. . . US states (are) ranked for two different measures of poverty: a) the official measure of poverty and b) the Census Bureau’s recently introduced (2011) Supplemental Poverty Measure(SPM), which accounts for each state’s cost-of-living, housing costs, utilities, medical costs and taxes. It also considers non-cash government assistance as a form of income and is therefore considered a more accurate measure of poverty than the official rate. For the country as a whole, the percent of Americans in poverty using the SPM of 14.7% for the years 2014-2016 (averaged) is one percentage point higher than the percent of Americans in poverty (13.7%) using the official poverty measure.
On an individual state basis, the biggest changes in a state’s poverty rate between the two measures in each direction are: a) California’s official poverty rate of 14.5% ranked it No. 16 but the state moved up to No. 1 at 20.4% (highest state poverty rate in the US) using the SPM ( a difference of +5.9%) and b) Mississippi’s poverty rate ranked it No. 1 at 20.8% using the official measure but No. 5 at 16.9% using the SPM (a difference of -3.9%). Overall, 18 states, including California showed a greater percentage of people in poverty using the SPM, 30 states, including Mississippi, showed a lower percentage of people in poverty and two states showed no change (North Dakota and Utah).
Obviously, the reason for the increase in California’s (and 17 other states) poverty rate using the SPM is because of the state’s high cost-of-living including sky-high housing costs (median home price of $519,100) and because of high taxes and energy costs. And the decrease in Mississippi’s SPM poverty rate (and 29 other states) is because of that state’s low cost-of-living, including low housing costs (median home price of $114,400).
A recent LA Times op-ed by Kerry Jackson, Pacific Research Institute fellow in California studies, uses the SPM measure of poverty to answer the question “Why is liberal California the poverty capital of America?”
. . . Kerry Jackson identifies several specific factors that collectively contribute to making California the “poverty capital of America.”
Related: As I reported several weeks ago on CD, California ranked last year as America’s No. 4 Outbound State based on household moves (60% outbound vs. 40% inbound) according to North American Van Lines’ 2017 US Migration Report. It was also noteworthy that 2017 was the first year that California ever ranked in the Top Five outbound US states and that out-migration might be partly explained by the Golden State’s new status as the “poverty capital of America.”
