Progressive Policies Drive More into Poverty

Joel Kotkin, OC Register, August 9, 2015

Across the nation, progressives increasingly look at California as a model state. {snip}

And to be sure, the state has finally recovered the jobs lost in the 2007-09 recession, largely a result of a boom in values of stocks and high- end real estate. Things, however, have not been so rosy in key blue-collar fields, such as construction, which is still more than 200,000 jobs below prerecession levels, or manufacturing, where the state has lost over one-third of its employment since 2000. Homelessness, which one would think should be in decline during a strong economy, is on the rise in Orange County and even more so in Los Angeles.

The dirty secret here is that a large proportion of Californians, roughly one-third, or some 3.2 million households, as found by a recent United Way study, find it increasingly difficult to keep their heads above water. The United Way study, surprisingly, has drawn relatively little interest from a media that usually enjoys highlighting disparities, particularly racial gaps. Perhaps this reflects a need to maintain an illusion of blue state success. {snip}

State of Poverty

The United Way study–“Struggling to Get By”–delves well beyond even the recent Census Bureau analysis, which, by factoring in housing costs, already established California as the state with the highest percentage of poor people, at roughly one in four. United Way expanded this percentage by calculating what the charitable organization called the “Real Cost Budget,” which includes not only rent but also costs for child care, medical, health and transportation.

By United Way’s calculation, roughly one in three Californians can barely make ends meet, despite the state’s relatively generous transfer payments, subsidies and general assistance. Latinos and African Americans, as one might expect, fare worse, but roughly one-in-five non-Hispanic whites and 28 percent of Asians also are deemed struggling.

Roughly half of Latino households fall into this condition of poverty or near-poverty, as do a similar share of African American households. Those who do worst generally are poorly educated single mothers and their children. Poverty and near-poverty are greatest among Latinos, who also are bearing the majority of children. It is hard to imagine a more urgent wake-up call.

Not surprisingly, many of the foreign-born, the source of much of California’s population growth in recent decades, have fared poorly. Only 25 percent of households headed by native-born Californians fall below the United Way “Real Cost Budget” line for economic distress, but it’s 45 percent for those headed by the foreign-born, and nearly 60 percent for families headed by a noncitizen. The highest percentage is among Latino households headed by a noncitizen–a staggering 80 percent fall below the minimal level.

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Given the avowed commitment of progressives to addressing inequality and poverty, one would expect that there would be a renewed focus on spurring economic growth. But, instead, in part due to the bizarre policy choices made by many Latino legislators, the state keeps ratcheting up the prices for both energy and housing through its quixotic–and, fundamentally, narcissistic–attempt to single-handedly reverse climate change.

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In order to placate the rising numbers of poor and near-poor, California’s climate-obsessed political elites are offering expanded subsidies for housing. Some $130 million from cap-and-trade funds–the very mechanism helping to drive higher energy costs–will go for affordable housing. Yet this is the most full-bore tokenism imaginable. At a cost per afforable apartment unit of about $300,000, at best only a few thousand Californians will benefit, making it essentially irrelevant in a state of almost 39 million people.

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