California is the third-richest state in the union, according to U.S. News & World Report, but it has the highest poverty rate, as well. Mark Perry, a scholar at the American Enterprise Institute, recently ranked states by their poverty rate. The U.S. government’s official poverty measure ranks California 16th for poverty, with Louisiana and Mississippi having the highest rates. But by using a supplemental poverty measure that accounts for housing prices and noncash benefits along with income, Perry found California ranked first.
California’s increased poverty rate is largely due to the high cost of living in the state, driven by housing and taxes, Perry wrote. In a Los Angeles Times opinion column, Kerry Jackson, Pacific Research Institute’s fellow in California studies, asked why the liberal state was the “poverty capital of America.” He pointed out that state lawmakers have provided massive entitlements to the needy, and “in some cases, individuals with incomes 200 percent above the poverty line receive benefits.”
But the state largely bypassed the welfare reforms other states implemented a few decades ago. Instead of tying work requirements to welfare benefits, the state continued handouts with no expectations. Now, “to keep growing its budget … a welfare bureaucracy has an incentive to expand its ‘customer’ base,” Jackson wrote. —C.C.