Caroline Danielson

PPIC has been measuring poverty in California since we first opened our doors in 1994. We knew that to make effective and efficient policy, decisionmakers needed a reliable baseline of economic well-being across the state. With experience, we realized that our initial measures of poverty—which couldn’t account for state specifics—could be improved. Over a decade ago—and following the lead of the US Census—we substantially revised how we measure poverty to more accurately capture basic needs in our high-cost state.

The result was the California Poverty Measure (CPM), a collaboration between PPIC and the Stanford Center on Poverty and Inequality. Unlike the official poverty metric, the CPM factors in benefits from large-scale cash, food, and housing safety net programs, low-income tax credits, and county-level differences in the state’s high cost of living. Two key takeaways from that effort? First, poverty in California is much higher than official poverty statistics would lead us to believe. In 2011, the CPM shows poverty to have been 21.7%, while the state’s official poverty rate was 5 percentage points lower. Second, the state has seen substantial improvements over the long term.

The latter finding is a surprise to many, given California’s dramatic boom and bust economic cycles over the last 30 years. During recessions, we see upticks in poverty that take years to dissipate—even though most poor families have at least one worker. Yet since the early 1990s, when at least one in four Californians lived in poverty, from 2015 onward fewer than one in five have been living in poverty.

Not only has poverty declined over time, differences in poverty across demographic groups have narrowed (although some gaps remain substantial). For example, child poverty is typically higher than poverty among adults, but between 2011 and 2019, the gap shrank from 4 percentage points to 2 percentage points. Likewise, the difference in poverty between Latino Californians and white Californians fell from 17 points to 9 points, and the gap between the highest poverty region (Los Angeles County) and the lowest poverty region (the Sacramento area) narrowed from 10 points to 6 points.

figure - Poverty in California has improved over the long-term

During the pandemic years something unusual happened. Poverty typically rises when the economy turns down, but the COVID-19 recession was an exception: in spite of severe economic disruptions, poverty declined dramatically because of major government interventions, particularly for children. While the official poverty rate—which does not count tax credits and food assistance—rose, CPM poverty declined from 16.4% in 2019 to 11.7% in fall 2021. We estimate that regular and expanded safety net benefits cut poverty nearly in half (88%) in fall 2021 and by more than 60% in early 2023.

figure - During the pandemic, the safety net’s role in mitigating poverty doubled

This experience underscores the importance of policy in addressing poverty. However, our work with the CPM has also underscored the complexity of the poverty equation: work, the safety net, and the cost of living all factor in.

Over the years that we have been producing the CPM, we have examined a wide range of topics, not only providing yearly updates on poverty in the state but also exploring

In the coming years we will continue to track poverty and assess policies that bolster work, affect the safety net, and address housing costs—aiming to increase understanding and spur action to improve outcomes and opportunities for Californians across the state.