California is staggeringly wealthy; home to major agricultural businesses and influential global tech companies, it boasts an economy larger than many nations. But the state also struggles with a persistent poverty crisis.
A new report released this week by the California Budget and Policy Center, a Sacramento-based think tank, found that 7 million California residents, or 17.7% of the population, lived in poverty last year.
California is tied with Louisiana for the title of highest poverty rate of any U.S. state in 2024, according to the think tank’s analysis of U.S. Census Bureau data.
The analysis, adjusted for factors such as family size and local housing costs, finds that these 7 million Californians did not have the resources to meet their basic needs. The number of Californians living in poverty is roughly equivalent to the populations of Los Angeles, San Diego, San Jose and San Francisco combined.
Steep housing costs in the state are pushing more people into poverty, with housing the single largest cost in most family budgets, the report said. The problem is especially pronounced for renters. More than a quarter, or 27.1%, of California renters experienced poverty in 2024, compared with 11.1% of homeowners.
The state’s poverty rates have climbed drastically from a recent historic low of 11% in 2021.
The poverty rate in California and in other states had dropped in 2021, as local and federal lawmakers expanded public benefits — including tax credits for parents, emergency allotments to purchase food, and rental protections — to counter the effects of COVID-19 lockdowns that shut down workplaces and strained the economy.
But poverty rates have risen as such policies have been rolled back.
“When Congress allowed these effective policies to expire, they immediately reversed progress, causing the largest increase in the national poverty rate in 50 years, and a significant spike in California’s poverty rate,” the report said.
Impending federal cuts to healthcare and food assistance, as well as reductions in California’s state budget, will further drive up living costs, making it harder for people to support their basic needs, the report said.
Among age groups, poverty rates remain highest among children and for older adults in California. And poverty increases in recent years are starkest for Black and Latino populations. These racial groups experience poverty at approximately 10 percentage points higher than white Californians, the report said.
Federal policies targeting immigrants — such as cuts to food assistance for lawfully present immigrants, including people granted asylum, refugees and trafficking victims, and removal of child tax credits for immigrant parents without Social Security numbers — will only serve to exacerbate that divide, the report said.
