Nearly 8 million Californians — 1 in 5 state residents (20.6 percent) — cannot adequately support themselves and their families. This is according to new Census figures released this morning based on the Supplemental Poverty Measure (SPM), a more accurate indicator of economic hardship than the official poverty measure. California also continues to have the highest poverty rate in the nation based on the SPM.
The new Census data also show that:
- California’s high housing costs are a key obstacle preventing more people from getting ahead. The SPM improves on the official poverty measure by better accounting for differences in the cost of living across the US. When California’s high housing costs are factored in, a much larger share of the state’s population is living in poverty: 20.6 percent under the SPM, compared to 15.0 percent under the official measure. Accounting for housing costs boosts California’s poverty rate to the highest of any state, up from 17th highest under the official poverty measure.
- Public investments improve the lives of millions of Californians. The SPM factors in a broader array of resources that people use to meet their basic needs, making it possible to gauge the extent to which public investments reduce poverty. Major federal and state programs — including Social Security, CalFresh food assistance, and tax credits for working families, such as the federal Earned Income Tax Credit (EITC) and child tax credit — lifted an estimated 4.9 million Californians, including 1.4 million children, above the poverty line each year, on average, between 2009 and 2012. Without these critical investments, millions more Californians would be struggling to get by.
The new poverty figures out today underscore the urgent need for California’s leaders to do more to help individuals and families who are struggling. In particular, the SPM shows that while public investments help to reduce hardship, they need to go further in a high-cost state like California where a majority of low-income residents spend over half of their incomes on housing. Policymakers can increase economic security and opportunity in our state by investing in good jobs, affordable housing, and a strong safety net; making it easier for people to save for emergencies and build a secure retirement; and allowing more families to access high-quality, affordable child care, preschool, and higher education so that children and youth have greater opportunities to move up the economic ladder. Prioritizing these types of investments would allow more people to fully contribute to our communities and economy and would lay the groundwork for a more prosperous future for California.
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