California Has One Of The Nation's Highest Poverty Rates, Again

Sep 13, 2018

As housing prices continue to climb in California, experts say measures to bring down those costs, and the continuation of assistance programs such as Medicaid and food assistance, will be crucial for families on the threshold of poverty.

New data from the U.S. Census Bureau’s supplemental poverty measure shows roughly 7.5 million Californians — about 19 percent of the state population — live in poverty. California is one of the three states tied for highest poverty rate, alongside Florida and Louisiana. The poverty rate is 14 percent for the U.S.

The supplemental poverty measure takes into account factors such as the cost of housing and health care. Under the Census’ standard poverty measure, which is based strictly on income, California’s poverty rate is 13.4 percent, closer to the national average of 12.9 percent.

Sara Kimberlin, senior policy analyst at the nonprofit California Budget and Policy Center, said the supplemental rate is a more accurate measure because the cost of living is so different from state to state.

And in California, she said rents are rising more quickly than earnings.

“A really key reason why California’s poverty rate is so high is that we have very high housing costs in many parts of the state,” she said. “And even in areas of the state where housing costs are not as high, many people struggle with high housing cost burden.”

Because so much of people’s pocket money is going toward rent or mortgage, they’re relying more heavily on state and federal assistance for food and child care costs. Many are also seeking out state or federally subsidized medical care.

The number of uninsured Californians has dropped significantly in the past few years as the number of people enrolled in Medi-Cal and in Covered California, a public health insurance exchange created under the Affordable Care Act, has increased.

Roughly 7.2 percent of Californians went without health coverage in 2017, compared to 17.2 percent in 2013, before full implementation of the health care law.

But the number of uninsured stayed essentially the same between 2016 and 2017. Scott Graves, director of research for the center, said the “fierce headwinds coming out of Washington D.C. have limited the state’s ability to make more progress over the last year.”

He’s referring to multiple federal efforts to repeal the Affordable Care Act and pull back subsidies for states’ individual marketplaces. The Trump administration has also moved to add work requirements to Medicaid eligibility, and bring back bare-bones insurance plans that don’t meet Obamacare requirements such as covering pre-existing conditions.

Graves said these actions have created “a tremendous cloud of uncertainty around health care reform” that has prevented policy makers from expanding health care assistance programs. An ambitious package that would have expanded Medi-Cal eligibility and boosted subsidies for people on Covered California failed in the state legislature this year.

“If a family has access to Medi-Cal, they’re not going to have high out of pocket costs for health care,” Sara Kimberlin said. “They’ll have more income available to pay for basic needs. And so their income will be closer to the poverty threshold or above the poverty threshold.

She said a combination of increasing government assistance programs and progressive housing policies would be necessary to bring California’s poverty rate down.

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