California’s Poverty Problem

It continues to get worse, and as Victor Davis Hanson noted, it’s a tale of (at least) two states:

For decades, California’s housing costs have been racing ahead of incomes, as counties and local governments have imposed restrictive land-use regulations that drove up the price of land and dwellings. This has been documented by both Dartmouth economist William A Fischel and the state Legislative Analyst’s Office.

Middle income households have been forced to accept lower standards of living while less fortunate have been driven into poverty by the high cost of housing. Housing costs have risen in some markets compared to others that the federal government now publishes alternative poverty estimates (the Supplemental Poverty Measure), because the official poverty measure used for decades does not capture the resulting differentials. The latest figures, for 2013, show California’s housing cost adjusted poverty rate to be 23.4 percent, nearly half again as high as the national average of 15.9 percent.

Back in the years when the nation had a “California Dream,” it would have been inconceivable for things to have gotten so bad — particularly amidst what is widely hailed as a spectacular recovery. The 2013 data shows California to have the worst housing cost adjusted poverty rate among the 50 states and the District of Columbia. But it gets worse. California’s poverty rate is now more than 50 percent higher than Mississippi, which long has set the standard for extreme poverty in the United States (Figure 1).

Those kinds of regulations are a luxury good, that the elites who impose them can afford. The poor get subsidized or, in much of the state, the regulations aren’t enforced on them, particularly if they’re undocumented. But the middle class gets hammered.

But as Glenn notes re the reference to Missiippi: “that was before Mississippi was taken over by Republicans, and California was taken over by Democrats.”

2 thoughts on “California’s Poverty Problem”

  1. Typically when government says, “Out biggest problem is XYZ!”, then the solution is going to make XYZ even worse.

  2. Of course, the poverty rate is almost completely a function of more than 10 million immigrants, a large percentage illegal.
    OTOH, the food service and gardening costs are superb.

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