Working Californians Devastated by Loss of Safety Net Programs

California’s poverty rate climbed in the first quarter of 2023, the latest quarter measured by the Public Policy Institute of California.

Poverty increased from 11.7% in 2021 to 13.2%, the institute said, with 5 million people living in poverty.

Safety net programs played a major role in recent shifts in the state’s poverty rate.

During the pandemic, the federal government expanded social safety net programs such as tax credits for families with children and emergency food assistance, lowering poverty rates nationwide. Poverty rates jumped when those expansions expired late last year and earlier this year, said Caroline Danielson, a researcher at the institute.

“We’re seeing an uptick in poverty. That’s not because the economy is worse — it’s actually improving — but it’s because we temporarily, using federal funds mainly, had expansions of safety net programs,” she said.

About 3.2 million more Californians would be in poverty without any safety net programs, Danielson said. Expanded CalFresh food assistance alone kept 1.1 million people out of poverty in the first quarter of 2023, when that expansion expired, the report said.
Latinos make up about half of Californians living in poverty, despite being 39.7% of the population. By comparison, about 10% of white Californians live in poverty.

For example, researchers found that social safety net programs reduced poverty the most in inland areas, where poverty rates are lower. Without the programs, poverty would be 14.4 points higher in the Central Valley and Sierra region but only 4.3 points higher in the Bay Area, the report shows.

The Public Policy Institute looked closer at working Californians and found that most Californians in poverty are working, and even full-time employment didn’t keep some residents from poverty.

Over 8 in 10 of California’s 1.3 million working poor were employed year-round; nearly half worked full-time and 37% part-time. Part-time workers had higher poverty rates than full-time workers.

Workers in service industries — janitors, landscapers, cosmetologists, housekeepers and other service jobs — and workers in agriculture tended to experience poverty at higher rates than other labor sectors. For example, people in building and grounds maintenance have a 20% poverty rate, followed by workers in food preparation and service who endure a 16% poverty rate.

The report also highlights how the working poor spend their money. They cohabit with family members to make ends meet; 82% of impoverished Californians live with other adult family members.

People use most of their earnings for everyday expenses and bills. On average, working poor adults make $28,000 annually.

Danielson said this underscores the need for policies that increase wages and improve training and educational opportunities for the working poor.