California is Richest, Poorest State

It’s fair to say that California is the richest state in the nation. We have more millionaires than any other state, and mansions dot our coastal bluffs and inland canyons.

But California is also, arguably, the poorest state in the nation. We have more people in poverty — 6.1 million — and more children in poverty than any other state.

Even more ominously, a new measure of poverty shows that California has the highest percentage of its population living below the poverty line.

By the traditional measure, California’s poverty rate is 16.6 percent, 20th in the nation. But the new, supplemental measure released last year by the Census Bureau puts California at the top of the list with a poverty rate of 23.5 percent.

Unlike the official measure, the supplemental poverty measure reflects the cost of living – including housing – in a state and also reflects transfer payments such as food and housing subsidies and tax credits.

By either measure, though, it is clear that California has a lot of poor people, far more than its glittering image would suggest.

Part of this is a reflection of our diversity, and the character of our recent population growth. We are a state of immigrants, and the wave of immigration from Latin America that peaked in the 1990s brought millions of desperately poor people to California.

These immigrants were not just penniless, but many also had little formal education. They had very little capacity to work in any job outside of agriculture and menial labor. They were, largely, stuck at the bottom rung of the economic ladder. Their lives here might have been better than the conditions they left behind, but still they formed a large and stubborn bubble in the state’s poverty numbers.

Immigration also helps explain the regional differences in poverty in California. Immigrants tended to concentrate in counties where agriculture was big and the cost of living was low. A look at the poverty numbers by county shows the contrast.

The counties with the lowest poverty rates (using the traditional measure) are generally those near the coast, places like Marin, San Mateo and Santa Clara counties. Some foothill counties are also on this list: Placer and El Dorado near Lake Tahoe, and Calaveras County in the Gold Country.

On the other extreme are, for the most part, counties in the Central Valley and other agricultural regions. In Merced County, more than one-quarter of the households have incomes below the poverty line. The situation is similar in Fresno, Kern, Tulare and Imperial counties. In fact, three of the five most impoverished metropolitan areas in the nation are in the Central Valley.

The numbers also show the connection between poverty and family structure. Families headed by a single parent are much more likely to be living in poverty. In the ten counties with the lowest poverty rates, 25 percent of families have a single parent. But in the ten counties with the highest poverty rates, 36 percent of the families are headed by one parent. And in those counties, more than half the families with a single mother are living in poverty.

Education is also correlated with poverty. The counties with the lowest high school drop out rates, like Placer, Calaveras, Marin and El Dorado, also tend to have the lowest poverty rates. And the same is true in reverse: some of the poorest counties, like Kings, San Joaquin, Yuba and Fresno, also have some of the highest rates of high school drop outs. It’s not clear whether failing to complete high school causes poverty or is caused by it, or both, but the two are definitely related.

The good news for California is that second-generation immigrants tend to be better educated than their parents, speak English better, and are less likely to be living in poverty. By the third generation, the gap between the grandchildren of immigrants and other Californians becomes shrinks even further. So with immigration having peaked in the early 1990s, time will slowly make at least a dent in these numbers.

But California still has a long way to go. As the economy improves and the wealthy and middle-income people see their situations improve, the state needs to be careful not to sustain a forgotten underclass.

Especially in the Central Valley, but in pockets of poverty throughout the state, we need a concerted, focused effort to change the things that are correlated with poverty — from high school drop-outs to single parenthood.

That won’t eliminate poverty. But if every child born here at least has an equal chance to join the economic mainstream, that would be a big start.

via Fox & Hounds: Keeping Tabs on California Business & Politics http://www.foxandhoundsdaily.com/2013/05/california-is-richest-poorest-state/