California leaders, especially Gov. Gavin Newsom, rarely miss a chance to tout the state’s economic muscle. Newsom has called California “the center of the universe” and “America’s coming attraction,” pointing to its status as one of the world’s largest economies as evidence that the rest of the country — or the world — could learn a thing or two from the Golden State’s approach.
But newly released federal poverty data offers a more complicated picture, one that Newsom’s talking points tend to leave out.
The U.S. Census Bureau this week published updated poverty figures showing that California’s official poverty rate stands at 10.7%, matching the national average. That’s the standard measure used for decades to determine eligibility for various federal aid programs.
A more telling number, though, is the bureau’s “supplemental poverty measure,” which factors in regional living costs, housing expenses and other financial pressures often left out of the traditional formula. By that measure, California’s poverty rate jumps to 17.8% — well above the national rate of 13%, and slightly higher than the 17.7% recorded in the previous report.
Still, there’s a silver lining buried in the numbers: for the first time in years, California is no longer at the very bottom. Louisiana has now surpassed the Golden State, posting a supplemental poverty rate of 19.8%, after the two states were previously tied.
The reasons behind high poverty rates, however, differ sharply between the two states. In Louisiana and much of the South, the driving force is low wages. In California, it’s the opposite problem — incomes may be higher, but the state’s sky-high cost of living, particularly housing, along with steep utility and transportation costs, erodes much of that advantage.
Separate research from the Public Policy Institute of California and Stanford University’s Center on Poverty and Inequality backs up the Census Bureau’s findings. Using a similar cost-adjusted approach known as the California Poverty Measure, the groups calculated the state’s 2024 poverty rate at 17.4%, closely mirroring the federal figures.
Their analysis went a step further, breaking down poverty rates by county and identifying Californians who fall into a “near poor” category — those earning up to 150% of the federal poverty threshold, or roughly $42,600 a year for a family. When combined with the state’s poor population, the research found that 35% of Californians were either poor or near poor in 2024, struggling to afford housing, food and other basic needs.
That figure lines up closely with enrollment in Medi-Cal, California’s health insurance program for low-income residents. Roughly 13.9 million Californians — also about 35% of the state’s population — currently rely on Medi-Cal, a program whose price tag has ballooned to $222 billion and now represents one of the largest components of the state budget.
Medi-Cal illustrates both the reach of California’s safety net and its limitations. The state can cushion the effects of poverty through public spending, but it cannot spend its way out of the underlying problem. Meaningful, lasting reductions in poverty will require either a drop in housing and living costs or a resurgence of the kind of middle-class job growth that once defined California’s economy. Right now, neither trend is moving in a favorable direction, leaving more than a third of Californians caught in a persistent lower economic tier.
If Newsom does launch a bid for the White House, it’s a near certainty that his political opponents will seize on these poverty figures to challenge the rosy portrait he often paints of the state he leads.
Original source: CalMatters
