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September 14, 2011
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California's poverty rate highest in more than a decade
By Phillip Reese
[email protected]
California's poor now outnumber the populations of 33 states and 90 nations – and counting.
The state's poverty rate last year rose to its highest level in more than a decade – 16.3 percent – as household incomes plunged by 5 percent, according to census figures released Tuesday.
The state lost ground much faster than the rest of the nation, which saw a roughly 2 percent decline in household income.
Nationally, about 15.1 percent of the population, or 46 million people, were poor last year, a higher poverty rate than in any year since 1993.
That incomes continue to decline and poverty increases didn't surprise economists. But the magnitude of the changes did. California hasn't seen a bigger year-to-year fall in household income in at least 25 years.
"We're supposedly in recovery," said Jeff Michael, an economist at the University of the Pacific in Stockton. "But we've been feeding at the bottom of the trough."
Howard Roth, the state's chief economist, noted that many of the states hit hardest by the housing bust saw the steepest income declines and largest poverty increases last year. Those states will likely continue to suffer, he said, until the housing industry recovers.
"It's pretty clear that going forward, these income numbers are going to get smaller for a while," Roth said.
In California, the median household income – the middle number in a ranked list of incomes – was $54,459 last year, down from an inflation-adjusted $57,061 in 2009 and the lowest level since 1997. California incomes peaked in 2006 at $59,821.
Nationwide, the median household income stood at $49,445 last year, down from $50,599 in 2009.
About 6.1 million Californians lived in poverty last year, an increase of nearly a half-million residents from the previous year and the highest rate since 1997.
To fall below the federal poverty line, a family of four earns $22,314 or less; a single person, $11,139.
A California worker with a full-time, year-round, minimum-wage job will easily make more than $11,139 a year. The problem, though, is that finding and keeping even a minimum-wage job in California is tough.
From July 2009 to July 2010, the state saw a net loss of about 170,000 jobs, or about 500 jobs a day, state figures show. The heaviest private-sector job losses have been in construction and manufacturing.
Since then, job losses have slowed, but not stopped.
Sacramento resident Kevin Ferrari, 20, recently saw his income fall sharply after losing his job at a gas station. Ferrari was a student at California State University, Sacramento, but dropped out largely because, he said, the bills were too steep.
In the last few months, Ferrari has applied for more than 100 jobs, to no avail.
"I believe I'm stuck," he said. "I'm really trying, and I'm not getting anywhere."
Ferrari recalled an open job interview at a McDonald's restaurant at the start of the recession. One of his fellow applicants said he had a master's degree in psychology.
"Businesses are afraid to spend and afraid to hire," Ferrari said.
Besides health care and high technology, the job market offers little refuge for Californians.
The once-stable government sector, for instance, is now driving income losses. A separate report Tuesday from the U.S. Bureau of Economic Analysis found that the Sacramento region's private-sector gross domestic product – the sum worth of everything produced by private industry – increased last year, but not enough to negate the region's GDP losses in the public sector.
Former kindergarten teacher Tammy Fraser can relate: She's been laid off twice from different El Dorado County school districts since the recession began.
"The budget cuts – the only place for districts to recoup their losses was through salaries," said Fraser, who now works in the private sector.
Fraser said the school districts she used to work for have sharply increased kindergarten class sizes so they can pay fewer teachers.
Michael, the University of the Pacific economist, and Roth, the state economist, said California incomes will likely continue to fall through 2011, as more jobs disappear. But they both said this year's declines will likely not be as steep.
"In 2011, we will see it flatten," Michael said, but added that "most of the growth in income has been at the very high end."
The census report released Tuesday is based on a survey of roughly 54,000 Americans. Among its other findings:
• About 22 percent of American children – or more than one in five – live in poverty.
• Incomes for blacks and Hispanics nationwide decreased faster than incomes for whites and Asians. Black households typically earned about 60 cents for every dollar earned in white households last year.
• About 5.9 million young adults between ages 25 and 34 lived with their parents last year, up by 1.2 million from before the recession.
Read more:
http://www.sacbee.com/2011/09/14/3908488/californias-poverty-rate-highest.html#ixzz1XwUab782
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