In the first quarter of 2023, California witnessed a rise in its poverty rate, according to the most recent data analyzed by the Public Policy Institute of California. The poverty rate increased from 11.7% in 2021 to 13.2%, affecting approximately 5 million individuals.
This increase in poverty can be attributed largely to the impact of safety net programs. During the pandemic, the federal government extended these social safety net initiatives, such as tax credits for families with children and emergency food assistance, resulting in a reduction in poverty rates nationwide. However, as these extensions expired late last year and earlier this year, poverty rates surged.
Without these safety net programs, an estimated 3.2 million more Californians would be living in poverty. The expansion of CalFresh food assistance alone prevented 1.1 million people from falling into poverty during the first quarter of 2023 when the expansion ended.
Notably, Latinos constitute around half of the Californian population living in poverty, despite making up 39.7% of the total population. In comparison, approximately 10% of white Californians live in poverty.
Child poverty has seen a significant increase, rising from 9% in 2021 to about 14% in early 2023, primarily due to the expiration of social safety net expansions. In 2019, the child poverty rate was roughly 18%. Senior Californians also faced a higher poverty rate at 15%, in contrast to around 13% for adults aged 18 to 64.
Poverty rates in California also exhibited regional disparities, with San Diego and Los Angeles counties having the highest poverty rates at about 15%, while the Central Valley and Sierra counties had the lowest at about 11%. This discrepancy can be attributed to the high cost of living in Southern California counties and demographic variations among these regions. Los Angeles and San Diego have larger populations of Latino and immigrant communities, which experience higher poverty rates.
The Public Policy Institute’s California Poverty Measure considers factors such as the value of government assistance and a region’s cost of living, which the federal poverty rate does not. Social safety net programs have a more substantial impact on poverty in counties with lower living costs. This is because, in these counties, impoverished Californians may have incomes slightly above federal poverty thresholds, making them ineligible for significant aid.
For instance, research indicates that social safety net programs would result in a poverty increase of 14.4 points in the Central Valley and Sierra region, but only 4.3 points in the Bay Area, as the report highlights.
The study also delves into the employment status of Californians in poverty. Surprisingly, most individuals in poverty are working, with more than 8 in 10 of California’s 1.3 million working poor holding year-round employment. Almost half of them work full-time, while 37% work part-time, with the latter group experiencing higher poverty rates.
Certain industries, such as service, agriculture, and building and grounds maintenance, have a higher prevalence of poverty among their workers. For instance, those in building and grounds maintenance have a poverty rate of 20%, while workers in food preparation and service experience a 16% poverty rate.
The report also sheds light on how the working poor manage their finances. Many of them share living arrangements with family members to make ends meet, with 82% of impoverished Californians cohabiting with other adult family members. These individuals typically allocate the majority of their earnings towards daily expenses and bills, with working poor adults earning an average annual income of $28,000.
