are left with a UI system that does not adequately support jobseekers and still excludes many of them. California’s UI system is not prepared for the next unexpected economic shock or crisis. At a moment when policymakers are increasingly worried that the use of artificial intelligence could push large numbers of workers out of a job, a strong UI system is needed more than ever to support Californians who could be displaced.

A Strong and Effective UI System Requires Adequate Financing: California Needs Major Reforms

Unemployment insurance is funded by state and federal payroll taxes. In general terms, the Federal Unemployment Tax Act (FUTA) funds UI administrative costs and certain special programs, while the State Unemployment Tax Act (SUTA) tax, imposed by states, pays for UI benefits and is used to repay any federal loans made to the state’s UI trust fund (more on this below). SUTA tax revenues are deposited into a trust fund held for each state by the US Treasury.

State unemployment insurance benefits are paid out of each state’s trust fund. If states don’t have sufficient money in the trust fund to pay UI benefits, they can take out a federal loan. That’s what California and 21 other states did as they struggled to pay out benefits to tens of millions of laid off workers in the early days of the COVID-19 pandemic.¹⁵ Although the federal government fully paid for expanded UI benefits during the pandemic economic crisis, California still faced a record $35 billion in costs for regular UI benefits. The state is still paying back those costs today, and currently faces a trust fund debt of $19.8 billion.¹⁶

Yet the extraordinary costs of the pandemic are only the latest and most dramatic manifestation of an ongoing structural deficit in California’s UI financing system. In January 2020, before the pandemic triggered record job loss, California already had the most underfunded UI system of any state.¹⁷ Even today, with a relatively low unemployment rate hovering around 5%, California does not raise enough revenue to pay for current UI benefits, much less pay down its trust fund debt.

In addition to regular SUTA taxes, California employers are paying a 15% tax surcharge to pay back the trust fund loan, but this additional revenue is still not sufficient to reduce the principal. The state Employment Development Department projects that at the current rate of repayment, the outstanding federal UI loan balance will grow to nearly $22 billion in 2025.¹⁸

California must overhaul its UI revenue system to adequately support unemployed workers and the economy, pay down its debt, and build a reserve for future economic downturns.

Failing to Modernize UI Financing Costs All Californians

California’s underfunded UI system imposes steep costs across the state. As described above, job seekers face hardship as they struggle to get by on low UI benefits, even as many jobless workers are excluded. At the same time, meager benefits may not be enough to power the state’s economic recovery in the next downturn. Yet the costs are even more widespread: Because the interest on the trust fund debt has traditionally been paid out of the state’s general fund, all California residents will ultimately pay a price.

Due to rising interest rates, California owed $484 million in interest on UI debt in 2024 at a time when the state was facing a significant, multi-year budget shortfall. Although California was able to use internal borrowing to cover the interest payment due in 2023, there were fewer such options available in 2024 and the state’s final budget agreement covered most of the interest payment ($384 million) with General Fund dollars, taking significant resources away from other priorities. Looking ahead to future years, California will continue to owe interest every year that it maintains trust fund debt, and these payments will significantly reduce funding available to invest in other critical priorities, including health care, child care, affordable housing, and environmental protection.

And while employers may express concern about increased UI taxes in a modernized system, they also face a direct tax penalty if no action is taken: In addition to the surcharge to pay back the loan, California employers will also face a reduction in the Federal Unemployment Tax Act (FUTA) tax credit, effectively hiking their taxes as long as the trust fund debt continues to go unpaid.

Raising and Indexing the Taxable Wage Base Is Critical to Improving UI Financing

Failure to raise revenue is at the heart of California’s UI financing crisis. State policymakers have been reluctant to mandate that employers contribute the funds needed to finance a strong and effective UI system. As a result, California taxes employers on only the first $7,000 of each employee’s pay.

What Is the Taxable Wage Base and Why Is It Important for Understanding How Unemployment Insurance Benefits Are Funded?

State unemployment benefits are financed through state payroll taxes paid by employers. There are two basic factors that determine how much employers pay in those taxes: the tax rate and the taxable wage base. The tax rate is determined for each employer based on tax rate schedules outlined in state law. The rate for a particular employer is then applied to a taxable wage base equal to each of their employee’s first $7,000 in annual earnings to determine how much tax the employer owes.

For example, new employers are assigned a state payroll tax rate of 3.4%. If a new employer has three employees all earning $40,000 annually, the employer would calculate the payroll tax they owe by multiplying 3.4% by $7,000 for each employee ($238), for a total annual tax of $714 for all three employees. If the taxable wage base were higher, say $21,000, the same amount of revenue could be raised with a much lower tax rate (1.1%) because a greater proportion of each worker’s wages would be subject to taxation. Alternatively, by maintaining a 3.4% tax rate, the higher taxable wage base would raise three times as much revenue ($2,142 for all three employees).

When comparing state payroll taxes across states, it’s important to consider both the tax rate and the taxable wage base to which that rate is applied. A state with relatively high tax rates does not necessarily result in employers in that state paying more in taxes than states with lower tax rates. For example, a 5.7% rate would generate a tax of $400 if applied to a base of $7,000. But a much lower rate of 3.8% would generate twice as much tax ($800) if applied to a base of $21,000.

This low fixed amount, known as the taxable wage base, not only raises inadequate revenue but raises it inequitably. The low taxable wage base means that California taxes a higher proportion of the wages of low-paid workers and imposes the highest effective tax rates on small businesses while failing to keep up with wage growth and taxing a far smaller share of wages than most other states. Raising the taxable wage base and indexing it to the state’s average wages is essential to strengthen the UI system.

Wages have increased significantly over the last 40 years, yet California’s taxable wage base has remained fixed, lagging further and further behind. While the state’s taxable wage base of $7,000 was equivalent to full-time wages at the federal minimum wage in 1982, it was less than three months of full-time work at the minimum wage in 2022 in California. By 2022, California’s effective UI tax rate was less than half of what it had been in 1980, as the figure below illustrates.

California’s UI financing system disproportionately taxes the employers of low-paid and part-time workers because the state’s taxable wage base is so low. Take, for example, employers subject to a state UI tax rate of 3.1%, which is the average rate paid by employers in 2023. Since most workers earn more than the state’s taxable wage base of $7,000, employers effectively pay $217 in state UI taxes per worker. But this represents a much larger share of employers’ labor costs for low-paid and part-time workers. For instance, $7,000 amounts to 1.3% of the earnings paid to half-time minimum wage workers, compared to 0.7% of the earnings paid to full-time minimum wage workers and just 0.2% of the earnings of workers paid three times the minimum wage, as the figure below shows. Researchers find that this creates disincentives to hire part-time workers in the first place, leading to fewer employment opportunities, which would impact workers who benefit from the flexibility of part-time work or who rely on additional earnings to make ends meet.¹⁹ Raising the taxable wage base would help to address these inequalities.

Small businesses also bear a disproportionate tax burden as a result of California’s low taxable wage base for UI.

Raising California’s taxable wage base is not a pie-in-the-sky idea. In fact, 94% of US states already have a higher taxable wage base than California, including Washington State with a taxable wage base of $68,500 in 2024, Oregon ($52,800), Nevada ($40,600) and Hawaii ($59,100).²⁰ These states not only tax a much higher share of payrolls than California, but their wage base is indexed to the state’s average weekly wage so that it adjusts automatically each year as wages rise, providing far more reliable financing than California’s low fixed rate. As the figure below shows, businesses in California actually pay taxes on a smaller share of wages than any other state, with just 8% of average annual earnings taxed. California’s low, fixed taxable wage base leads it to raise far less UI revenue than the state needs.

California Must Shift to Forward Financing of UI Benefits and Reform Experience Rating

Raising and indexing California’s taxable wage base is essential to ensuring adequate UI financing, but that alone will not be sufficient to sustainably fund the system because of the structurally flawed mechanism that determines UI tax rates in California.

California has seven employer contribution rate schedules that operate to increase state UI tax rates when the balance of the state’s UI trust fund is low and to reduce rates when the trust fund has more funding.²¹This “pay-as-you-go” mechanism is meant to increase revenues at the moment they are needed, but it produces two perverse outcomes. First, by hiking tax rates during economic downturns (when more workers are claiming UI benefits and the trust fund balance falls), the system compels businesses to pay higher taxes during the most difficult economic times, when their own resources are most depleted. Raising business costs during recessions undermines the ability of UI to promote economic recovery. Second, by lowering tax rates as the trust fund balance begins to recover, this system makes raising additional revenue difficult. If California were to increase its taxable wage base without fixing the “pay-as-you-go” mechanism, employer tax rates would automatically fall as soon as the trust fund balance began to improve, making it more difficult to reach and maintain solvency.

The weakness of pay-as-you-go financing is evident with a look at California’s history: As the figure below indicates, the state failed to raise sufficient revenue to fund UI benefits in every recession since 1980.

The alternative to California’s pay-as-you-go financing mechanism is a forward-funded system designed to take in more revenue than it pays out during periods of low unemployment. Forward funding enables state UI systems to build up sufficient reserves during periods of economic growth to pay benefits during economic downturns, when large numbers of workers are laid off and seeking unemployment benefits. The US Department of Labor’s UI Trust Fund solvency standards are designed to encourage this type of forward funding.²² Numerous other states, including Oregon, use a forward-funding mechanism to put their UI systems on more stable financial footing.²³

The mechanism for determining each individual employer’s UI tax rate is also flawed and needs to be reformed. In general, private employers are assigned a tax rate based on their experience with unemployment — that is, their history of laying off workers who then claim unemployment benefits.²⁴ This system, known as “experience rating,” is required by the federal government, but states have considerable flexibility in selecting specific experience rating methods. In California, an employer’s experience rating is determined by a formula that takes into account their contributions into the trust fund and the UI benefits paid to their former workers.

There are two unintended consequences of this approach to experience rating. First, because employers’ contribution rate increases when their former employees claim UI benefits, employers have an incentive to discourage workers from applying for benefits, provide misinformation about eligibility, and dispute UI benefit claims. Second, this approach to experience rating makes raising the taxable wage base, on its own, a less effective strategy for improving UI financing. This is because increasing the taxable wage base would improve employers’ experience rating and automatically decrease their contribution rates (all else being equal), effectively limiting the amount of revenue that could be raised.

One potential alternative to this system is an experience rating system based on quarterly changes in the hours employees work for a given employer, regardless of whether these workers claim UI benefits.²⁵ This would remove the incentive for employers to discourage or dispute benefit claims and would make increasing the taxable wage base more effective at shoring up the trust fund while supporting stronger benefits and broader eligibility.

Additionally, California could explore adopting this alternative experience rating system in combination with a method of assigning employer tax rates based on desired revenue targets, which researchers find is a highly effective strategy for improving UI financing.²⁶ Finally, California should consider how app corporations like Uber, Lyft, and DoorDash, which use technology to set and control working conditions, short-change California’s UI system by misclassifying employees as independent contractors, circumventing traditional labor laws and taxes. A study from the UC Berkeley Labor Center finds that If Uber and Lyft had treated workers as employees, these two corporations alone would have paid $413 million into the state’s UI trust fund between 2014 and 2019.²⁷

Conclusion

California’s UI system is a critical piece of social infrastructure and could become an engine of economic dynamism for the state, enabling workers, employers, and the economy to thrive. To achieve this vision, policymakers must stabilize the state’s UI finances by raising the taxable wage base and shifting to a forward-financing mechanism, providing the revenue needed to support California jobseekers with adequate benefits and expand assistance to workers who are currently shut out of the system.

Health & Safety Net

Poverty & Inequality

1
Employment Development Department, California Employers Gained 43,700 Nonfarm Payroll Jobs in May 2024, accessed June 21, 2024, https://edd.ca.gov/en/about_edd/news_releases_and_announcements/unemployment-may-2024/.
2
Average benefit amount based on US Department of Labor Employment and Training Administration, Unemployment Insurance Data, https://oui.doleta.gov/unemploy/data_summary/DataSum.asp; housing affordability based on National Low Income Housing Coalition, Out of Reach: The High Cost of Housing, 2023, https://nlihc.org/sites/default/files/oor/California_2023_OOR.pdf using an affordability standard of 30% of income for rent.
3
Legislative Analyst’s Office, Extending Unemployment Insurance to Cover Excluded Workers, (March 28, 2023), https://lao.ca.gov/handouts/state_admin/2023/Unemployment-Insurance-032823.pdf.
4
Ammar Farooq, Adriana D. Kugler, and Umberto Muratori, “Do Unemployment Insurance Benefits Improve Match Quality? Evidence From Recent US Recessions,” National Bureau of Economic Research (2020), https://www.nber.org/system/files/working_papers/w27574/revisions/w27574.rev0.pdf.
5
Nick Gwyn, State Cuts Continue to Unravel Basic Support for Unemployed Workers (Center on Budget and Policy Priorities, June 27, 2022), https://www.cbpp.org/research/state-budget-and-tax/state-cuts-continue-to-unravel-basic-support-for-unemployed-workers; Adriana D. Kugler, Umberto Muratori, and Ammar Farooq, The Impacts of Unemployment Benefits on Job Match Quality and Labour Market Functioning (Centre for Economic Policy Research, February 7, 2021), https://cepr.org/voxeu/columns/impacts-unemployment-benefits-job-match-quality-and-labour-market-functioning.
6
Amy Traub, Unemployment Insurance Had Less Capacity to Cut Poverty in 2022 (National Employment Law Project, 2023), https://www.nelp.org/insights-research/unemployment-insurance-had-less-capacity-to-cut-poverty-in-2022/.
7
Patrick Carey, et al., “Applying for and Receiving Unemployment Insurance Benefits During the Coronavirus Pandemic,” Monthly Labor Review, US Bureau of Labor Statistics, September 2021, https://doi.org/10.21916/mlr.2021.19.
8
US Department of Labor, Employment and Training Administration, Unemployment Insurance Data, https://oui.doleta.gov/unemploy/data_summary/DataSum.asp.
9
Alissa Anderson and Hannah Orbach-Mandel, California Should Increase Unemployment Benefits to Help Workers Meet Basic Needs (California Budget & Policy Center, January 2024), https://calbudgetcenter.org/resources/california-should-increase-unemployment-benefits-to-help-workers-meet-basic-needs/
10
Jasmine Tucker and Julie Vogtman, When Hard Work Is Not Enough: Women in Low-Paid Jobs (National Women’s Law Center, April 2020), https://nwlc.org/wp-content/uploads/2020/04/Women-in-Low-Paid-Jobs-report_pp04-FINAL-4.2.pdf.
11
Angela Hanks, Danyelle Solomon, and Christian E. Weller, Systemic Inequality (Center for American Progress, February 21, 2018), https://www.americanprogress.org/article/systematic-inequality/.
12
Klaus-Peter Hellwig, Supply and Demand Effects of Unemployment Insurance Benefit Extensions: Evidence from US Counties (International Monetary Fund, 2021), https://www.imf.org/en/Publications/WP/Issues/2021/03/12/Supply-and-Demand-Effects-of-Unemployment-Insurance-Benefit-Extensions-Evidence-from-U-S-50112.
13
University of California Merced Community and Labor Center, Worker Relief: Expanding the Safety Net to Excluded Workers, April 2023, https://clc.ucmerced.edu/sites/clc.ucmerced.edu/files/page/documents/worker_relief_2022_2.pdf.
14
University of California Merced Community and Labor Center, Essential Fairness: The Case for Unemployment Benefits for California’s Undocumented Immigrant Workers, March 2022, https://clc.ucmerced.edu/sites/clc.ucmerced.edu/files/page/documents/essential_fairness.pdf.
15
US Department of Labor, Office of Unemployment Insurance Division of Fiscal and Actuarial Services, State Unemployment Insurance Trust Fund Solvency Report 2021, March 2021,https://oui.doleta.gov/unemploy/docs/trustFundSolvReport2021.pdf.
16
US Department of Labor, Office of Unemployment Insurance Division of Fiscal and Actuarial Services, State Unemployment Insurance Trust Fund Solvency Report 2024, March 2024, https://oui.doleta.gov/unemploy/docs/trustFundSolvReport2024.pdf.
17
US Department of Labor, Office of Unemployment Insurance Division of Fiscal and Actuarial Services, State Unemployment Insurance Trust Fund Solvency Report 2020, March 2020, https://oui.doleta.gov/unemploy/docs/trustFundSolvReport2020.pdf.
18
Employment Development Department, May 2024 Unemployment Insurance (UI) Fund Forecast, May 2024, https://edd.ca.gov/siteassets/files/unemployment/pdf/edduiforecastmay24.pdf.
19
Mark Duggan, Audrey Guo, and Andrew C. Johnston, Would Broadening the UI Tax Base Help Low-Income Workers? (IZA Institute for Labor Economics, January 2022), https://docs.iza.org/dp15020.pdf; Po-Chun Huang, “Employment Effects of the Unemployment Insurance Tax Base,” The Journal of Human Resources, 59, no.4 (March 2022) https://doi.org/10.3368/jhr.0719-10316R2.
20
US Department of Labor, Employment and Training Administration, Significant Provisions of State Unemployment Insurance Laws Effective January 2024, https://oui.doleta.gov/unemploy/content/sigpros/2020-2029/January2024.pdf.
21
Employment Development Department, California System of Experience Rating, DE 231Z Rev. 17, (6-22), https://edd.ca.gov/siteassets/files/pdf_pub_ctr/de231z.pdf.
22
US Department of Labor, Office of Unemployment Insurance Division of Fiscal and Actuarial Services, State Unemployment Insurance Trust Fund Solvency Report 2024, March 2024, https://oui.doleta.gov/unemploy/docs/trustFundSolvReport2024.pdf.
23
State of Oregon Employment Department Oregon Employment Department Announces 2024 Rates for Paid Leave Oregon and Unemployment Insurance, November 2023, https://www.oregon.gov/employ/NewsAndMedia/Documents/2023-11-Tax-Contribution-Rate-Notice.pdf.
24
New employers are initially assigned a rate of 3.4%, which is then adjusted after 2-3 years based on their experience rating. Additionally, public and nonprofit employers may choose to finance UI benefits on a dollar-for-dollar reimbursement basis instead of being subject to experience rating. Employment Development Department, California System of Experience Rating, DE 231Z Rev. 17 (6-22), https://edd.ca.gov/siteassets/files/pdf_pub_ctr/de231z.pdf; Employment Development Department, 2024 California Employer’s Guide, DE 44 Rev. 50 (1-24), 9, https://edd.ca.gov/siteassets/files/pdf_pub_ctr/de44.pdf.
25
Josh Bivens et al., Reforming Unemployment Insurance (Center for American Progress, Center for Popular Democracy, Economic Policy Institute, Groundwork Collaborative, National Employment Law Project, National Women’s Law Center, and Washington Center for Equitable Growth, June 2021), 36, https://files.epi.org/uploads/Reforming-Unemployment-Insurance.pdf.
26
A comprehensive analysis of state UI financing systems prepared by the Urban Institute for the US Department of Labor concluded that this approach, called “array allocation,” in combination with indexing the taxable wage base to wage growth were two key factors supporting UI trust fund adequacy. The analysis also suggested that states using array allocation have more stability in tax rates from year to year, leading to more predictability for both employers and the UI trust fund. Wayne Vroman et al., A Comparative Analysis of Unemployment Insurance Financing Methods (Urban Institute, December 2017), xv, 20, 42-43, 46, https://www.dol.gov/sites/dolgov/files/OASP/legacy/files/A-Comparative-Analysis-of-Unemployment-Insurance-Financing-Methods-Final-Report.pdf.
27
Ken Jacobs and Michael Reich, What Would Uber and Lyft Owe to the State Unemployment Insurance Fund? (Institute of Research on Labor and Employment, University of California, Berkeley, May 2020), https://laborcenter.berkeley.edu/pdf/2020/What-would-Uber-and-Lyft-owe-to-the-State-Unemployment-Insurance-Fund.pdf.

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New Census Data Show California Poverty Soared to Alarmingly High Levels in 2023

September 10, 2024

By Mauricio Torres

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 … Continued

key takeaway

California’s poverty rate has increased significantly, with disproportionate impacts on Black and Latinx residents. This alarming trend highlights the urgent need for federal and state policymakers to implement robust anti-poverty measures, such as strengthening the Child Tax Credit, Earned Income Tax Credit, and SNAP program.

California’s poverty rate increased to 18.9% in 2023, up from 16.4% in 2022 and 11.0% in 2021, according to new Census data. The state’s poverty rate was particularly high among Black and Latinx Californians and California continued to have the highest poverty rate of the 50 states.

California’s high poverty rate means that 7.3 million state residents lacked the resources to meet basic needs last year — more than the populations of California’s four largest cities: Los Angeles, San Diego, San Jose, and San Francisco. In sharp contrast, the incomes of the richest 1% of state residents continued to substantially exceed the incomes of most Californians. The average income of the top 1% of California households was $1.2 million in 2023 — 67 times the average income of households in the bottom 20% and 14 times the median household income.

These figures point to the need for federal and state leaders to take urgent action to ensure that all Californians have the resources to thrive, and recent experience proves that policymakers can achieve this vision. Bold investments in the federal Child Tax Credit (CTC) and other economic security-promoting policies during the pandemic brought about a historic drop in poverty in 2021. When Congress allowed these effective policies to expire, that progress was reversed the following year, causing the largest increase in the national poverty rate in 50 years.

With Congress poised to pass a substantial tax package in 2025, federal policymakers should prioritize strengthening and expanding two of the most effective anti-poverty policies: the federal CTC and Earned Income Tax Credit (EITC). Additionally, federal leaders should strengthen SNAP nutrition assistance (CalFresh in California), which plays a critical role in reducing poverty and poverty-related hunger. California policymakers can also cut poverty by strengthening state tax credits and the safety net, and ensuring that all Californians — regardless of immigration status — have access to affordable housing, nutrition assistance, health coverage, and good jobs.

Poverty Rates in California Are at the Highest in Years

California’s poverty rate, as measured by the Census Bureau’s Supplemental Poverty Measure — a more comprehensive reflection of economic well-being than the Census’ Official Poverty Measure — increased two and one-half percentage points to 18.9% between 2022 and 2023.¹ The 2023 poverty rate is also higher than the pre-pandemic rate of 16.6% in 2019.

This is the second year the poverty rate has significantly increased, after the expiration of many pandemic-era policies put in place to reduce economic hardships many Americans experienced as a result of COVID-19. These include federal supports such as the expanded Child Tax Credit, the expanded Earned Income Tax Credit for childless workers, and enhanced unemployment benefits — all of which ended in 2021. Additionally, Supplemental Nutrition Assistance Program (CalFresh in California) emergency allotments, which temporarily increased nutrition benefits, ended in early 2023.

California’s labor market also fared worse in 2023 than nationally, with the state’s unemployment rate increasing and inflation-adjusted hourly wages for low-wage workers decreasing in California.

Poverty Rose Across Children, Adults, and Older Adults

While poverty rose across all age groups, rates vary among children, adults, and older adults, notably:

Poverty remains high for older adults in California.

Child poverty remains high at 19.2%, reflecting the sunset of the expanded federal child tax credit.

Child poverty has risen since 2022 and is even higher than the 2019 rate.² In general, the poverty rate is higher for children than for adults given the costs associated with raising children (such as child care) and the low wages for parents and caregivers, particularly women and women of color. Additionally, at the national level, the expanded federal CTC kept 2.9 million children out of poverty in 2021. With its expiration in 2022, we know that more children in California have fallen into poverty.

Poverty rates for adults are significantly higher in 2023, as compared with 2022.

Poverty Increased for All, Californians of Color Face Greater Hardship

Poverty increased for all racial and ethnic groups in California in 2023. However, poverty rates are more pronounced among Californians of color, highlighting deep-rooted inequities that are a direct consequence of historic and ongoing racism.

Most notably, the rise in poverty was sharpest for American Indian, Alaska Native, Native Hawaiian, Pacific Islander, and multiracial Californians (noted as “Other Californians of Color” in the chart above). Specifically, the poverty rate for this group collectively surged from 8.4% in 2022 to 13.6% in 2023. This significant and alarming increase underscores the unique challenges that these communities face, such as historic marginalization, systematic displacement, and limited access to targeted resources.

Poverty also remains disproportionately high for Latinx and Black Californians at 25% and 22.3%, respectively. Both groups saw an increase of about 4 percentage points from 2022 to 2023. These higher poverty rates reflect how centuries of discriminatory policies and systemic racism — such as redlining, wage discrimination, and chronic underinvestment in communities of color — continue to prevent Black and brown Californians from accessing the same economic opportunities as white people.

The persistence of higher poverty rates for Californians of color is not accidental. Structural racism is the result of policymakers and other individuals with power successfully implementing policies and actions that block people of color from opportunity, many of which are rooted in racism.

Income Inequality Remains Stark in California

In addition to information on poverty, the Census data also sheds light on the incredible magnitude of income inequality in California. In 2023, the richest 5% of California households had an average income of $662,792 and the richest 1% had $1,208,478 on average.³ The average income of the top 1% of Californians is 14 times the $89,300 median California household income and 67 times the average income for the bottom 20% of Californians, which stood at a woefully inadequate level of $18,170. For reference, a single adult needs an annual income of more than $56,000 to afford typical expenses in California, and a single parent with one child needs an income of nearly $100,000.

Notably, the Census income data does not include capital gains — income from the sale of assets like stock shares and real estate — which make up a significant portion of income for wealthy households. Therefore, the Census figures for the top 5% and top 1% of Californians understate their total income. Tax data, which do take into account capital gains income, demonstrate the high level of income concentration in the state, with the top 1% of Californians generally receiving around one-fifth to one-quarter of total income over the past several decades.

Policymakers Can Cut Poverty and Create a California for All

High poverty following the end of major pandemic-era investments proved that policymakers play a significant role in determining the economic well-being of all people. This means they can reverse the spike in poverty by investing in policies that help families and individuals meet basic needs and thrive in their communities.

At the federal level, these include:

Significantly expanding the federal Child Tax Credit (CTC).

Federal tax policies enacted in 2017 are slated to expire in 2026, including the doubling of the federal CTC from $1,000 to $2,000 per child. This presents an opportunity for federal policymakers to strengthen the federal CTC to maximize its poverty-fighting power. The expanded federal CTC that was in place for one year during the pandemic cut child poverty by more than 40% in California, proving the effectiveness of this policy.

Improve the federal Earned Income Tax Credit (EITC).

This is particularly for low-paid adults who are not supporting children in their homes and who consequently get limited assistance from other public supports. The significant increase and expansion of the federal EITC to young childless workers for one year during the pandemic reduced material hardship among young adults and cut poverty, particularly among young Latinx workers ages 18 to 24. The credit was also expanded to childless adults age 65 or older for one year in recognition that a larger share are working today than did when the credit was established.

Strengthening SNAP nutrition assistance (CalFresh in California).

Approve federal emergency child care funding.

This is a request submitted to Congress by the Biden Administration. At the end of September 2023, federal pandemic-related funding for child care expired. This has led to a “child care cliff” across several states that has exacerbated challenges for families with finding affordable child care and for providers with making a living wage. If approved, this $16 billion request would equate to $1.5 billion additional dollars in California to support families and providers with making ends meet.

California policymakers can also do more to cut poverty across the state, including by:

Increasing California’s Earned Income Tax Credit (CalEITC) and expanding the state’s Young Child Tax Credit (YCTC).

Raising the CalEITC to provide a more meaningful credit would help millions of low-paid workers in California, the majority of whom are excluded from the federal EITC and need a strong state credit to help make ends meet. Additionally, extending the YCTC to low-paid families supporting older children — not just those ages 0 to 5 — would help boost the incomes of families with very low incomes who are currently excluded from the full federal CTC.

Strengthening vital supports that improve families’ economic well-being.

Ensuring that all Californians, regardless of immigration status, can benefit from supports.

Investing in affordable housing and homelessness response services.

Ensuring good jobs for all.

Recent efforts to boost the pay of fast food workers and health care workers will go a long way toward helping Californians meet basic needs, but more is needed. State leaders can build on this progress by continuing to raise wages across industries to reflect living costs, bolstering workers’ collective bargaining power to determine their own pay and working conditions, and supporting policies that address persistent inequities in pay and benefits by race, ethnicity, immigration status, gender, and LGBTQ+ status.

Improving access to Medi-Cal.

Despite being eligible, many Californians lose vital Medi-Cal coverage due to complex paperwork and difficulty reaching county offices. Streamlining the renewal process and improving accessibility are crucial to prevent poverty and promote economic stability. Without health coverage, individuals may face high health care costs or medical debt, increasing their risk of falling into poverty. Ongoing health coverage helps lower out-of-pocket expenses and ensures access to preventive care, while supporting workforce participation and continued education, both of which are vital for long-term financial security.

Health & Safety Net

Poverty & Inequality

1
SPM thresholds rose 8.6 percent in 2023 for renters, which is notably higher than the 4.1 percent inflation rate from 2023. This difference reflects that prices rose faster for some household items (mainly rent) than average inflation for the full range of household items. Some researchers prefer to use “anchored SPM thresholds” given that SPM thresholds are higher than inflation. Given California’s high cost of housing (among other costly household needs), the Budget Center maintains the SPM thresholds provided by the Census Bureau.
2
The increase is not statistically significant at the 95% confidence level.
3
The variable used to estimate household income is the sum of individual top-coded income variables, therefore the total may be underestimated for households at the top of the income distribution. Income reported to the Census Bureau may differ from income reported to the Franchise Tax Board due to underreporting, differences in the composition of households versus tax units, and the exclusion of capital gains income from the Census data.

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Explore More on Women’s Well-Being

Notes on Methodology

The California Women’s Well-Being Index (WWBI) is a county-level, composite index that shows how women are faring throughout California. The WWBI consists of 30 indicators of women’s well-being that are grouped into five dimensions: Health, Personal Safety, Employment and Earnings, Economic Security, and Political Empowerment. The methodology used to create the index is outlined in detail below.

Creating the Women’s Well-Being Index
In deciding which measures, or “indicators,” to include in the WWBI, the Budget Center first engaged in a thorough review of research on women and families as well as an evaluation of comparable projects at the national and state level.1 This review resulted in a wide-ranging list of potential indicators. Because this county-level index measures women’s well-being, potential indicators were limited to “outputs” – that is, those that measure attributes of the female population or reflect community characteristics. This standard eliminated “input” indicators, such as those that measure public spending or community resources, for example.

The Budget Center subsequently screened data sources to ensure that data for potential indicators were current, available from a reputable source, and based on sound research methods. Data also were screened to verify that they are updated on a regular basis in order to allow for updates to the WWBI in future years. This initial search resulted in a list of 50 potential indicators.

Next, the Budget Center, in cooperation with the Women’s Foundation of California, surveyed individuals who focus on issues of concern to women across the state. (See the Acknowledgments for a list of survey respondents.) The survey allowed respondents to rank the importance of potential indicators in measuring women’s well-being as well as to suggest alternative indicators. The initial survey was sent via email to approximately 200 individuals. Three follow-up emails were sent to the same individuals, yielding a response rate of approximately 30%. Based primarily on survey results, the initial list of 50 indicators was narrowed down to 30 indicators falling within five dimensions of women’s well-being.

Data Sources and Data Quality
The 30 indicators included in the WWBI are based on data from a variety of state and federal agencies as well as from universities. Data for 17 indicators come from surveys, including the US Census Bureau’s American Community Survey (ACS) and the California Health Interview Survey (CHIS) conducted by University of California, Los Angeles. The remaining data come from administrative sources, with this information collected by various agencies and organizations, such as the California Department of Justice or the California Department of Public Health. Data for most indicators reflect multi-year estimates. (Combining data from multiple years increases the reliability of the data.) These multi-year estimates reflect the average condition in each county during a specific time period.

For survey data, margins of error at the 95% confidence level are included in the WWBI whenever possible and applicable.2 In addition, margins of error at the 95% confidence level are included for some administrative data. While these data are not subject to sampling error – because they reflect a full “universe” of individuals rather than a sample – it is common to provide the margin of error for certain vital statistics because they are subject to random variation during any given period.

In some cases, due to data limitations, data for certain counties for specific indicators were deemed unreliable. The Budget Center used several common benchmarks to determine if a data point was unreliable. This includes an event count of less than 20 in a county for any given time period and/or a coefficient of variation greater than or equal to 30%. For the ACS data, a higher standard was applied: a coefficient of variation greater than or equal to 10%.

When data for one or more counties were determined to be unreliable, county groups were created by aggregating estimates. This was done in order to create a more stable estimate applicable to each county in the group. When creating county groups, several considerations were made. First, contiguous counties with unreliable estimates were often grouped together. However, if possible, county groups were created with the smallest number of counties to avoid unnecessary loss of detail. For example, if the data for four contiguous counties were deemed unreliable, ideally two county groups would be created instead of one large county group. In some cases, data for one or more counties were grouped with a county that had a reliable estimate in order to create a stable estimate.

In addition, indicator values were considered when aggregating counties. For example, if a county with an unreliable estimate needed to be grouped with another county, the indicator values were taken into account in order to avoid aggregating counties with disparate estimates. In some cases, groups do not consist of contiguous counties because the estimates for the contiguous counties were too different to be combined.

For some counties and racial/ethnic groups, the Budget Center chose to display the unreliable estimate. In these cases, the estimate is noted in the tool with an asterisk.

Calculating the Women’s Well-Being Index
The WWBI consists of a wide range of data reported in a variety of ways such as rates, ratios, or percentages. These data have varying ranges and scales. In order to construct a composite index, indicators within each dimension were standardized and aggregated to create a county-level value for each dimension and for the overall index. This section outlines the methodology used in standardizing and aggregating the data in the WWBI.

Data were standardized for each indicator by calculating the z-score. The z-score converts a value into units of measurement based on the standard deviation. The z-score is calculated using the 58-county averages and standard deviations for each indicator. This allows for comparing values across indicators with different formats and with varying ranges of data. The z-score is calculated for each county and indicator using the following formula:

In some instances, a higher z-score indicates greater well-being, such as the percentage of women with a bachelor’s degree. In other cases, a higher z-score indicates lesser well-being, such as the female unemployment rate. In order to ensure that higher scores consistently reflect greater well-being, a number of indicators were reverse-coded. This was done by multiplying the z-score by negative 1.

One disadvantage of using z-scores is that the value of the z-score is hard to interpret. In order to create a value that is easy to understand, the z-score for each indicator was converted into a 100-point scale using the following formula:

The highest scaled z-score for any given indicator has a value of 100, and the lowest scaled z-score has a value of 0, with higher scores indicating greater well-being. However, while a score of 100 reflects the best value across all counties, it is not indicative of maximum well-being. For example, a score of 100 for the voter registration indicator does not mean that all eligible women in that county are registered to vote. Likewise, a score of 0 does not indicate that no women in that county are registered to vote.

To calculate scores for each of the five dimensions, we averaged the scaled z-scores for each county within each dimension. We then calculated overall index scores by averaging each county’s five dimension scores. The indicators and dimensions were not weighted prior to aggregation (i.e., they have equal weights). This reflects the belief that each indicator within a dimension has equal bearing on the well-being of women. Likewise, equally weighting the five dimensions indicates that health, personal safety, employment and earnings, economic security, and political empowerment are all equally important in assessing how women are faring in California.3

Counties are ranked by indicator score, by dimension score, and by their overall index score. In general, the WWBI employs a “modified competition ranking system” to rank the counties. In a modified competition ranking system, ties are ranked with the lowest rank. For example, if three of California’s 58 counties are tied for last, they would have a rank of 58. Using the traditional ranking system, their rank would be 56. The exception to this rule is when two or more counties are tied for first. When this occurs, these counties are ranked first.

Updates Made to the Women’s Well-Being Index

The California Budget & Policy Center updated the Index in October 2020 and again in September 2024. The following changes were made across the versions.

2020
In 2020, eight indicators were altered based on feedback received by stakeholders. The following provides a list of the changes made to these indicators.

Economic Security Dimension

Cost of Housing: The Cost of Housing indicator provides data on housing affordability. The first version of the Women’s Well-Being Index measured housing affordability by using data from the US Housing and Urban Development’s calculation of Fair Market Rents and the US Census Bureau’s calculation of single mothers’ median income. The 2020 Index generalizes this measure of housing affordability by using median gross rent and women’s median annual income data from the US Census Bureau’s American Community Survey (2014-2018).

Employment & Earnings Dimension

Labor Force Participation: The Labor Force Participation indicator shows what share of the population is actively working or looking for work. The first version of the Index used the population ages 16 to 64. The 2020 Index uses the prime-age working population – ages 25 to 64 – in calculating the labor force participation rate. This age group would typically be expected to be working or looking for work.

Low-Wage Workers: The first version of the Index provided data on the percentage of women working in low-wage occupations. The 2020 Index refines this indicator, providing data on the percentage of women paid low wages.

Health Dimension

Health Care Coverage: The Health Care Coverage indicator provides data on the share of women without health insurance. The first version of the Index provided data for women ages 18 to 64. The 2020 Index provides data for women ages 19 to 64. This change is due to a modification made by the Census Bureau in the presentation of these data in their American Community Survey table (B27001).

Life Expectancy: The Life Expectancy indicator provides data on the estimated average lifespan of an individual at birth. This indicator replaces the Obesity indicator from the 2016 Index. Life expectancy is a more common measure of health and wellness.

Safety Dimension

Sexual Assault: Prior to 2014, the Federal Bureau of Investigation collected data on three types of sexual offenses: rape, sodomy, and sexual assault with an object. In 2014, the Federal Bureau of Investigation required reporting agencies in the US to aggregate data for these assaults into one offense: forcible rape. This is a broader definition of sexual assault that encompasses a wider range of offenses. The California Department of Justice implemented this change in the reporting of crime data in 2014, which resulted in an increase in the number of reported rapes.

Domestic Violence: The first version of the Index used the total population when calculating domestic violence rates for the population in each county. The 2020 Index uses the female population for all rates in the Personal Safety Dimension to be more consistent across indicators.

Assault: The first version of the Index the female population age 18 and over when calculating rates of assault for the population in each county. The 2020 Index uses the female population for all rates in the Personal Safety Dimension to be more consistent across indicators.

2024
In 2024, two indicators were altered based on recent economic security research and feedback received by stakeholders. The following provides a list of the changes made to these indicators.

Economic Security Dimension

Commuting Time/Digital Equity: The digital equity indicator replaced the commuting time variable as digital equity was determined to be a more relevant variable. Specifically, a series of literature points to challenges with economic security when adults do not have access to broadband or a computer. The racial digital divide is particularly stark. This indicator shows the number and percentage of adults (18 and over) with cable, modem, fiber optic or DSL service and a desktop, laptop, netbook, or netbook computer in the household. This indicator utilizes the US Census Bureau’s 2018-2022 five-year American Community Survey variables reflecting access to in-home internet and access to in-home computer/laptop.

High School Diploma/Bachelor’s Degree: The bachelor’s degree indicator replaced the high school diploma indicator. This change was made to reflect recent research showing that women without a bachelor’s degree were more likely to lose their jobs during the COVID-19 pandemic. The indicator shows the number and percentage of adults (25 and over) that have a bachelor’s degree. This indicator utilizes the US Census Bureau’s 2018-2022 five-year American Community Survey variables reflecting educational attainment.

Food Insecurity/Food Hardship: While the data source and analysis for this indicator remain the same across versions, the label for the food insecurity indicator changed to food hardship. This change was made given that the United States Department of Agriculture’s definition of food insecurity did not completely align with the measure used for this indicator.

Health Dimension

Life Expectancy: Prior to the 2019 dataset, the life expectancy data from the Institute for Health Metrics and Evaluation did not disaggregate life expectancy at birth by race/ethnicity. The 2019 dataset allowed for this disaggregation and is now included in the indicator.

Safety Dimension

Fatal Accidents: The fatal accidents racial/ethnic disaggregation now disaggregates between Asian and Pacific Islander identities. In previous versions, Asian and Pacific Islander were combined into one category.

Hospital Visits Due to Assault: The hospital visits due to assault now includes a racial/ethnic disaggregation for Multi-Race. Previous versions did not include this disaggregation.

Hospital Visits Due to Assault: The hospital visits due to assault indicator now includes a racial/ethnic disaggregation for Multi-Race. Previous versions did not include this disaggregation.

Suicide: The suicide indicator now includes a racial/ethnic disaggregation for Multi-Race. Previous versions did not include this disaggregation.

Endnotes

1 See for example, Helen Boutrous, et al., The Report on the Status of Women and Girls in California: 2015 (Mount Saint Mary’s University, Los Angeles: 2015); Anna Chu and Charles Posner, The State of Women in America: A 50-State Analysis of How Women Are Faring Across the Nation (Center for American Progress: September 2013); Cynthia Hess, et al., The Status of Women in the States 2015 (Institute for Women’s Policy Research: May 2015); Kristen Lewis and Sarah Burd-Sharps, Women’s Well-Being: Ranking America’s Top 25 Metro Areas (Measure of America: April 2012); University of Minnesota, Center on Women and Public Policy, and Women’s Foundation of Minnesota, Status of Women & Girls in Minnesota: Research Overview (June 2014); Wider Opportunities for Women, The Economic Security Scorecard: Policy and Security in the States (2013).
2 A 95% confidence level means that a researcher is 95% confident that the interval defined by the margins of error contains the true value for the population as a whole.
3 For more details on weighting within composite indexes and other methodological issues, see Organization for Economic Co-Operation and Development, Handbook on Constructing Composite Indicators: Methodology and User Guide (2008).

Acknowledgements

The California Women’s Well-Being Index is a project of the California Budget & Policy Center.

Laura Pryor (Research Director) and Hannah Orbach-Mandel (Policy Analyst) prepared the 2024 Women’s Well-Being Index (WWBI) with assistance from Nishita Nair (Research Associate) and other Budget Center staff. GreenInfo Network developed the data visualization, downloadable county fact sheets, and indicator fact sheets.

Kristin Schumacher, a former California Budget & Policy Center analyst, created the WWBI to help advocates and policymakers understand how women are faring in California. Since the WWBI was first published in 2016, the Index has been replicated in several states nationwide. Schumacher is a consultant to the 2024 update of the WWBI and continues to advance this work through her consulting firm, Aster Policy Analytics.

The 2024 Women’s Well-Being Index was updated in collaboration with the California Commission on the Status of Women and Girls, which provided funding, communications, outreach, and engagement support.

We are thankful to a number of individuals who have contributed to earlier work on the Women’s Well-Being Index.

For the 2024 Women’s Well-Being Index, the Budget Center consulted a number of individuals to help inform the tool’s updates. Additionally, in late 2017 and early 2018 a number of individuals shared their thoughts on policies to boost women’s economic security, employment, and earnings. These individuals helped to shape policy recommendations for women related to work supports, boosting income, building wealth, and improving programs and services that benefit women with low-incomes in California. (Organizational affiliation and title reflects position at time of interview.)

Dr. Fatima Alleyne, Black Women Organized for Political Action
Jasmine Amons, Program Associate, National Center for Youth Law, Women’s Policy Institute Fellow
Graciela Aponte-Diaz, Director of California Policy, Center for Responsible Lending
Sarah Arce, Senior Policy Director, The Campaign for College Opportunity
Elizabeth Ayala, Senior Program Associate, The Women’s Foundation of California
Barbara Baran, Co-Director, California EDGE Campaign
Alexandra Bastien, Senior Associate, Policy Link
Sarah Bohn, Research Fellow, Public Policy Institute of California
Christa Brown, Manager, Financial Justice Project, City and County of San Francisco
Lewis Brown, Jr., Senior Associate, Policy Link
Tyrone Buckley, Policy Director, Housing California
Maggie Cervantes, Executive Director, New Economics for Women
Elena Chávez Quezada, Senior Program Officer, Walter & Elise Hass Fund
Judy Darnell, Vice President of Public Policy United Ways of California
Melany de la Cruz-Viesca, Assistance Director, UCLA Asian American Studies Center
Rachel Deutsch, Supervising for Worker Justice, Center for Popular Democracy
Jodi Doane, Grants & Community Relations Manager, JVS SoCal, Women’s Policy Institute Fellow
Rosalyn Epstein, Financial Empowerment Program Manager, National Coalition for Asian Pacific American Community Development
Tania Flores, Senior Program Associate, The Women’s Foundation of California
Michelle Freridge, Executive Director, Asian Youth Center
Emily Gordon, Director of Strategic Research, Center for Popular Democracy
Sabrina Hamm, Statewide Managing Director, California Asset Building Coalition
Katie Hern, Co-Founder, California Acceleration Project
Dr. Hilary Hoynes, Haas Distinguished Chair in Economic Disparities, Goldman School of Public Policy, University of California Berkeley
Mary Ignatius, Statewide Organizer, Parent Voices
Jennifer Ito, Research Director, USC Program for Environmental and Regional Equity (PERE)
LaNiece Jones, Executive Director, Black Women Organized for Political Action
Rebecca Kauma, Director of Digital Equity, County of Los Angeles
Tatiana Larkin, Black Women Organized for Political Action
Anya Lawler, Policy Advocate, Western Center on Law & Poverty
Vihncent Le, Senior Legal Counsel of Tech Equity, The Greenlining Institute
Pete Manzo, President & CEO, United Ways of California
Amy Matsui, Senior Counsel and Director of Income Security, National Women’s Law Center
Heather McCulloch, Founder and Director, Closing the Women’s Wealth Gap
Krista Niemczyk, Public Policy Manager, California Partnership to End Domestic Violence
Marj Plumb, Chief Strategist, Policy Advocacy and Training, The Women’s Foundation of California
Anne Price, President, Insight Center
Patti Prunhuber, Senior Policy Attorney, Child Care Law Center
Aaron Schill, Director of Research and Programs, National Digital Inclusion Alliance
Katie Selenski, Executive Director, CalSavers (Formerly Secure Choice)
Donna Sneeringer, Director of Government Relations, Child Care Resource Center
Jessica Stender, Senior Counsel, Workplace Justice & Public Policy, Equal Rights Advocates
Adie Tomer, Senior Fellow, Brookings Metro
Marisabel Torres, Senior Policy Analyst, UnidosUS
Julie Vogtman, Director of Job Quality and Senior Counsel, National Women’s Law Center
Lisa Williams, Black Women Organized for Political Action
In addition, individuals who responded to our survey in summer 2015 on selecting indicators were instrumental in guiding the development of the initial version of the California Women’s Well-Being Index. (Organizational affiliation reflects position at time of survey.)
Dion Aroner, Partner, Aroner, Jewel and Ellis Partners
Marisol Aviña, Program Manager, The California Endowment
Barbara Baran, Co-Director, California EDGE Coalition
Jessica Bartholow, Legislative Advocate, Western Center on Law & Poverty
Rebecca Hamburg Cappy, Director, Northern California Office, Alliance for Justice
Krystle Contreras, Director of Outreach and Prevention, Central California Family Crisis Center
Betsy Cotton, Director, Close the Gap CA
Sarah Crow, Vice President, The Opportunity Institute
Cynthia Douglas, California Department of Social Services
Myra Duran, Policy Manager, California Latinas for Reproductive Justice
Stephanie Fajuri, Supervising Attorney, Disability Rights Legal Center – Cancer Legal Resource Center
Sequoia Hall, Leadership Council Member, East Oakland Building Health Communities
Marlene Christine Hurd, Human Resources Manager, Administrator, Healthy Communities Inc. dba Healthy Oakland
Jennifer Ito, Project Manager, University of Southern California, Program for Environmental and Regional Equity
Kate Karpilow, Executive Director, California Center for Research on Women & Families
Kimberly Kenny, Associate Vice President, Mount Saint Mary’s University, Los Angeles
Mari Lopez, Policy Director, Vision y Compromiso
Linda Meric, Executive Director, 9to5, National Association of Working Women
Ami Nagle, President, Nagle & Associates
Nikki Newsome, Program Manager, Reading and Beyond
Vanessa Perez, Civic Engagement Specialist, Time for Change Foundation
Mary L. Perry, Education Consultant
Vonya Quarles, Executive Director, Starting Over, Inc.
Maria Reyes, Bilingual Legal Services Specialist, YWCA Silicon Valley
Gabriela Sandoval, Director of Research and Chief Economic Security Officer, Insight Center for Community Economic Development
Diana Scott, Chief Human Resources Officer, Prologis
Laura Segura, Executive Director, Monarch Services, Santa Cruz County
Hillary Selvin, Executive Director, National Council of Jewish Women/Los Angeles
Cathy Senderling-McDonald, Deputy Executive Director, California Welfare Directors Association
Ann Stevens, Director, Center for Poverty Research, University of California, Davis
Nancy Strohl, Consultant, Office of Senator Holly J. Mitchell
Anne Stuhldreher, Senior Program Manager, The California Endowment
Jesse Torrey, Associate Director, RISE San Luis Obispo County
Francesca Vietor, Program Director, Environment, Public Policy, Civic Engagement, The San Francisco Foundation
Nancy Volpert, Director of Public Policy, Jewish Family Service of Los Angeles
Heather Warnken, Legal Policy Associate, Warren Institute on Law & Social Policy, University of California, Berkeley, School of Law
Deborah Peterson Small, Executive Director, Break the Chains: Communities of Color and the War on Drugs
Nicole D. Vick, Senior Health Educator, Los Angeles County Department of Public Health
Pete Woiwode, Director, California Partnership

Updates

The 2024 Women’s Well-Being Index was updated in collaboration with the California Commission on the Status of Women and Girls, which provided funding, communications, outreach, and engagement support.

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key takeaway

California was the first state to offer paid family leave, but workers cannot apply for benefits until after they have already started their leave, causing financial hardship.

California was the first state in the country to offer paid family leave for its workers, acknowledging the importance of giving workers paid time off to care for their loved ones or bond with a new child. Since then, 12 other states and Washington, D.C. have followed California’s lead. Despite California being the first to pass paid family leave, workers in the state cannot apply for benefits until after they have already started their leave. This may put workers in a distressing financial situation while navigating care for their loved ones. By allowing workers to apply for paid family leave before their leave has begun, policymakers can better serve Californians.

How does paid family leave in California work?

Under California’s paid family leave and state disability insurance programs, workers receive partial wage replacement when they are unable to work for various reasons. Paid family leave is available to workers who are caring for a seriously ill or injured family member, bonding with a new child, or addressing a military exigency. State disability insurance is available to individuals who are unable to work due to an injury or illness. Both benefits are fully worker-funded through a payroll tax. However, a worker cannot apply for their benefits until they have first started unpaid leave and their qualifying life event has already occurred. In other words, a worker has to stop working without confirmation of if they will receive pay and benefits, and without confirmation of how much money they will get.

For example, a worker who qualifies for paid family leave because they have welcomed a new child or who qualifies for state disability insurance to recover from their own serious health condition, including pregnancy, must first take unpaid leave from their job before they can apply for paid family leave or state disability insurance. They will not know if they will get approved, they will not receive pay, and they will need to apply for benefits while at the same time welcoming their new child. This leaves workers in a precarious situation where they must go days and sometimes weeks without pay at a time when they need it most.

This is especially harmful for workers with low incomes, who are disproportionately women and people of color, who face the impossible decision of going days or weeks without pay or taking time off to care for an ill loved one or a new child. For many workers, taking time off of their job without confirmation of benefits is not an option, as workers face expenses that they cannot cover without regular income. This makes workers less likely to take leave, which can have serious consequences to their health.

What are other states doing?

Some states are leading the way in this area and have addressed this gap in policy to ensure that all workers have equal access to paid family and medical leave and no one has to face these impossible choices. Out of the 14 states and D.C. that offer paid family and medical leave, eight allow workers to apply for benefits before their qualifying event happens, meaning they are not forced to take unpaid leave without confirmation of knowing if they will receive any benefits at all. This allows workers to mitigate their risk and reduce their stress during already demanding situations.

What can state leaders do to better support workers in California?

While California was a trailblazer in 2002 when it enacted the first paid family leave law in the country, it has now fallen behind. Workers should not have to take unpaid time off when they pay into and are eligible for benefits. It is time for California to catch up and give workers the security they deserve by letting them apply early for their benefits.

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California was home to over 11 million immigrants in 2023, making up 28% of the state population — the largest percentage of immigrant residents of any state.

Immigrants are essential to California’s labor force, with a total of 6.1 million immigrants employed in California from 2021 to 2023, representing 1 in 3 workers in the state. Immigrants and children of immigrants made up over half of all California workers during this same period. In addition, nearly half (45%) of working households in California included immigrants in 2023.

Immigrants are vital in creating the vibrant, prosperous communities and strong workforce that propelled California into becoming the fifth largest economy in the world. Recognizing the invaluable cultural and economic wealth immigrants bring to the state, policymakers should continue ending immigration status exclusions from our safety net programs to ensure all Californians have access to the supports they need to thrive.

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key takeaway

While domestic and sexual violence disproportionately affects women, transgender, non-binary, and women of color, prevention programs that address root causes like gender and racial inequities can significantly improve safety for all Californians.

All Californians should be able to live in safe environments, free from violence and fear. However, millions of Californians experience domestic and sexual violence every year and women, transgender, non-binary, and women of color are most likely to experience these types of violence.

Domestic and sexual violence prevention programs are proven ways to stop violence from occurring in the first place. Prevention programs take a proactive approach and seek to shift culture on racial and gender inequities. Examples of prevention work include educating people on healthy relationships, increasing economic security for families, and reducing systems and beliefs that can lead to violence. These programs have been shown to:

Improve the safety of school and community spaces,
Lead to significant community and structural changes,
Lead to sexual violence prevention being added to school district budgets,
Make physical spaces safer in order to reduce vulnerability to sexual violence,
Increase student conversations about sexual violence as a problem,
Reduce dating abuse, and
Result in substantial cost savings due to reductions in sexual violence-related costs.

How does California support domestic and sexual violence prevention?

Since 2018, California has provided small, one-time grants for prevention programs. The California Governor’s Office of Emergency Services (Cal OES) administers multiple grants with this one-time funding to support prevention efforts. There are also some federal funds available for prevention, but the large majority of federal funding for addressing domestic and sexual violence is for intervention only, and in fact, is prohibited from being used for prevention efforts. Despite domestic and sexual violence prevention’s proven effectiveness, state funding is relatively new and has been sporadic.

What organizations have received state prevention funding?

Many organizations across the state have received state funding in the form of Cal OES prevention grants. These grants are focused on supporting community-based organizations in the implementation of domestic and sexual violence prevention and education initiatives, especially those that focus on serving communities that are disproportionately impacted. Examples of organizations that have been able to increase their prevention efforts because of the state funding are described below.

Korean American Family Services

Korean American Family Services (KFAM) provides assistance to Korean Americans in the Greater Los Angeles area, especially women, children, and immigrants. This assistance includes mental health support, AAPI foster family and adoption services, social services, family intervention, and a gender-based violence program. They used the prevention funding to develop a culturally responsive, bilingual positive parenting program that provides education to parents on how to prevent violence from occurring in the first place.

Project Sister Family Services

Rainbow Services

Rainbow Services provides comprehensive survivor services in the Los Angeles area, including emergency shelter, transitional services, housing assistance, children’s education, and legal assistance. Rainbow’s prevention services focus on targeting youth, faith-based leaders, and businesses, and the prevention funding grants allow them to target those three communities and develop educational programming specific to those groups.

ACKNOWLEDGEMENT

Special thank you to Korean American Family Services, Project Sister Family Services, and Rainbow Services for providing the information included in these examples.

How has state prevention funding impacted what services organizations can provide?

Dedicated prevention funding has a meaningful impact on communities. Perspectives from these organizations demonstrate how funding has supported the services that can be provided.

Funding allowed grantees to expand existing prevention programs.
Funding allowed grantees to connect with community members in ways they had not been able to previously.

Funding allowed grantees to expand existing prevention programs.

For example, while KFAM had existing outreach programs that had mixed levels of success, they were able to create a new parenting training program that was also culturally responsive to the needs of their community members.
Additionally, Project Sister described how prevention funding allowed them to build on their training and presentations with students. More specifically, the funding allowed them to develop more long-term relationships with the schools, which is crucial for breaking generational cycles of violence.
Rainbow Services shared how the funding allowed them to transform their existing outreach program into a fully-fledged prevention program. They were able to make a strategic prevention plan for the first time ever, which allowed them to grow their prevention team and increase their reach within the community.

Funding allowed grantees to connect with community members in ways they had not been able to previously.

Rainbow Services explained that with their strategic plan they were able to go beyond individualized intervention approaches and work on shifting culture.
KFAM discussed how they had previously worked for years on outreach to community leaders to tackle domestic violence, but faced challenges with the stigma associated with domestic violence. However, their new parenting training did not have as much stigma as prior outreach efforts, which allowed them to reach out and connect directly with families, offer support, and create long-term relationships to ensure that families stay free from violence.
Project Sister described how although students received the prevention training in schools, the impacts were felt beyond the students. They have seen firsthand how students take home what they learn and apply their learning to their own families to improve relationships at home.

What would happen without ongoing domestic violence prevention funding?

Each organization recognized that their important work, which supports survivors and helps prevent domestic violence, is at the peril of sporadic state funding. Organizations describe how without these grants, they would not have any prevention funding to continue sustaining these programs.

Both Project Sister and Rainbow Services explained how they are not able to do more ongoing prevention education due to a lack of ongoing funding, and that the sustainability of current programs relies on the state’s grants.
KFAM shared that the only prevention funding they have is from the Cal OES grants. Although there is much more funding provided for intervention efforts, prevention grants allowed them to be more creative with programs to prevent violence in the first place, rather than only supporting survivors afterward.

Domestic and sexual violence prevention efforts take time. These programs work on shifting culture, which takes long-term planning and commitment. However, as the organizations in the examples all noted, organizations doing this critical work cannot commit to long term programming without permanent, ongoing funding. The governor’s proposed 2024-25 budget does not include any additional funding for domestic violence prevention, which puts these programs providing critical domestic violence prevention services at risk for termination.

No Californian should live in fear over their safety. In order to adequately protect Californians from domestic and sexual violence, the state should provide ongoing, sustained funding for prevention programs that can help stop the violence before it starts.

Health & Safety Net

Poverty & Inequality

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key takeaway

California’s unemployment benefits fall short, leaving many struggling to make ends meet when they lose work. State policymakers can raise unemployment benefits, ensuring this crucial support system adequately sustains Californians during job loss.

Unemployment benefits provide a critical safety net for many workers who lose their jobs, helping them to support their families while they seek to reenter the workforce. However, state unemployment benefits have not been raised in two decades and currently don’t provide enough money for Californians – particularly those with low incomes – to cover the cost of living. This points to the urgent need for California to increase state unemployment benefits so that workers can make ends meet when they lose work.

California’s unemployment benefits only replace up to half of a worker’s lost earnings. But many workers struggle to pay for food and rent even while working full-time. Covering the costs of living on half of their earnings is impossible. For the majority of California renters with low incomes who spend at least half of their income on rent, their entire unemployment benefit would go to rent if they don’t have other income sources. Or it might not even cover the full cost of rent, leaving them in debt, at risk of eviction, and with nothing left over to pay for other basic needs. For example, a worker who loses a full-time minimum wage job (at $16.90-per-hour in Los Angeles County) receives just $1,465 in monthly unemployment benefits, which falls $69 short of covering rent for a studio in Los Angeles.

Workers of color, including American Indian, Black, Latinx, and Pacific Islander Californians – and particularly women – are especially at risk of being unable to support their families while out of work because many have been segregated into low-paying jobs where unemployment benefits are too low to cover basic living costs. Insufficient benefits pose a particularly significant threat to the economic security of Black Californians, who consistently face twice the unemployment rate of white workers due to hiring discrimination and other barriers to work created through centuries of structural racism.

Losing a job would be less devastating if Californians could count on getting unemployment benefits that allow them to cover the costs of rent, food, and other basic needs while they search for work. State lawmakers should increase state unemployment benefits, especially for low-paid workers, and make sure that businesses uphold their responsibility to adequately fund this critical safety net for their workforce.

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Poverty & Inequality

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Revitalizing Unemployment Insurance in California

key takeaway

Unemployment Insurance is a Lifeline for California, But Low Benefits and Exclusions Undermine Its Effectiveness

Low Unemployment Insurance Benefits Exacerbate Racial and Gender Inequities

A Strong and Effective UI System Requires Adequate Financing: California Needs Major Reforms

Failing to Modernize UI Financing Costs All Californians

Raising and Indexing the Taxable Wage Base Is Critical to Improving UI Financing

What Is the Taxable Wage Base and Why Is It Important for Understanding How Unemployment Insurance Benefits Are Funded?

California Must Shift to Forward Financing of UI Benefits and Reform Experience Rating

Conclusion

You may also be interested in the following resources:

Human Impact: Federal Proposals Would Cause Widespread Harm

People With Disabilities Face Great Harm from Federal and State Budget Cuts

Stay in the know.

key takeaway

Poverty Rates in California Are at the Highest in Years

Poverty Rose Across Children, Adults, and Older Adults

Poverty Increased for All, Californians of Color Face Greater Hardship

Income Inequality Remains Stark in California

Policymakers Can Cut Poverty and Create a California for All

At the federal level, these include:

California policymakers can also do more to cut poverty across the state, including by:

You may also be interested in the following resources:

Human Impact: Federal Proposals Would Cause Widespread Harm

People With Disabilities Face Great Harm from Federal and State Budget Cuts

Stay in the know.

Explore More on Women’s Well-Being

The 2024 Women’s Well-Being Index was updated in collaboration with the California Commission on the Status of Women and Girls, which provided funding, communications, outreach, and engagement support.

You may also be interested in the following resources:

Human Impact: Federal Proposals Would Cause Widespread Harm

People With Disabilities Face Great Harm from Federal and State Budget Cuts

Stay in the know.

key takeaway

How does paid family leave in California work?

What are other states doing?

What can state leaders do to better support workers in California?

You may also be interested in the following resources:

Human Impact: Federal Proposals Would Cause Widespread Harm

People With Disabilities Face Great Harm from Federal and State Budget Cuts

Stay in the know.

You may also be interested in the following resources:

Human Impact: Federal Proposals Would Cause Widespread Harm

People With Disabilities Face Great Harm from Federal and State Budget Cuts

Stay in the know.

key takeaway

How does California support domestic and sexual violence prevention?

What organizations have received state prevention funding?

ACKNOWLEDGEMENT

How has state prevention funding impacted what services organizations can provide?

What would happen without ongoing domestic violence prevention funding?

You may also be interested in the following resources:

Human Impact: Federal Proposals Would Cause Widespread Harm

People With Disabilities Face Great Harm from Federal and State Budget Cuts

Stay in the know.

key takeaway

You may also be interested in the following resources:

Human Impact: Federal Proposals Would Cause Widespread Harm

People With Disabilities Face Great Harm from Federal and State Budget Cuts

Stay in the know.