Dan Walters

Dan Walters: High rate of poverty bites California

When the Census Bureau began calculating poverty a half-century ago – as a “war on poverty” became a hot issue in Washington – it devised a rather simple formula.

The formula defined income that would be counted – excluding non-cash income such as food stamps and housing subsidies – and applied it to a narrow “market basket” of food and other living necessities.

All the data were nationwide, with no adjustments for regional or local differentials.

By the official poverty index, California doesn’t fare too badly, with 17 percent of its residents impoverished, a bit above the national rate of 15.9 percent.

However, it’s long been recognized that the formula is flawed, not only because it excludes some kinds of income, but because its living costs are incomplete and there is no adjustment for the very wide differences in housing and other costs from state to state and community to community.

Responding to the criticism, the Census Bureau a few years ago promulgated an alternative method that addressed those deficiencies. And by that formula, California’s poverty rate climbed to 24.3 percent, the nation’s highest, due mostly its very high costs of housing.

Subsequently, the Public Policy Institute of California used a similar method to calculate poverty for the state’s 58 counties that revealed wide geographic differences.

Last week, United Ways of California released results of an even more sophisticated, cost-based study of poverty. Its “real cost measure” concluded that 31 percent of California’s households “struggle each month to meet basic needs,” also with wide variances among ethnic groups and communities.

Fifty-one percent of Latino households are impoverished, United Ways found, and 40 percent of African American families, much higher than whites and Asian Americans.

Local poverty rates ranged from 80 percent in inner-city Los Angeles to 9 percent in the affluent suburbs of Contra Costa County.

The United Ways study focused on housing costs, noting that rents for a two-bedroom housing unit were as much as four times as high in the Bay Area as in some rural communities.

So there it is, still another piece of evidence – as if we needed one – confirming that the “two-tier society” economists and demographers projected for California three decades ago is real.

This stratification occurred as California was evolving into a solidly blue state politically, dominated by liberal politicians who profess concern for the plight of impoverished families.

Their response, generally, has been to advocate more spending for welfare, health care, child care and other public services, and California’s array of those programs is among the nation’s broadest and least restrictive.

At the same time, however, their policies have – inadvertently – made poverty worse, such as environmental and workforce decrees that make housing construction, utilities and automobile fuel more expensive, discourage creation of good-paying jobs, and neglect work-related education.

We still have one of the nation’s highest unemployment rates. While “safety net” services are necessary stopgaps, they shouldn’t become permanent lifestyles for able-bodied adults.

If California politicians really want to cure poverty, they should remember that a good job is always the best medicine.