California May Have the Nation's Highest Poverty Rate

November 04, 2009 | The Sacramento Bee |  Link to article

California has long had one of the nation's higher poverty rates, as calculated by the federal government for decades on a formula tied to food prices. But it may actually be the highest in the nation under one proposed new way of calculating it.

The National Academy of Sciences has recommended a new methodology for calculating poverty in the 1990s, using costs of housing and other factors in addition to food. It has gained impetus because President Barack Obama, as a White House candidate, advocated a change in formula.

A Washington-based advocacy group called the Center for Law and Social Policy has applied the proposed NAS formula to the states and then added another factor: differential housing costs.

The result is that California's poverty rate, 34th highest under the current formula, drops to 32nd under the NAS methodology but soars to 50th when housing costs are included in the calculation.

"This report provides a hint of how poverty rates might change if a more comprehensive poverty measure was implemented," The author of the CLASP report, Dorothy Smith said in a statement as results were released today. "While a new poverty measure itself won't change the circumstances of Americans, it will better help policymakers and advocates understand the full dimensions of poverty at the national, state and local levels, and it can help inform policy decisions on how to tackle poverty."

The results for California - relatively little change under the NAS proposal but much change with housing costs - were mirrored in many other states with high housing costs. New Jersey, for instance, had the second lowest poverty rates by the first two measures but jumped to 31st with the housing cost adjustment. New York wound up with a poverty rate second only to California's.

At the other end of the scale, New Hampshire has the nation's lowest rate of poverty by any measure. The different methods are explained here while the state-by-state comparisons can be found here.

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