A new report reveals that California, despite being home to the nation’s largest concentration of wealth, now shares the highest poverty rate in the US with Louisiana. The findings show 17.7% of Californians, roughly 7 million people, cannot cover basic needs, with children, renters, and people of color among the hardest hit. Experts warn that recent federal and state budget cuts could push poverty levels even higher, reversing historic progress made during the pandemic.
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Stark Findings Released
The California Budget and Policy Center report highlighted that poverty rates in the state remained “statistically unchanged” from 2023. Child poverty has more than doubled since 2021, reflecting a major reversal from historic lows reached during pandemic-era protections. Researchers linked the surge directly to the expiration of programs such as the federal child tax credit, which had played a key role in reducing hardship.
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End of Pandemic Policies
California had implemented sweeping protections during the COVID-19 pandemic, including eviction moratoriums, rental assistance, and motel rooms for unhoused residents. These temporary measures significantly reduced poverty levels, but their expiration coincided with a sharp rise in economic hardship. By 2024, poverty had climbed back to levels not seen since before the pandemic, erasing years of progress.
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Children Among Hardest Hit
The report found that children have been disproportionately affected, with child poverty more than doubling since 2021. Researchers pointed to Congress’s decision to let pandemic-era child benefits expire as a driving factor. “When Congress allowed these effective policies to expire, they immediately reversed progress, causing the largest increase in the national poverty rate in 50 years,” the report noted.
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Federal Cuts Intensify Crisis
The analysis warned that Donald Trump’s recently signed federal budget will cut into healthcare, food assistance, and other vital programs. Experts have called it “the harshest bill we’ve ever seen since budget deficits became an issue 40 years ago.” The reductions are expected to hit millions of Americans, including California’s most vulnerable, further undermining the state’s social safety net.
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State Budget Reductions
At the state level, California has also introduced “significant reductions” in healthcare and other support programs. Combined with federal cutbacks, these changes are projected to drive poverty rates even higher in the coming years. Advocates say the rollback shows how quickly poverty can worsen when economic protections are removed.
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Calls for Bold Action
The report urged state leaders to adopt sweeping reforms to counter the crisis, including creating a graduated corporate tax rate and ending certain corporate tax breaks. “For California to be a state for all to thrive, regardless of race or ethnicity, gender, and other identities, state leaders should take bold action to mitigate the rise in poverty and present a different vision for California than the one the federal government has put forth in recent months,” the report concluded.