Economy & Budget

Is California poorer than Mississippi?

Is California poorer than Mississippi?

SACRAMENTO — Driving through the Mississippi delta from Tunica-area casinos to Jackson a few months ago, I saw few signs of the grinding poverty that was ubiquitous during my first visit there in the ‘80s. The shacks and “sugar ditch” — an infamous open sewer that highlighted the area’s plight — were gone, but the Magnolia State still looks poor by California standards.

Yet California’s real poverty rate is a nation’s-worst 22 percent, according to a new report by researchers at the Public Policy Institute of California and the Stanford Center on Poverty and Inequality. Can this be true?

That’s not where the counterintuitive conclusions end. Many inland California cities are well-known bastions of joblessness and despair. But the use of a new California Poverty Measure (CPM) rather than traditional Census standards concludes the poorest spots are in California’s coastal metropolises.

Because CPM adjusts for cost-of-living factors, it leads to some strange outcomes. By most accounts, Imperial County is Ground Zero for high poverty. The report argues that Imperial County’s poverty rate of 22.1 percent is lower than San Diego County’s rate of 22.7 percent. That’s shocking, even with a high margin of error.

Likewise, the CPM suggests that Los Angeles County is the state’s poorest, and that San Bernardino County, the not-so-tony area that sprawls from Fontana to Needles, has a far lower poverty rate than glitzy Orange County.

We’ve all seen dubious research over the years touting, say, rates of hunger that put the United States on par with Zimbabwe. By contrast, the research here seems serious, and echoes a new alternate measure used by the Census Bureau. It does raise more questions than it answers.

Obviously, it costs far more to live in San Francisco or La Jolla than Clarksdale or Vicksburg, so it makes some sense to factor in cost of living. The CPM also looks at the amount of government assistance families receive and at expenses such as commuting costs.

Maybe the formula has gotten so complex that it no longer is measuring poverty, but is emphasizing what any reasonable person already knows: It’s painfully expensive for anyone to live in California’s coastal metropolises.

The study also seems to have a political agenda that promotes more social spending. “The CPM illuminates the important role of the social safety net — specifically, CalFresh, CalWORKS, the Earned Income Tax Credit (EITC), and other means-tested programs — in moderating poverty,” according to its summary. A Los Angeles Times article argues that the study “could add pressure” for increased aid from the feds.

One could just as easily argue that the high tax rates needed to sustain more social spending mean lower overall incomes. California’s high tax rates also are a disincentive for job creation, according to California’s main business groups.

Everyone — Right and Left — agrees that a growing economy with good-paying jobs is the best antidote to poverty. Broad agreement probably ends there. For instance, California’s high poverty rates are most pronounced in areas with high populations of unauthorized immigrants. In response to the findings, some liberal commentators have called for expanded services for them, while conservatives have called for tighter immigration rules.

Immigration strikes me as a diversion from the bigger issue. If poverty rates are exacerbated by a high cost of living, as the study suggests, then policy makers should — first and foremost — target policies that unnecessarily drive up prices. Inordinately high impact fees and land-use restrictions reduce the supply of housing and ratchet up their prices. And the study pinpoints housing costs as the main culprit in urban poverty.

Despite the study’s alarmist numbers, we know that San Diego is not Clarksdale, Miss. It’s not Brawley or El Centro, either. But the CPM does spotlight a problem that’s a touchstone for many of California’s most significant debates.

The new poverty numbers provide fodder for those who call for more anti-poverty aid, but they also bolster those who argue that the government is a barrier to home building and job creation. And those will always be the foundations of a middle-class life.

Steven Greenhut is the California columnist for U-T San Diego. Write to him at steven.greenhut@utsandiego.com.

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