California: We’re #1… in Poverty

On the same day as Apple unveiled the expensive iPhone in Apple’s history, Southern California Public Radio released a sobering analysis.

New figures from the U.S. Census Bureau show California has the country’s highest poverty rate, with nearly one in five residents facing economic hardship when factoring in living costs such as housing.

Most of the time we talk about poverty in terms of how much money people are making. But the Census Bureau also has a “Supplemental Poverty Measure” that does a better job at getting at how poor people really are by factoring in the cost of housing, taxes, and medical care. And by this more realistic standard, California is doing worse than Mississippi.

The main culprit: the astronomical cost of housing in California.

The California Budget and Policy Center blamed high rents for keeping 20.4 percent of the population in poverty. Sara Kimberlin, a senior policy analyst at the center, said fair market rent for a two-bedroom apartment in the most populated parts of the state is more than $1,500 a month. But the state minimum wage pays $546 a month, meaning that a single mother earning that income, for example, wouldn’t be able to find an affordable place for herself and her children.

What’s particularly shocking about this turn of events is that California housing prices used to be quite reasonable. When I was in grad school in the mid-80s to early 90s, rent in Berkeley, Oakland, and San Francisco was remarkably cheap. If you work willing to share a house with a few roommates, you could have a remarkably comfortable middle-class life on not a whole lot of money. But when Silicon Valley took off, a combination of an explosion of new wealth, not enough housing being built to keep up with a partly tech-driven increase in population, and outdated housing policies pushed housing prices so high that now almost no one can afford it. It’s a very sad state of affairs, and it’s not at all clear how they can get out from under.

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