News & Updates - Cost-of-Living Crisis Continues to Drive Up California’s Poverty Rate

SACRAMENTO—According to data published by the U.S. Census Bureau today, California continues to have the worst poverty rate among all states when adjusted to account for government programs designed to help low-income families and necessary expenses for critical goods and services.

“More people live in poverty in California than in any other state because of our high and rising costs of living. More than 16 percent of Americans living in poverty live in California, despite being home to just 12 percent of the population,” said Rob Lapsley, president of the California Business Roundtable. “Driven by our housing and overall cost-of-living crisis, more Californians struggling to make ends meet are falling into poverty.”

California’s cost-adjusted poverty rate (2018-2020 average) was 15.4 percent, while 16.5 percent of all Americans living in poverty live in California. Rates among the other states ranged from 5.9 percent in Minnesota to 14.5 percent in Mississippi (16.5 percent in DC), with the US average at 11.2 percent and the average among all states other than California at 10.6 percent. For the first time, California residents paid more for electricity in March 2021 than the average for all other states in the nation. They also continue to pay the highest gas taxes and prices in the country and for the ongoing housing crisis through increased housing costs. As tracked by the Center for Jobs and the Economy’s Affordability Index, nearly all necessity costs for the average California family continue to increase.

“Unfortunately, it is likely that our poverty crisis will continue to get worse,” Mr. Lapsley continued. “We are seeing a significant increase in inflation, which will drive costs up even higher. At the same time, a series of new and expensive energy mandates are being implemented, which will drive up the cost on home electricity, gasoline, goods and services, and housing. And let’s not forget the more than $200 billion in new and higher taxes introduced by the California Legislature in 2021 alone. Without prioritizing focus on affordability and honest discussion of the price Californians are paying for new and expensive regulations, fees and mandates, we will never address the growing poverty crisis in our state.”

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