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California has Highest U.S. Poverty Rate


That there are more poor folks living in California than any other state is unsurprising, inasmuch as California boasts at least 12 million more residents than any other state.

What surprised us was the report last week by the Census Bureau indicating that the Golden State not only has the nation's largest poor population — a three-year average of 6.1 million from 2011-13 — but also the nation's largest percentage of poor — some 23.4 percent over that three-year span.

The reason we were so taken aback was that the Census Bureau reported in September that California's official poverty rate was more like 14.9 percent. Then, a mere month later, the bureau reported that the rate actually is much higher.

As it turns out, the discrepancy in California's differing poverty numbers make perfect sense.

The official rate is based on a household's money income before taxes and does not include noncash benefits.

The nonofficial "supplemental poverty measure" takes into account a household's money income as well as such in-kind benefits as nutritional assistance and subsidized housing. The SPM, as it's called, also takes into account the cost of living in the locale in which a household resides.

Because California is one of the most expensive states in which to live, there are nearly 2 million households with annual incomes that rise above the government's official poverty threshold, but nonetheless are poor, in real terms, after factoring in their housing, transportation, food and other living expenses.

California poverty advocates suggest that the best way to reduce the ranks of the state's poor (official and nonofficial alike) is to increase their household incomes by raising the government-mandated minimum wage.

To wit, the state minimum wage increased in July from $8 an hour to $9.

It will increase to $10 an hour in January 2016.

Several cities around the state intend to go further still.

In September, the Los Angeles City Council voted to mandate a $15.37 an hour minimum wage for the city's hotel workers. And on Nov. 4, San Francisco voters will decide the outcome of a ballot measure that would raise the city's minimum wage from $10.74 to $15 by July 2018.

Such wrongheaded public policy explains why California has so much joblessness and, hand-in-hand with that, so much poverty.

Indeed, higher minimum wages in L.A., San Francisco and other California cities almost certainly will motivate employers to shed lower-skilled workers who are employable at the current minimum wage, but who will no longer be worth employing at higher government-mandated wage rates.

So the ranks of the working poor will shrink. And the number of jobless poor will swell.




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Roger Simon
Roger SimonUpdated 22 Oct 2014
Ben Shapiro
Ben ShapiroUpdated 22 Oct 2014
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