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Why This Topic Is Important
Income and well being are intricately linked. Poverty can alter children's developmental trajectories in cognitive, socio-emotional, and physical health (1). The effects of poverty on child health and well being can begin during pregnancy, as low-income women are more likely to experience malnutrition and stress, and are less likely to receive adequate prenatal care (2). Children who face economic hardship when they are young, or who experience deep and prolonged poverty, are at greatest risk for poor outcomes (1). The effects of poverty and the stress associated with it can be lasting, contributing to increased risk of not completing high school, poor adult health, and poor employment outcomes, among other adverse consequences (1, 3).

The impacts extend beyond individuals, too. It is estimated that child poverty costs the U.S. more than $1 trillion annually in direct and indirect health costs, increased child homelessness and maltreatment, loss of economic productivity, and costs associated with crime and incarceration (4). Every dollar spent on childhood poverty reduction strategies could reduce this economic fallout by seven dollars (4).
The link between income and wellness is evident even for those living above the poverty threshold. A health gradient exists along the economic spectrum such that health status improves as income level increases; e.g., the health of those in the middle-income range tends to be inferior to those in higher-income groups (3). This is especially concerning given that income inequality in the U.S. has been increasing in recent decades (5).

Rates of poverty tend to be highest among children under age 5, those in immigrant or single-parent families, and African American/black, American Indian/Alaska Native, and Hispanic/Latino children (1, 3).

For more information, see kidsdata.org’s Research & Links section.

Sources for this narrative:

1.  American Academy of Pediatrics Council on Community Pediatrics. (2021). Poverty and child health in the United States. Pediatrics, 137(4), e20160339. Retrieved from: https://publications.aap.org/pediatrics/article/137/4/e20160339/81482/Poverty-and-Child-Health-in-the-United-States

2.  National Academies of Sciences, Engineering, and Medicine. (2020). Birth settings in America: Outcomes, quality, access, and choice. National Academies Press. Retrieved from: https://nap.nationalacademies.org/catalog/25636/birth-settings-in-america-outcomes-quality-access-and-choice

3.  National Academies of Sciences, Engineering, and Medicine. (2019). A roadmap to reducing child poverty. National Academies Press. Retrieved from: https://nap.nationalacademies.org/catalog/25246/a-roadmap-to-reducing-child-poverty

4.  McLaughlin, M., & Rank, M. R. (2018). Estimating the economic cost of childhood poverty in the United States. Social Work Research, 42(2), 73-83. Retrieved from: https://academic.oup.com/swr/article-abstract/42/2/73/4956930

5.  Stone, C., et al. (2020). A guide to statistics on historical trends in income inequality. Center on Budget and Policy Priorities. Retrieved from: https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality
Policy Implications
Poverty has multiple causes and dimensions, many of which public policy can address. Investments in public benefits for children, pregnant women, and families who lack adequate resources for food, clothing, health care, and shelter are highly cost-effective, as are tax credits, parental work support, and other safety net programs that help families meet basic needs in times of financial instability (1, 2). Reducing child poverty, and income inequality more broadly, requires long-term commitments from leaders at the local, state, and federal levels, as well as a broad policy strategy targeting poverty's diverse root causes.

Most low-income families in California have at least one working adult, and while the state has made substantial progress in supporting families in recent years—e.g., through the California Earned Income Tax Credit, Young Child Tax Credit, universal school meals, and minimum wage increases—additional work is needed to address disproportionately high poverty rates among children of color and immigrant families, and to ensure that all Californians have the opportunity to thrive (1, 3, 4).

Policy and program options that could influence family income and poverty include:
  • Ensuring that all eligible families benefit from safety net programs—e.g., cash aid, tax credits, and nutrition assistance—through outreach, elimination of administrative barriers, and increased coordination across programs; also, improving access to the safety net for families with mixed immigration status, who comprise a third of California families in deep poverty (1, 3, 4, 5)
  • Continuing to strengthen the CalWORKs program, which provides cash assistance and employment services, ensuring that monthly grants support an adequate living standard for all families, and moving away from work requirements (1, 3)
  • Promoting efforts to maintain and expand federal and state earned income and child tax credits, increasing the amount of cash provided, making credits fully refundable, and broadening eligibility (1, 3, 6, 7)
  • Continuing to increase investments in high-quality, affordable child care, expanding the number of low-income infants and toddlers receiving state-funded subsidies, and reimbursing providers at rates that are tied the actual cost of effectively recruiting, retaining, and compensating a skilled child-care workforce (3, 4)
  • Strengthening and increasing participation in California's Paid Family Leave program by raising the rate of earnings replacement and providing job protection for those who take time away from work to care for or bond with a new child (3, 4)
  • Promoting state and local policies to increase the supply of affordable housing, provide emergency rental assistance and legal aid for families at risk of losing their homes, and expand supportive services for those experiencing housing instability or homelessness (3, 8)
  • Supporting ongoing efforts to ensure that all children—irrespective of income or immigration status—have comprehensive, continuous, and affordable health insurance coverage; as part of this, maintaining investments in Medi-Cal to improve quality of care, streamline enrollment processes, and expand outreach to families (1, 4, 9, 10)
  • Using lessons learned from the COVID-19 pandemic to reduce fragmentation across safety net programs and plan effectively for future crises or economic downturns (1)
  • Continuing to strengthen child support enforcement programs that work effectively with non-custodial parents and ensure that support reaches families in need (11)
  • Exploring ambitious poverty-reduction strategies that go beyond the current safety net and status quo, and addressing the root causes of poverty and income inequality through institutional reforms (12)
For more information, see kidsdata.org’s Research & Links section or visit Public Policy Institute of California, California Budget and Policy Center, and Center for Law and Social Policy. Also see Policy Implications on kidsdata.org under Food Security, Housing Affordability and Resources, Health Care, and Early Care and Education.

Sources for this narrative:

1.  Danielson, C., et al. (2021). California's future: Safety net. Public Policy Institute of California. Retrieved from: https://www.ppic.org/publication/californias-future-safety-net

2.  National Academies of Sciences, Engineering, and Medicine. (2019). A roadmap to reducing child poverty. National Academies Press. Retrieved from: https://nap.nationalacademies.org/catalog/25246/a-roadmap-to-reducing-child-poverty

3.  California Budget and Policy Center. (2022). The 2022-23 California state budget explained. Retrieved from: https://calbudgetcenter.org/resources/2022-23-california-state-budget-explained

4.  Children Now. (2022). 2022 California children's report card: A survey of kids’ well-being and roadmap for the future. Retrieved from: https://www.childrennow.org/portfolio-posts/2022-california-childrens-report-card

5.  California WIC Association. (2021). Linking WIC for health equity: Expanding access to WIC through horizontal integration. Retrieved from: https://www.calwic.org/wp-content/uploads/2021/07/Expanding-Access-to-WIC-Through-Horizontal-Integration_07_21.pdf

6.  Anderson, A., & Kimberlin, S. (2022). How California can support workers and families with the CalEITC. California Budget and Policy Center. Retrieved from: https://calbudgetcenter.org/resources/how-california-can-support-workers-and-families-with-the-caleitc

7.  Center on Budget and Policy Priorities. (2022). Policy basics: The Child Tax Credit. Retrieved from: https://www.cbpp.org/research/federal-tax/the-child-tax-credit

8.  Mesquita, A., & Kimberlin, S. (2022). Who is experiencing housing hardship in California? California Budget and Policy Center. Retrieved from: https://calbudgetcenter.org/resources/who-is-experiencing-housing-hardship-in-california

9.  The Children's Partnership. (2021). Why is children's enrollment in Medi-Cal lagging in California at a time when children are in most need? Retrieved from: https://www.childrenspartnership.org/research/medical-brief

10.  California State Auditor. (2022). The Department of Health Care Services is still not doing enough to ensure that children in Medi-Cal receive preventive health services. Retrieved from: https://www.auditor.ca.gov/reports/2022-502/index

11.  U.S. Department of Health and Human Services, Administration for Children and Families. (2022). Office of Child Support Enforcement annual report to Congress FY 2019. Retrieved from: https://www.acf.hhs.gov/css/report/fy-2019-annual-report-congress

12.  Grusky, D. B., et al. (n.d.). Ending poverty in California: A blueprint for a just and inclusive economy. End Poverty in California. Retrieved from: https://endpovertyinca.org/wp-content/uploads/2022/02/policy-paper.pdf
How Children Are Faring
In 2016-2020, an estimated 17% of California children lived below the federal poverty threshold ($26,246 annually for a family of two adults and two children in 2020). Across counties with data, official child poverty rates ranged from 6% in San Mateo to more than 30% in Imperial. In Tehama County in 2016-2020, more than one in six children lived in deep poverty—i.e., on annual income lower than half the federal poverty threshold ($13,123 for two adults and two children in 2020).

The Supplemental Poverty Measure (SPM) accounts for expenses (e.g., state-level differences in housing costs) and resources (e.g., government safety net program benefits) not captured in the official poverty measure. According to SPM estimates, 13% of California children lived in poverty in 2020. California's SPM child poverty rate consistently exceeds comparable U.S. figures. More than one in five African American/black and Hispanic/Latino children in California lived below their SPM threshold in 2018-2020, compared with fewer than one in twelve of their white and multiracial peers.

The California Poverty Measure (CPM) builds on the SPM by adjusting for California-specific safety net policies and for regional variation in the cost of living within the state. CPM data for fall 2021 show that 9% of children statewide lived in poverty and 1.7% lived in deep poverty. In the absence of social safety net programs, it is estimated that the child poverty rate would have been nearly 20 percentage points higher and the deep poverty rate more than 9 percentage points higher. Local CPM child poverty rates varied from 7% to 12% across the state's ten most populous counties and from 3% to 17% across legislative districts with data. Overall, children whose parents are single, non-U.S. citizens, or who did not finish high school tend to experience higher rates of CPM poverty and deep poverty than children in families with married parents, U.S. citizens, and higher levels of educational attainment.

The Self-Sufficiency Standard (SSS) represents the estimated income a family needs to adequately meet its basic needs without public or private assistance. Across California counties, the SSS for a family of two adults and two school-aged children in 2018 ranged from $52,566 (Modoc) to $114,215 (Marin) annually. In 2016, nearly half (48%) of all families with children statewide lived on incomes below their SSS.
Rates of poverty among California women with a recent birth—and, by extension, their children—are especially high. Statewide, an estimated 41% of mothers with a birth in 2013-2014 lived in families with income below the federal poverty guideline ($23,850 for a family of four in 2014); for African American/black and Hispanic/Latina mothers, the poverty rate was 60%, compared with 20% or less for Asian/Pacific Islander and white mothers.

Income is not distributed evenly across California households and regions. Statewide and nationally, when households are divided by income into five equally sized groups, those in the highest quintile earned an estimated 52% of all household income in 2016-2020, compared with a 3% share of total income earned by households in the lowest quintile. Among counties with data, median annual income for families with children ranged from $48,294 in Tulare County to $182,607 in Marin County in 2016-2020. Marin County also had the highest level of household income inequality among counties with data in 2016-2020, as measured by the Gini index.

The CalWORKs program, which provides cash aid and services to needy families, served more than 720,000 California children—a rate of 80 per 1,000—in 2020. Among counties with data, participation in CalWORKs ranged from 9 per 1,000 children in San Mateo County to 184 per 1,000 in Del Norte County.