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California, typically one of the most prosperous and progressive states, is also one of the poorest.
That’s according to new data from the US Census Bureau that offers insight into the economic status of people in California and the nation. The annual release of survey data measures income, poverty and insurance status.
For California, that means another reminder that the state’s poverty rate of 18.2 percent is exceeded only by Washington DC, which has a poverty rate of 18.4 percent when you account for the cost of living. It accounts for about 1 in every six residents.
The state’s poverty rate in 2018 was about 5 percentage points higher than the national average of 13.2 percent, using the “supplemental poverty measure” that accounts for the cost of living in each state, namely food, clothing, housing and utilities. Only states in the Deep South like Louisiana, Mississippi and Florida came close with poverty rates floating around 16 percent.
In recent years the federal government has released two measures of poverty. The “official measure” is used to determine eligibility for government programs. Researchers, particularly in California, say the supplemental poverty measure best captures the state’s high cost of living.
The state’s share of poor residents has steadily fallen from 20.6 percent in 2015. Policy experts say the data reflect California’s efforts and future challenges.
“The data point to two key challenges for the state. One is that a key driver of our high poverty rate is the relatively high cost of living in a lot of parts of California,” said Sara Kimberlin, a senior policy analyst with the California Budget and Policy Center.
“At the same time, earnings except for those at the highest end of the wage spectrum have seen wages that have not really grown in recent years.”
Overall, the report was a mix of grim and expected new figures. Still, the numbers are a striking contrast to the state’s efforts to combat poverty, raise wages and provide insurance for all its residents.
Nationwide, the median household income rose by about 1 percent to $63,179.
The uninsured rate ticked up by one-tenth of a percent, hardly a surge but also the first time the rate grew since the state expanded Medi-Cal eligibility. Capping off seven years of consistent declines, the uninsured rate is technically still 7.2 percent.
The state’s insurance rate has essentially “plateaued” in the last two years, said Shannon McConville, a health care researcher at the Public Policy Institute of California. “We’re going to need to see additional policy changes if we want to drive that down lower.”
California has been the most aggressive proponent of expanding access to public insurance programs to as many of its residents as possible, including low-income undocumented children. Lawmakers recently agreed to expand coverage to undocumented residents age 25 and younger.
Gov. Gavin Newsom signed bills into law that would also resurrect the so-called individual mandate in the state, the controversial provision of the Affordable Care Act that penalized people for not having insurance. That provision, according to IRS data, was often borne by people earning less than $50,000. Congress, with the support of the Donald Trump administration, agreed to abolish the rule in 2017.
State lawmakers also increased subsidy eligibility for individuals making as much as $75,000.
Experts say to watch next year to see if the new laws have any effect on the uninsured rate.
“California is definitely one of the states leading the way in coming as close as we have in American History in ensuring everyone residing there has health coverage,” said Indivar Dutta-Gupta, who directs Georgetown University’s Center on Poverty and Inequality and the Economic Security and Opportunity Initiative.
“The last few percentage points of people you’re trying to pull into health coverage may be the toughest group because political limitations and changing policies.”