In a surprising deviation from the national trend, California experienced a slight improvement in one measure of poverty as its economy rebounded and its population shrank. According to the Census Bureau, there were 5.14 million California residents living below the poverty level during the three-year period ending in 2022, a decrease of 18,000 from the previous year. This is in contrast to a national increase of 777,000 people living in poverty caused by high inflation and reduced pandemic stimulus.
Using the Census Bureau’s “supplemental poverty measure,” which takes into account government assistance and the cost of living in each state, California had the highest number of residents living in poverty, followed by Texas, Florida, New York, and North Carolina.
The high cost of living in California, particularly housing expenses, presents a challenge for many households. Additionally, major industries in the state, such as hospitality, personal services, and agriculture, often do not provide wages that can adequately support a family budget.
So why did California’s poverty rate decrease while the rest of the country saw an increase? Texas had the largest increase in poverty, followed by Florida, New Jersey, Washington, and Missouri.
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California’s recovery from the economic impact of the pandemic lagged behind other states, but eventually saw significant job growth with the addition of 945,000 jobs in 2022, the highest number among all states. The state also maintained economic aid for a longer period compared to other states, which helped reduce poverty rates.
It is also important to note that California’s population is decreasing, including individuals who are struggling financially.
A Glimmer of Hope
The 18,000 decrease in California’s poverty rate marked the eighth best performance in the nation. While poverty rates declined in 22 other states, including Ohio, New York, Tennessee, Louisiana, and Colorado, California’s decline was relatively small compared to previous years.
However, California still faces significant challenges in reducing poverty. The state’s poverty rate of 13.2% is higher than the national average of 9.8% and second only to the District of Columbia. Additionally, California accounts for 12% of the U.S. population and 16% of the nation’s poor.
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The poverty rate in California is topped only by the District of Columbia, followed by Florida, Mississippi, New York, and Texas.
In contrast, Maine has the lowest poverty rate in the nation at 4.6%, followed by Wisconsin and Minnesota.
The Impact of Population
There is an interesting correlation between population changes and poverty rates among states. In California’s case, as its population decreased by 136,000, the state experienced a decline in poverty. Illinois saw a population decrease of 172,000 with a small decrease in poverty, while New York saw a population decrease of 107,000 and a significant decrease in poverty.
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On the other hand, Texas and Florida saw population increases of 413,000 and 305,000, respectively, which coincided with the highest increases in poverty rates. While these states implemented aggressive cuts to pandemic-era benefits to encourage more people to return to work, it is likely that some impoverished residents from expensive states like California, Illinois, and New York moved to more affordable areas such as Texas and Florida.
This is one consequence of living in a high-cost state.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]
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