In summary
While pandemic-era safety net programs ended, 2024 saw an increase in guaranteed income pilot programs.
California continues to grapple with significant levels of poverty, leading the nation as the state with the highest poverty rate with disproportionately higher impacts on Black and Latino residents.
According to the latest available Census data, the state’s poverty rate increased to 18.9% in 2023, up from 16.4% in 2022 and 11.0% in 2021. The state’s poverty rate was particularly high among Black and Latino Californians and higher than the 2019 pre-pandemic numbers.
California’s high poverty rate means that approximately 7.3 million state residents lack the resources to meet their basic needs. For perspective, more Californians live in poverty than the combined population of the state’s four largest cities: Los Angeles (3.8 million), San Diego (1.3 million), San Jose (969,655) and San Francisco (808,988).
Major pandemic-era social safety net programs have phased out, leaving many Californians struggling. In early 2024, the re-evaluation of Medi-Cal income eligibility continued, resulting in tens of thousands losing coverage after the protections barring disenrollment expired. Similarly, the boost to CalFresh benefits ended, and food banks reported unprecedented demand, with some regions experiencing sustained record numbers of clients.
Economic pressures and inflation spurred continued labor activity across California. Building on the “hot labor summer” of 2023, sectors such as hospitality, health care, and entertainment saw ongoing negotiations and new strikes. California recorded over 80 labor actions in 2024, with teachers, nurses, and public sector employees joining the movement.
Legislative efforts to provide unemployment benefits for workers on strike were revisited in 2024 but remained stalled. Meanwhile, minimum wage hikes in health care ($25 per hour by 2028) and fast food ($20 per hour starting April 2024) are expected to slightly alleviate income inequality in these sectors. However, analysts caution that wage increases may be offset by rising housing and childcare costs, which continue to outpace inflation-adjusted earnings.
A significant highlight for 2024 has been the roll-out of new guaranteed income pilot programs. With $30 million in funding, these initiatives aim to provide no-strings-attached payments to low-income pregnant individuals and young adults exiting foster care. Early feedback from pilot sites indicates these programs have improved financial stability for recipients. Still, experts warn that limited funding and scope may not address the broader issue of systemic poverty.
2025 outlook
As the state enters 2025, several critical themes remain, such as rent increases and economic uncertainty. Rent increases in major metropolitan areas like Los Angeles and San Francisco remain a top contributor to poverty. Advocates are pushing for stronger tenant protections and additional investments in affordable housing. With fears of a potential economic slowdown, California’s lower-income workers remain vulnerable to job loss and wage stagnation. The year will also test the effectiveness of minimum wage hikes and anti-poverty measures passed in previous years, as income inequality remains one of the state’s most pressing challenges.