Dan Walters

Dan Walters: California’s poverty conundrum

The Census Bureau reported recently that 15 percent of California’s 38 million residents were living in poverty last year, the 20th highest rate in the nation.

However, an experimental Census Bureau method of gauging poverty, which includes a cost-of-living factor, puts California’s rate at more than 23 percent, the nation’s highest.

And now the Public Policy Institute of California, using a new measure that’s similar in thrust to the alternative Census Bureau method, places it at 22 percent, meaning more than 8 million Californians are poverty-stricken, 2 million more than the official number.

In the overall context, the new data confirm – not for the first time – that California has evolved into a two-tier society.

A companion study by the Stanford Center on Poverty and Inequality reveals that by the new PPIC measure, poverty rates of white, Asian and (surprisingly) black Californians, 13.8 percent, 19 percent and 20.1 percent, fall below the statewide average.

Meanwhile the rate of Latinos, who are now the state’s largest ethnic group, is much higher at 32.2 percent. And immigrants’ poverty rate, 29.9 percent, is half-again higher than the 19.2 percent rate of native-born Californians.

The PPIC report shows, much like the Census Bureau alternative, that wide variances in the cost of living, especially the cost of housing, are big factors in our economic well-being.

Take, for example, El Dorado County, east of Sacramento. It has one of the state’s higher personal income levels, so it’s not surprising that it has PPIC’s lowest poverty level, 13.6 percent.

However, the second-lowest, 13.7 percent, is found not many miles to the northwest in Yuba and Sutter counties, whose levels of personal income are among the state’s lowest.

Why? It’s mostly because rents and other housing costs in Yuba/Sutter are relatively low.

High housing costs explain why high-income communities, such as those in the San Francisco Bay Area, also have relatively high poverty rates, such as the 23.4 percent in San Francisco itself.

Los Angeles County, with more than a quarter of the state’s population and a huge Latino population, also has high housing costs, translating into the highest poverty rate, 26.9 percent.

Welfare and other “safety net” programs, as the PPIC report points out, ameliorate the poverty rates for their recipients, but it’s obvious that they cannot, by themselves, cure California’s socioeconomic stratification.

Improving educational achievement and lowering dropout rates among low-income and Latino students – the professed goals of Gov. Jerry Brown’s education finance overhaul – would be good steps. And lower housing costs would help.

Ultimately, however, making California more attractive to job-creating investment would be the most powerful antidote to our shameful poverty rate.