A new report shows California has the highest poverty rate in the US, alongside Louisiana, and rates have shown little improvement.
Despite the abundant wealth in the state – more billionaires live in California than anywhere else in the US – in 2024 about 7 million people, or 17.7% of residents, could not afford to cover their basic needs. In 2021, California’s poverty rate reached a historic low of 11%, but as pandemic-era policies came to an end, rates surged in the state and across the US, according to the report from the California Budget and Policy Center released last week.
The research and analysis non-profit found that poverty rates in California remained “statistically unchanged” from 2023 levels, and that people of color, renters and children were among the most affected. Child poverty in the state has more than doubled since 2021.
“These figures reflect a troubling trend that began with the rollback of historic anti-poverty investments that were created to mitigate the harm of the Covid-19 pandemic – underscoring that poverty is a policy choice,” the report states, adding that policies such as the federal child tax credit were associated with a historic decline in poverty.
“When Congress allowed these effective policies to expire, they immediately reversed progress, causing the largest increase in the national poverty rate in 50 years, and a significant spike in California’s poverty rate.”
California made significant investments during the pandemic and enacted temporary economic protections for residents, including providing motel rooms to unhoused people, an eviction moratorium and rental assistance. But poverty in the state rose as those programs came to an end.
Now cuts at the federal and state levels are likely to cause poverty rates to rise further, the report states. The authors point to Donald Trump’s federal budget, signed into law earlier this year, which will cut healthcare, food assistance and other support for millions of people, as well as a state budget that includes “significant reductions” in healthcare. Experts have warned Trump’s budget will have a major impact on the country’s social safety net, and described it as the “harshest bill we’ve ever seen since budget deficits became an issue 40 years ago”.
The report calls for “bold action” from state leaders, including implementing a graduated corporate tax rate and ending some corporate tax breaks, among other recommendations.
“For California to be a state for all to thrive – regardless of race or ethnicity, gender, and other identities – state leaders should take bold action to mitigate the rise in poverty and present a different vision for California than the one the federal government has put forth in recent months,” the report stated.
