Why one of America’s richest states is also its poorest

If you were to ask most Americans which is the poorest state in the nation, they might say Alabama or Mississippi, with their low average incomes and concentrations of African-American poverty. In fact, the state with the largest share of people in poverty is California. As the most populous state, it also has by far the largest number of poor people, 7.4m.

Many measures of poverty exist. The official poverty line is used as a guide as to who should get federal assistance. The state where the largest share of people fall below that line is Mississippi; California is roughly in the middle. But the official poverty line is the same in every state and takes no account of different living costs or of public assistance. So in 2011 the Census Bureau came up with a Supplemental Poverty Measure (SPM), which most social scientists think a better way of comparing levels of poverty across the country. By this yardstick, 19% of Californians were poor in the three years 2015, 2016 and 2017, the highest rate in the country excluding the special case of Washington, DC. The national average was 14.1%.

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