Why is liberal California the poverty capital of America?


By KERRY JACKSON
JAN 14, 2018 | 4:00 AM LA TIMES

Guess which state has the highest poverty rate in the country? Not Mississippi, New Mexico, or West Virginia, but California, where nearly one out of five residents is poor. That's according to the Census Bureau's Supplemental Poverty Measure, which factors in the cost of housing, food, utilities and clothing, and which includes noncash government assistance as a form of income.

Given robust job growth and the prosperity generated by several industries, it's worth asking why California has fallen behind, especially when the state's per-capita GDP increased approximately twice as much as the U.S. average over the five years ending in 2016 (12.5%, compared with 6.27%).

It's not as though California policymakers have neglected to wage war on poverty. Sacramento and local governments have spent massive amounts in the cause. Several state and municipal benefit programs overlap with one another; in some cases, individuals with incomes 200% above the poverty line receive benefits. California state and local governments spent nearly $958 billion from 1992 through 2015 on public welfare programs, including cash-assistance payments, vendor payments and "other public welfare," according to the Census Bureau. California, with 12% of the American population, is home today to about one in three of the nation's welfare recipients.

The generous spending, then, has not only failed to decrease poverty; it actually seems to have made it worse.

In the late 1980s and early 1990s, some states — principally Wisconsin, Michigan, and Virginia — initiated welfare reform, as did the federal government under President Clinton and a Republican Congress. Tied together by a common thread of strong work requirements, these overhauls were a big success: Welfare rolls plummeted and millions of former aid recipients entered the labor force.

The state and local bureaucracies that implement California's antipoverty programs, however, resisted pro-work reforms. In fact, California recipients of state aid receive a disproportionately large share of it in no-strings-attached cash disbursements. It's as though welfare reform passed California by, leaving a dependency trap in place. Immigrants are falling into it: 55% of immigrant families in the state get some kind of means-tested benefits, compared with just 30% of natives.

Self-interest in the social-services community may be at fault. As economist William A. Niskanen explained back in 1971, public agencies seek to maximize their budgets, through which they acquire increased power, status, comfort and security. To keep growing its budget, and hence its power, a welfare bureaucracy has an incentive to expand its "customer" base. With 883,000 full-time-equivalent state and local employees in 2014, California has an enormous bureaucracy. Many work in social services, and many would lose their jobs if the typical welfare client were to move off the welfare rolls.

Further contributing to the poverty problem is California's housing crisis. More than four in 10 households spent more than 30% of their income on housing in 2015. A shortage of available units has driven prices ever higher, far above income increases. And that shortage is a direct outgrowth of misguided policies.

"Counties and local governments have imposed restrictive land-use regulations that drove up the price of land and dwellings," explains analyst Wendell Cox. "Middle-income households have been forced to accept lower standards of living while the less fortunate have been driven into poverty by the high cost of housing." The California Environmental Quality Act, passed in 1971, is one example; it can add $1 million to the cost of completing a housing development, says Todd Williams, an Oakland attorney who chairs the Wendel Rosen Black & Dean land-use group. CEQA costs have been known to shut down entire homebuilding projects. CEQA reform would help increase housing supply, but there's no real movement to change the law.

Extensive environmental regulations aimed at reducing carbon dioxide emissions make energy more expensive, also hurting the poor. By some estimates, California energy costs are as much as 50% higher than the national average. Jonathan A. Lesser of Continental Economics, author of a 2015 Manhattan Institute study, "Less Carbon, Higher Prices," found that "in 2012, nearly 1 million California households faced … energy expenditures exceeding 10% of household income. In certain California counties, the rate of energy poverty was as high as 15% of all households." A Pacific Research Institute study by Wayne Winegarden found that the rate could exceed 17% of median income in some areas.

Looking to help poor and low-income residents, California lawmakers recently passed a measure raising the minimum wage from $10 an hour to $15 an hour by 2022 — but a higher minimum wage will do nothing for the 60% of Californians who live in poverty and don't have jobs. And research indicates that it could cause many who do have jobs to lose them. A Harvard University study found evidence that "higher minimum wages increase overall exit rates for restaurants" in the Bay Area, where more than a dozen cities and counties, including San Francisco, have changed their minimum-wage ordinances in the last five years. "Estimates suggest that a one-dollar increase in the minimum wage leads to a 14% increase in the likelihood of exit for a 3.5-star restaurant (which is the median rating)," the report says. These restaurants are a significant source of employment for low-skilled and entry-level workers.

Apparently content with futile poverty policies, Sacramento lawmakers can turn their attention to what historian Victor Davis Hanson aptly describes as a fixation on "remaking the world." The political class wants to build a costly and needless high-speed rail system; talks of secession from a United States presided over by Donald Trump; hired former attorney general Eric H. Holder Jr. to "resist" Trump's agenda; enacted the first state-level cap-and-trade regime; established California as a "sanctuary state" for illegal immigrants; banned plastic bags, threatening the jobs of thousands of workers involved in their manufacture; and is consumed by its dedication to "California values." All this only reinforces the rest of America's perception of an out-of-touch Left Coast, to the disservice of millions of Californians whose values are more traditional, including many of the state's poor residents.

With a permanent majority in the state Senate and the Assembly, a prolonged dominance in the executive branch and a weak opposition, California Democrats have long been free to indulge blue-state ideology while paying little or no political price. The state's poverty problem is unlikely to improve while policymakers remain unwilling to unleash the engines of economic prosperity that drove California to its golden years.

Kerry Jackson is the Pacific Research Institute's fellow in California studies. This essay was adapted from the winter issue of City Journal.

I have MANY years of experience in trying to appreciate steaming piles of dogshit.

The future holds the possibility to be great or terrible, and since it has not yet occurred it remains simultaneously both.

Inequality is only gonna get worse, folks!

I have MANY years of experience in trying to appreciate steaming piles of dogshit.

But the min wage was raised!

But the min wage was raised!

But the min wage was raised!

Its a state run by an ideology that sees human suffering as an acceptable, if not desirable, function. You all think California or Illinois are just misguided or poorly run, but they actually function exactly as intended.

in any group of people there's a few winners and a whole lotta losers

Les Grobstein's huge hog is proof that God has a sense of humor, isn't it?

Maybe it's because it's one of the few states where someone can get an even chance in a healthy, robust place.

But the facts seem to defy that contention. The gap between the haves and the have-nots is greater in California than anywhere.

Hmm,not a word about the illegal problem.

That isn't a cause of poverty and actually helps the economy. Seriously, illegal immigration is one of the few things that will keep us from falling into the demographic time bomb that is about to destroy the Japanese economy over the next generation.

Hmm,not a word about the illegal problem.

The victims are the American People and the Republic itself.

We need immigrants, but not necessarily illegal ones.

There are serious questions about immigration but it seems we lack serious people in government to address those questions. I've heard Victor Davis Hanson say quite eloquently the things I believe Trump is attempting to say although Trump seems incapable of articulating them in a way that makes sense (though I don't think anyone can really be sure what our current president is trying to say, possibly not even himself).

For example, Prof. Hanson talks about a brilliant student he had, an illegal immigrant from Oaxaca who was burning the U.S. flag. Hanson asked him, "Why are you burning the flag of a country you would hate to leave while flying the flag of a country you would hate to go back to?" And the student simply answered, "I don't know."

We don't have to call these countries "shitholes" to understand that if they were so great, nobody would want to leave them. So then the question becomes, are people responsible for their own governments/nations? And if so, why would we want overwhelming numbers of people from places that are terrible? That's a legitimate question that should be able to be posed without accusations of racism or bigotry.

We need immigrants, but not necessarily illegal ones.

There are serious questions about immigration but it seems we lack serious people in government to address those questions. I've heard Victor Davis Hanson say quite eloquently the things I believe Trump is attempting to say although Trump seems incapable of articulating them in a way that makes sense (though I don't think anyone can really be sure what our current president is trying to say, possibly not even himself).

For example, Prof. Hanson talks about a brilliant student he had, an illegal immigrant from Oaxaca who was burning the U.S. flag. Hanson asked him, "Why are you burning the flag of a country you would hate to leave while flying the flag of a country you would hate to go back to?" And the student simply answered, "I don't know."

We don't have to call these countries "shitholes" to understand that if they were so great, nobody would want to leave them. So then the question becomes, are people responsible for their own governments/nations? And if so, why would we want overwhelming numbers of people from places that are terrible? That's a legitimate question that should be able to be posed without accusations of racism or bigotry.

CA's economy would collapse overnight without undocumented workers.

Is there a better country than ours? Other than America are there folks running from our country? Don't most people (even from places that aren't of color/shitholes) like to live here? Should we also not allow them in because their place of birth is worse than ours?

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We don't have to call these countries "shitholes" to understand that if they were so great, nobody would want to leave them. So then the question becomes, are people responsible for their own governments/nations? And if so, why would we want overwhelming numbers of people from places that are terrible? That's a legitimate question that should be able to be posed without accusations of racism or bigotry.

Heck, the building industry around the nation would collapse. I can pretty much guarantee the house I'm having built right now is being built with illegal workers, but that's what the company I'm using has to do in order to keep costs down as they face a shortage of workers during a time of record building. We literally do not have enough legal residents in the labor force to support our economy today. We need the illegals.

The victims are the American People and the Republic itself.

It's most interesting to hear this kind of responsibility standard applied to other peoples and nations, as those most adamant about deploying it for judgments about others rarely seem all that interested interested in using it for themselves. Indeed, those who do try to encourage their citizens to view themselves as ethically responsible for the actions of their government like Noam Chomsky are frequently labeled as America haters or framed as desperate to blame the US for everything.

Very few people are aware of this.

Freight is sitting all over the country because of a shortage of employable truck drivers.

Have a terrible night and die in MANY fires.

[ I think immigrant enclaves will tear America apart. And these enclaves are different than the Irish ghettoes or Little Italys in that the recent immigrants don't seem to have any desire to assimilate. We have to hop their children will against the wishes of the parents. It is a country's right to regulate who comes and how many.

You say it is different and then describe an identical situation.

The first generation here is always betwixt and between. The second generation keeps the old traditions alive for nostalgia and reverence of their ancestors but are fully immersed in the US. The third generation is embarrassed by the old traditions that are mocked by the suburban group they wish to become.

Have a terrible night and die in MANY fires.

To your first question, I would say that "better" is subjective, but I do think America is unique in that once one becomes an American they are just as American as the ancestors of those who came on the Mayflower. Of course, slavery was a bump in the road and we're still trying to rectify that. When you and I were going at it awhile back you made an eloquent post about what it means to be a black American. I tried to find it without success. I liked what you wrote and I don't think anyone can claim to be more American than those who are descended from slaves. Anyway, if you're asking me, I don't think there is a better country than ours.

And of course we should take immigrants from horrible places, but we should make sure we can assimilate them. I think immigrant enclaves will tear America apart. And these enclaves are different than the Irish ghettoes or Little Italys in that the recent immigrants don't seem to have any desire to assimilate. We have to hop their children will against the wishes of the parents. It is a country's right to regulate who comes and how many.