Conference Workshop on March 4th Will Explore Strategies for Reducing Poverty in California

Millions of Californians, many of them children, live in poverty today. By one measure California has the highest poverty rate in the nation. Public policies can address poverty, and the deep economic hardship in California calls for a sustained, multifaceted response from state leaders. What specifically should be done?

An afternoon workshop at Policy Insights 2015, the California Budget Project’s annual conference coming up on March 4th in Sacramento, will take a close look at policy strategies for addressing economic hardship in our state and their potential impact on low-income individuals and families. This session will feature the following panelists:

• Speaker of the Assembly Toni G. Atkins
• Senator Mark Leno, chair, Senate Budget and Fiscal Review Committee
• Assemblymember Mark Stone, member, Assembly Committee on Human Services
• Erica Williams, assistant director of state fiscal research, Center on Budget and Policy Priorities
• Chris Hoene, executive director, California Budget Project (Moderator)

We hope you’ll join us for this and other sessions — including the keynote address from Ezra Klein, editor-in-chief of Vox.com — that will explore the most pressing issues and questions facing our state. You’ll also be helping the California Budget Project celebrate our 20th anniversary.

Early-bird registration ends February 19th, so register today to save 15% off the full registration.

Questions? Contact us at cbp@cbp.org or 916-444-0500. We look forward to seeing you on March 4th!

— Steven Bliss

Economic Context of the 2015-16 Budget: A Recovery That Is Leaving Many Californians Behind

California’s state budget is a primary funding source for many public services and systems that support working families and help them climb the economic ladder. Unfortunately, many of these areas of public investment remain underfunded and undersupported today. One example is California’s subsidized child care system, which helps parents work more hours by giving them affordable child care options. Funding for child care and preschool programs remains nearly one-third below the pre-recession level.  Other areas, such as assistance for low-income seniors and people with disabilities (SSI/SSP) and the state’s system of public higher education, also are undersupported even as the state’s revenues surpass where they were before the budget shortfalls caused by the Great Recession.

Providing support for economic security and opportunity is especially important given that so many in California are still struggling in the current recovery. While California’s economy has improved markedly since the worst years of the Great Recession, many regions are still coping with high rates of poverty and joblessness. For these parts of the state, it still feels like California is in a recession.

The latest county-level Census figures on poverty drive home this point. These figures combine poverty estimates from the American Community Survey with other administrative data to generate estimates of poverty for smaller geographic areas. (This process results in statewide poverty rates that differ from those published last fall.) The new data show that 16.8 percent of all Californians, and 23.5 percent of all California children, lived in poverty in 2013. In other words, nearly one in four California children lived in households with incomes below the federal poverty line ($23,624 for a family of four with two children in 2013). Within California there are large disparities among regions (see table). While counties in the San Francisco Bay Area all had poverty rates that were lower than the state average, counties in the San Joaquin Valley all had above-average rates of poverty and child poverty. Fresno County had the highest rates of poverty in 2013, with 28.6 percent of all people living in poverty and 42.0 percent of all children living in poverty.

[Click table to view at full size]

Unemployment also remains worryingly high in regions throughout California. In the third quarter of 2014 (the last full quarter for which data are available), 11 counties had unemployment rates in the double digits, and more than half of these counties were in the San Joaquin Valley. The county with the highest unemployment rate was Imperial County in the southern part of the state, where more than one in four workers (26.9 percent) were unemployed.

Poverty and unemployment are just two measures of an economy’s health, yet other measures of economic well-being — such as income or food insecurity — also show that California’s recovery is not leading to economic gains for many families. Again, such measures show a large regional disparity and a California that is deeply segmented not just along income levels, but by geographic area as well.

When Governor Brown releases his proposed 2015-16 budget this week, there is likely to be a large focus on an “either/or” choice between responsible budgeting and committing more state dollars to underfunded programs. This is a false choice given the economic realities faced by many Californians today. The 2015-16 budget that is eventually enacted must start to address on-the-ground economic conditions in much of California. This means that the state budget must take on issues of poverty and joblessness and help boost an economy that is leaving many Californians behind.

— Luke Reidenbach

New Census Data Show That California’s Poverty Rate Remained High in 2012, Despite Economic Recovery

A new CBP report looks at the Census Bureau data released yesterday, which show that despite the state’s emerging economic recovery, California’s poverty rate was essentially unchanged in 2012 — at 15.9 percent — and remained about one-third higher than in 2006, the year before the recession began. The new Census data show that more than 6 million Californians had incomes below the federal poverty line and that 2.1 million of the state’s children — nearly one out of four — were living in poverty.

The new Census data also show that the state’s median household income in 2012 was $57,020, nearly 10 percent below what it was in 2006, after adjusting for inflation. One positive trend in the new Census data is in the area of health coverage, with a significant year-to-year drop in the share of Californians who are uninsured as well as longer-term gains in providing health coverage for children.

Like our recent report on employment and earnings in California, this new analysis underscores that many of the state’s residents continue to face severe economic challenges in the aftermath of the Great Recession. That’s why it’s critical that policymakers sustain a strong social safety net for individuals and families, while also making the necessary public investments in education, job-related services and supports, and other foundations of widely shared economic growth.

— Steven Bliss

Key Facts About the Governor’s Proposed Budget, Part 5: Many Californians Still Hurting in the Aftermath of the Recession

This is the latest in a CBP chart series highlighting some of the most important aspects of Governor Brown’s 2013-14 budget proposal and the context for it.

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As pointed out earlier in this chart series, the significant new revenues approved by voters in November have positioned California to turn the corner on years of severe budget shortfalls. But with the state’s fiscal situation improving, it is important that policymakers not lose sight of the fact that millions of Californians continue to suffer in the wake of the Great Recession.

California’s poverty rate is at its highest point in 15 years and has increased by more than one third — from 12.2 percent to 16.9 percent — since the year before the Great Recession began. About one in six Californians were living in poverty in 2011, according to the most recent Census figures. That means that there are more Californians living in poverty than there are residents of the cities of Los Angeles, San Diego, and San Francisco combined.

California’s child poverty rate is even higher than that of the population as a whole, with approximately one out of four children (24.3 percent) living in poverty in 2011. The long-term consequences for children raised in poverty include lower levels of educational attainment and lower earnings as adults. Childhood poverty not only can mean a life of hardship for individual children — a reason for concern in its own right — but also can impose significant costs on society as a whole through these children’s lost potential.

Meanwhile, California’s weak job market poses a serious and persistent challenge. The state’s current jobless rate of 9.8 percent is still nearly double the rate before the Great Recession began. Only recently — in November 2012 — did the jobless rate finally reach single digits after spending 45 consecutive months in double figures. Long-term unemployment remains near a record high, with more than one in three of California’s unemployed reporting that they have been searching for a job for at least one year.

Our state’s budget policy choices should reflect the fact that many Californians are still confronting the harsh aftereffects of the Great Recession. As lawmakers consider the Governor’s budget proposal and work toward a budget agreement in the coming months, priority should be given to strengthening programs and services — such as child care — that help individuals find and keep jobs and also to ensuring a strong social safety net for those struggling to make ends meet. Wise investment of state dollars can help blunt the impact of our state’s economic challenges while also speeding the state’s recovery and laying the groundwork for widely shared prosperity over the long term.

— Phaelen Parker

New Data Show Big Jump in Poverty in California

New Census Bureau data released today – and analyzed in a new CBP publication – show that the recession is taking a significant toll on many Californians. One of the most startling findings is that poverty has jumped substantially. The poverty rate for all Californians rose from 12.7 percent in 2007 to 14.6 percent in 2008, leaving 5.3 million Californians living below the federal poverty line ($21,834 for a family of four with two children in 2008). The share of California’s children living in poverty also skyrocketed in 2008, rising above 20 percent for the first time since 1999. The new data also show that the share of Californians under the age of 65 with job-based health coverage slipped to 56.2 percent in 2008, continuing a multiyear downward trend.

Perhaps the most sobering aspect of these glum statistics is that they represent only the tip of the iceberg. The state’s economy deteriorated further in 2009, as we showed in our recent Labor Day report, so the Census Bureau data released today show just the beginning of what could become a substantial decline in living standards for low- and middle-income Californians.

All of this points to the need for more federal assistance, including more aid to prevent further state budget cuts, an extension of unemployment insurance benefits, and the passage of comprehensive health reform.

— Scott Graves