Poverty in Unexpected Places

CAFCA | November 15, 2016 |

Grinding poverty in the United States has long been synonymous with the Deep South, where low wages, poor health and diminished opportunity are more pervasive than in other parts of the country.

But there are other ways to think about poverty that yield a strikingly different pattern. According to Census data that take into account the costs of living in each state and the role of federal aid in coping with those costs, California has the highest poverty rate in the nation, at 20.6 percent of the population, compared with 17.9 percent for Louisiana, 17 percent for Mississippi and 16.8 percent for Georgia. Over all, the West, with an alternative poverty rate of 15.7 percent, is virtually tied with the South, at 15.4 percent.

That does not mean poverty in California and the West is as grim as in Mississippi and the South. Southern poverty is associated with greater material hardships than are experienced elsewhere, including hunger. (The West includes the 13 westernmost states; the South is a group of 16 states that includes Kentucky, West Virginia, Maryland and Delaware, plus Washington, D.C.)

The high alternative poverty rate in the West is driven largely by rising rents in California, where industries like technology, finance and entertainment have attracted well-paid workers who bid up housing costs. As rent increases have steadily outpaced wage growth in the last several years, housing costs as a share of total family income have swelled to more than 50 percent for nearly 30 percent of Californians, according to an analysis of Census data by the Stanford Center on Poverty and Inequality. The results are overcrowding, bad housing, the inability to afford other essentials, frequent evictions and other features of poverty.

Similar dynamics are at work elsewhere, notably in Hawaii, New York and Washington, D.C. In effect, high and rising incomes at the top of the economic ladder are impoverishing those with modest pay who are clinging to the lower rungs.

At the federal level, about five million low-income households receive rental assistance through voucher programs and public housing, without which 2.6 million more people would be living in poverty. Still, only one in four eligible households receives federal rental aid. Worse, the number of families with children receiving federal rent subsidies has fallen in recent years and is now at its lowest point in more than a decade, despite rising need. Misguided federal budget cuts are to blame, as is Congress’s failure to see poverty in all its dimensions as of bedrock importance.

The market is not going to cure itself of widening income inequality and the poverty it helps create. Bolstering federal rental subsidies, especially for families with children, is one good place to start.