State’s Poverty Profile Changes

Despite a booming economy in the late 1990s, California’s child poverty rates remain stubbornly high, even though the state’s poor youngsters are more likely to live in a family with a working parent than those in the United States as a whole.

These are some of the findings in a study on California’s child poverty being released today showing that the state’s changing demographics are defying conventional definitions of who is poor.

Welfare reform advocates have long touted work and marriage as a way for low-income families to escape poverty. But in California, many poor immigrants are already doing just that.

In contrast to the rest of the nation, where most poor children live in a household headed by a single parent, nearly half of California’s poor kids live in a two-parent household, according to research by the New York-based National Center for Children in Poverty, which is affiliated with Columbia University’s School of Public Health. The center found that most poor youngsters in California are the offspring of at least one immigrant parent, and that poor immigrant families are more likely to include a breadwinner than are U.S.-born families in poverty.

“The stereotype of the typical low-income kid is really being challenged by what is happening in California,” said researcher Julian Palmer, lead author of the study. “You might think the typical poor kid lives with a single mother on welfare. In fact, in California they are just as likely to be living with both parents and much more likely to be living in a working family than not.”

Poverty experts said the study underscores growing income inequality in California, where even unprecedented job and wealth creation in the late 1990s failed to close the state’s poverty gap with the rest of the nation. With the economy now moving at a crawl and unemployment hitting a five-year high earlier this year, some worry that the chasm will widen.

“The fact that a very strong economy didn’t move the gauge of child poverty as much as we might have hoped is disturbing,” said Amy Dominguez-Arms, vice president of Oakland-based Children Now, a child research and advocacy organization. With the economy struggling, “we would anticipate that child poverty is going to be on the upswing.”

In 2000, the height of the state’s economic boom, 18.6%, or 2.1 million, of California children were poor, compared with 15.8% nationwide, according to the National Center for Children in Poverty’s analysis of U.S. Census Bureau data. One in six poor children in the U.S. now lives in California, compared with one in 10 two decades ago. The poverty threshold was $17,524 annually for a family of four in 2000.

The center’s study dovetails with other research showing that California’s poverty rate, once lower than the national average, caught up with the rest of the nation in the 1980s, surpassed it in the 1990s and has remained consistently higher than the U.S. average ever since.

Poverty rates ebb and flow along with the business cycle. For example, California’s overall poverty rate has declined substantially from its peak of 18% during the recession of the early 1990s, according to a study released last year by the Public Policy Institute of California.

Nevertheless, even the red-hot economy of the late 1990s couldn’t make a dent in the long-term trend. Over the last three decades, California has seen its overall poverty rate grow by 3.8 percentage points to 12.9% in 2000 from 9.1% in 1969, according to a research report last year by the Public Policy Institute. That stands in stark contrast to the rest of the nation, as the U.S. poverty rate fell to 11% from 12.5% over the same period.

Experts point to a variety of factors behind California’s elevated poverty rates. For starters, California got slammed harder by the early 1990s recession than the rest of the nation, hit by the collapsing defense and housing sectors. Parts of the state are still recovering. Los Angeles County, for example, has fewer nonfarm payroll jobs today than it did in 1990.

“The early ‘90s was a real turning point,” said Deborah Reed, program director for the Public Policy Institute of California. “Poverty grew much faster in California than the rest of the nation. And although it fell in the late ‘90s, it has never gotten back” to equal the U.S. level.

Another major factor is immigration. California has become a magnet for unskilled, mostly Latino immigrants who have found low-wage employment in the state’s restaurants, fields and factories. Foreign-born Latinos have the highest poverty rate of any ethnic group in California at almost 27%, according to the Public Policy Institute of California.

That, in turn, has had a dramatic effect on the poverty rate of California’s children, given that Latinos make up the largest segment of state residents under age 18. According to the National Center for Children in Poverty report, which compared data from 1996 to 2000 with an earlier five-year period, Latinos account for 61% of all poor children in California, up from 41% in the period from 1979 to 1983. Nearly three-fifths of poor children in California are the offspring of at least one immigrant parent.

With Latinos representing the future of the state’s work force, child-poverty experts say these figures present a challenge for policymakers that could have big implications for the California economy down the road. Though experts have promoted an intact family structure and employment as a bulwark against poverty, the National Center for Children in Poverty study shows the model isn’t working for many families in California. Two-thirds of poor children in California have at least one working parent, slightly higher than the rate nationwide, while 48% of poor kids in California live in a two-parent family, compared with about one-third nationally.

“They are playing by the rules, staying together and working,” said the center’s Palmer. “The big challenge is to figure out how these families can earn a decent living to get their kids out of poverty.”

Single-parent families are still more likely to be poor than two-parent families, both in California and nationwide. Still, Palmer said California’s changing demographics will require policymakers increasingly to focus on the needs of working, immigrant, two-parent families if they hope to reverse the state’s rising tide of poverty. Recommendations include implementing a state earned-income tax credit similar to the federal program that supplements the earnings of low-income workers, indexing the minimum wage to inflation, providing more child-care subsidies and upgrading the skills of low-wage workers, among others.

California has made some strides with programs such as Healthy Families, a government-funded health-care program that covers children whose families earn too much to qualify for Medi-Cal but not enough to pay for private health insurance. However, the state’s budget woes will make it tough to roll out initiatives to assist the children of the working poor.

“It’s a big problem that requires a big solution,” said Steven Maviglio, spokesman for Gov. Gray Davis. “We are taking the right steps, but it’s a difficult thing to chip away at when you have a large population ... and a lot of immigration.”