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Analysis: Intelligent Action Needed to Reduce California’s High Poverty Rate

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April 19, 2017

While California is known for being one of the nation’s wealthiest states with a median household income of approximately $61,818 per year, and with a larger economy than all but five nations worldwide, we are also becoming the United States’ leader in poverty and childhood poverty rates.

According to the Official Poverty Measure (OPM) of the United States Census Bureau, approximately 5.8 Californians live in poverty. The measure sets the poverty threshold at $24,339 for total yearly household income for a household of four (two adults and two related children), $12,486 for a single person under 65 years of age, and $11,511 for individuals 65 years and older. While not taking into account many pertinent geographical factors, under this official measure, this number amounts to 15 percent of Californians living in poverty. Under this limited metric, California (by far the most populous state) ranks twentieth for percentage of the population living under the poverty level, while it ranks tenth in the nation for having the highest median household income.

However, while these numbers are already glaring, the official measure does not take into account important factors that affect the reality of poverty in our state. Aware of these limitations, the U.S. Census Bureau publishes a Supplemental Poverty Measure (SPM), which makes “adjustments in the official poverty threshold to account for geographic price level differences, particularly for differences in the cost of shelter as measured by rents.” According to the SPM, California ranks highest compared to the rest of the states, with approximately 7.9 Californians living in poverty. This is about 1.5 million more than the runner up, Texas which has the second highest number of individuals in poverty.

According to this SPM, 5.6 percent more Californians live in poverty than were counted in the OPM, bringing us to 20.6 percent (the highest in the country, second only to the District of Columbia in terms of percentage but certainly not in terms of sum total in poverty). Comparatively, in Texas, which through the supplemental measure actually saw a reduction from the official number, the bureau reports 14.9 percent live in poverty.

Similarly, the Stanford Center on Poverty and Inequality along with the Public Policy Institute of California (PPIC), closely modeling their own research off of the Census Bureau’s Supplemental Poverty Measure, have conducted a joint study on poverty in California called the California Poverty Measure (CPM). Modeled after the SPM, but taking into account additional factors and pertinent family groupings for the sake of measuring poverty rates, the CPM also found that 20.6 percent of Californians are living in poverty. Among these, the rate is highest for children, of whom 23.1 percent – nearly one in every four children – live in poverty.

Internationally, on the other hand, according to the United Nations and the World Bank, global extreme poverty has been measurably reduced in recent decades. The United Nations reports that “extreme poverty rates have been cut by more than half since 1990,” a report similarly confirmed by the World Bank, which states that the international community reached its first goal of cutting in half the 1990 rate of 35 percent “five years ahead of schedule, in 2010.” While it is still true that global extreme poverty remains “unacceptably high” according to the World Bank, these gains in recent decades show some promise for the reduction of poverty internationally. The World Bank has set a goal to reduce poverty to 3 percent of the world population by 2030.

With such global trends toward economic improvement and with such a comparatively great deal of economic resources in our own state, which constitutes the sixth largest economy globally, we must take notice of California’s rate of poverty, and the sheer number of our brothers and sisters living in poverty in this great state. Additional efforts must be made to insure that California reduces poverty dramatically, which has such a significant effect on families and children.

AB 1520, the Lifting Children and Families Out of Poverty Act of 2017, is one significant course by which we can accomplish this great task for the common good, the good of our fellow Californians. This bill by Assemblywoman Autumn Burke (D-Inglewood), is sponsored by GRACE (Gather, Respect, Advocate, Change, Engage; founded by the Daughters of Charity), who have conducted research along with the Stanford Center on Poverty and Inequality on poverty and effective poverty reduction in California. AB 1520 aims, through multifaceted initiatives, at the goal of reducing poverty in half over 20 years.

This bill sets up a framework and legislative findings intent on establishing a structure of accountability in order to achieve this goal. Included in this framework is the intention to “fund programs or services that have been proven to reduce child poverty in California” as well as to “fund future innovations that are shown to achieve similar outcomes.” The bill therefore establishes criterion for governmental courses of action based on means and methods that are proven and studied to efficiently and cost effectively achieve measurable results in poverty reduction.

Among these proven means of constructive and essential assistance the bill outlines state expenditures for child care and early childhood education, home visiting programs, after school and summer school programs, work force development, Medi-Cal expansion, affordable housing, Earned Income Tax Credit expansion, CalWORKs increases and investment in Promise Zones.

It is our responsibility as Californians, with so many resources in our great state, not to neglect the children and families living in poverty among us. We must make use of intelligent, cost effective and efficient means to respond to the great burden of poverty experienced by one in five Californians, and nearly one in four children in California.