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Family Income and Poverty (see data for this topic)

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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 risk factors such as malnutrition and stress, and are less likely to receive 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 risks of dropping out of school, poor adult health, and poor employment outcomes, among other adverse consequences (1, 3, 4). The impacts extend beyond individuals, too. For example, it is estimated that one percentage point increase in child poverty could cost the U.S. economy an extra $28 billion annually in the future, due in part to lower future earnings among those who grow up in poverty (5).

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).
Rates of poverty tend to be highest among children under age 5, those in single-parent families, and African American, Latino, and American Indian/Alaska Native children (4, 5, 6).

For more information on Family Income and Poverty, see kidsdata.org’s Research & Links section.

Sources for this narrative:

1.  Evans, G. W., & Kim, P. (2013). Childhood poverty, chronic stress, self-regulation, and coping. Child Development Perspectives, 7(1), 43-48. Retrieved from: http://www.centrelearoback.org/inrich/assets/documents/INRICH-PUBCH-EvansKim_ChildhoodPoverty.pdf

2.  Hamad, R., & Rehkopf, D. H. (2015). Poverty, pregnancy, and birth outcomes: A study of the Earned Income Tax Credit. Paediatric and Perinatal Epidemiology, 29(5), 444-452. Retrieved from: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4536129

3.  Aron, L., et al. (2015). Can income-related policies improve population health? Urban Institute & Virginia Commonwealth University Center on Society and Health. Retrieved from: http://www.urban.org/research/publication/can-income-related-policies-improve-population-health

4.  Child Trends Databank. (2016). Children in poverty. Retrieved from: http://www.childtrends.org/?indicators=children-in-poverty

5.  Nichols, A. (2013). Explaining changes in child poverty over the past four decades. Urban Institute. Retrieved from: http://www.urban.org/publications/412897.html

6.  Bohn, S., & Danielson, C. (2017). Geography of child poverty in California. Public Policy Institute of California. Retrieved from: http://www.ppic.org/publication/geography-of-child-poverty-in-california
Policy Implications
Family poverty has multiple causes and dimensions, many of which public policy can address. Maintaining a public safety net for pregnant women and children whose parents do not have the resources to provide adequate food, clothing, health care, and shelter can mitigate poverty (1, 2). Other strategies, such as tax credits and parental work support, also can help lift families out of poverty. Reducing child poverty requires a long-term commitment from leaders at the local, state, and federal levels, as well as a broad policy strategy targeting diverse root causes. While California has made strides in recent years, including a new state Earned Income Tax Credit and minimum wage increases, continued efforts are needed to ensure that all children and families have the opportunity to thrive (1). This is especially important given the current national policy context and potential cuts to federal safety net programs.

Policy and program options that could influence family income and poverty include:
  • Maintaining and strengthening CalWORKs (the California Work Opportunity and Responsibility to Kids program, the state's version of the federal Temporary Assistance to Needy Families program, or TANF), which provides cash assistance and employment support to families, ensuring that benefits support an adequate living standard and families receive the assistance necessary to transition from welfare to work (1, 3, 4)
  • Ensuring that eligible families enroll in safety net programs—such as CalFresh (California’s version of the federal Supplemental Nutrition Assistance Program, or SNAP, also known as food stamps), free or reduced-price school meals, and the Supplemental Nutrition Program for Women, Infants, and Children (WIC)—through outreach and elimination of administrative barriers; also, ensuring that safety net programs have the capacity to expand during economic downturns, when unemployment and family needs increase (1, 4, 5)
  • Maintaining and strengthening tax credits aimed at reducing poverty among families, e.g., the federal Earned Income Tax Credit and Child Tax Credit, and raising awareness about the recently implemented California Earned Income Tax Credit (1, 6, 7)
  • Extending refundable state tax credits to all families with children, irrespective of immigration status, and including those with no earned income (7)
  • Increasing access to high-quality, affordable child care in a variety of settings, especially for low-income children, by capitalizing on the expansion of federal and state subsidies for early childhood programs and ensuring that eligible children receive subsidies (1, 8)
  • 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 (9)
  • Promoting state and local policies to increase the supply of affordable housing, such as expanding housing bonds, supporting inclusionary zoning requirements, and creating other funding mechanisms (10)
  • Adjusting state tax credits to account for regional variation in the cost of living, and expanding eligibility for safety net programs in particularly high-cost areas (7, 11)
  • Ensuring comprehensive and consistent benefits across public and private health insurance carriers, so all families can access high-quality, affordable care; this may include increasing Medi-Cal provider rates, reducing the administrative burden on providers, and developing a tool to regularly monitor children's access to quality care in Medi-Cal (8)
  • Continuing to strengthen child support enforcement programs that work effectively with non-custodial parents and ensure that support reaches the families that need it (12)
For more policy ideas and information on this topic see kidsdata.org’s Research & Links section or visit the Public Policy Institute of California, the California Budget and Policy Center, or the Center for Law and Social Policy. Also see Policy Implications on kidsdata.org under Unemployment, Housing Affordability, and Homelessness.

Sources for this narrative:

1.  Danielson, C. (2018). California's future: Social safety net. Public Policy Institute of California. Retrieved from: http://www.ppic.org/publication/californias-future-social-safety-net

2.  Page, M. (2017). Safety net programs have long-term benefits for children in poor households. UC Davis Center for Poverty Research. Retrieved from: https://poverty.ucdavis.edu/policy-brief/safety-net-programs-have-long-term-benefits-children-poor-households

3.  Davis, L. M., et al. (2016). Evaluation of the SB 1041 reforms to California's CalWORKs welfare-to-work program: Findings regarding the initial policy implementation and outcomes. RAND Corporation. Retrieved from: https://www.rand.org/pubs/research_reports/RR1348.html

4.  Schumacher, K. (2015). Even CalWORKs and CalFresh food assistance combined fails to lift families out of poverty. California Budget and Policy Center. Retrieved from: http://calbudgetcenter.org/resources/even-calworks-and-calfresh-food-assistance-combined-fails-to-lift-families-out-of-poverty

5.  California Department of Public Health, Center for Family Health. (2016). Making connections: Understanding women’s reasons for not enrolling in WIC during pregnancy, California 2010-2012. Retrieved from: https://www.cdph.ca.gov/Programs/CFH/DMCAH/MIHA/CDPH Document Library/MIHA-MakingConnections-2010-2012.pdf

6.  Anderson, A. (2017). California should do more to raise awareness of the California Earned Income Tax Credit (CalEITC). California Budget and Policy Center. Retrieved from: http://calbudgetcenter.org/resources/california-raise-awareness-california-earned-income-tax-credit-caleitc

7.  Bohn, S, & Danielson, C. (2017). Reducing child poverty in California: A look at housing costs, wages, and the safety net. Public Policy Institute of California. Retrieved from: http://www.ppic.org/publication/reducing-child-poverty-in-california-a-look-at-housing-costs-wages-and-the-safety-net

8.  Children Now. (2018). 2018 California children's report card: A review of kids' well-being and roadmap for the future. Retrieved from: https://www.childrennow.org/reports-research/2018cachildrensreportcard

9.  Stanczyk, A. (2016). Paid family leave may reduce poverty following a birth: Evidence from California. Employment Instability, Family Well-being, and Social Policy Network Measurement Group. Retrieved from: https://ssascholars.uchicago.edu/sites/default/files/einet/files/stanczyk_einetbrief.pdf

10.  Johnson, H., & Cuellar Mejia, M. (2017). California's future: Housing. Public Policy Institute of California. Retrieved from: http://www.ppic.org/publication/californias-future-housing

11.  Bohn, S, & Danielson, C. (2017). Geography of child poverty in California. Public Policy Institute of California. Retrieved from: http://www.ppic.org/publication/geography-of-child-poverty-in-california

12.  U.S. Department of Health and Human Services, Administration for Children and Families. (2017). Office of Child Support Enforcement Annual Report to Congress FY 2015. Retrieved from: https://www.acf.hhs.gov/css/resource/fy-2015-annual-report-to-congress
How Children Are Faring
In 2016, an estimated 20% of California children lived below the federal poverty threshold ($24,339 annually for a family of two adults and two children), up from 17% in 2007. Across counties with data in 2012-2016, official child poverty rates ranged from 10% in some Bay Area counties to 39% in parts of the Central Valley. In Fresno County, almost one in five children (19%) lived in deep poverty—i.e., on annual income lower than half the federal poverty threshold ($12,170 for two adults and two children in 2016).

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, 24% of California children lived in poverty in 2013-2015, compared with 16% nationwide. Among California racial/ethnic groups with data, SPM estimates ranged from fewer than one in eight white children living in poverty (12%) to one in three Hispanic/Latino children (33%).

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 from 2013-2015 show that 23% of children statewide lived in poverty and 5% lived in deep poverty. In the absence of social safety net programs, it is estimated that the child poverty rate would have been 14 percentage points higher and the deep poverty rate 13 percentage points higher during this period. CPM child poverty rates vary widely across counties, from 12% in Placer County to 29% in Santa Barbara County, among regions with data in 2013-2015. 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.
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.

The CalWORKs program, which provides cash aid and services to needy families, served nearly 880,000 California children—a rate of 96 per 1,000—in 2017. Among counties with data, participation in CalWORKs ranged from 15 per 1,000 children in San Mateo County to 231 per 1,000 in Del Norte County.