Incomes Rise for Bay Area's Middle Class, But Not Its Poor

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Middle-class Bay Area residents saw their incomes rise between 2014 and 2015. But when it comes to poverty, the region showed less progress, according to U.S. Census Bureau figures released Thursday.

While the median income for households in the nine-county Bay Area averaged about $85,600 -- a 3 percent increase from 2014 -- the number of residents living in poverty essentially stagnated at just over 10 percent during that year.

"Poverty is a large issue in the Bay Area that is often overshadowed by the fact that the economy in general is doing so well," said economist Jon Haveman, co-author of a 2015 poverty report by Joint Venture Silicon Valley.

"Simply because median incomes are increasing that doesn’t mean that we are making a great deal of progress in terms of poverty," he said.

In the aftermath of the Great Recession, the number of people living in poverty in the Bay Area rose from 9 percent in 2007 to 11.7 percent in 2011, but then began a downward trend, according to an analysis by Stanford's Center on Poverty and Inequality.

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The Bay Area's poverty rate is much lower than that of the state and nation, estimated at 15.3 and 14.7 percent respectively, according to the Census Bureau's American Community Survey.

Steady improvements in the region's median income and poverty rate are good news that show "we are moving in the right direction," said Sara Kimberlin, a postdoctoral scholar at that center.

"But it's also important to keep in mind that there's a lot of people who have been left behind by the booming economy of the Bay Area," she said.

Housing Costs 'Drive' Poverty in Bay Area

The census statistics don't take into account the high cost of living in the Bay Area. Kimberlin estimates that when housing expenses are factored in, the number of residents in the region living in poverty increases to about one in six.

That's more than 1.2 million people, said Kimberlin.

"It's high housing costs that really drive the poverty rate in the Bay Area," said Kimberlin. "So, to the extent that policies can bring those housing costs down, that would be helpful in reducing poverty in the Bay Area specifically."

Danovis Pooler, a boxing trainer in Oakland, agrees. He doesn't believe the economy has visibly improved yet for lower- and even middle-income people.

"The cost of living is higher here, and there's so many people suffering from  it," said Pooler, a U.S. Army veteran who rents a town home in Gilroy in Santa Clara County. He said rent eats up a big chunk of his family's earnings.

According to the latest census figures, the proportion of people living in poverty in the region varied greatly from county to county. The highest poverty rate was in San Francisco (12.3 percent), while Marin had the lowest (7.1 percent).