Gov. Gavin Newsom often boasts that California, if it were a country, would have the world’s fourth-largest economy. But despite its wealth, the state has also seen a sharp increase in poverty since the COVID-19 pandemic, and newly released data shows the disparity lingers.
An analysis of U.S. Census Bureau data released this week found that 7 million California residents — 17.7% of the population — were living in poverty last year. California was tied with Louisiana in 2024 for the highest poverty rate of any U.S. state, according to The California Budget and Policy Center, a Sacramento-based think tank.
The bureau used a poverty measure that considers some, but not all, aspects of California’s infamous cost of living.
“We’re not surprised to see this poverty rate,” said Tracy Weatherby, chief impact officer of Second Harvest of Silicon Valley, which manages a network of food banks. “We see it in the community every day, how much people are struggling to get by.”
Weatherby expects more Californians will fall into poverty — struggling to afford basic needs — because of President Donald Trump’s landmark rollbacks of Medicaid, the health provider for low-income people. Trump’s One Big Beautiful Bill Act, signed this summer, also cuts nutrition assistance.
In California, Newsom’s office estimated that 3.4 million residents will lose health coverage. Nationally, the nonpartisan Congressional Budget Office estimates 10 million more people will end up without health insurance. Some 3 million fewer people in the U.S. will receive benefits from the Supplemental Nutritional Assistance Program, known as SNAP.
U.S. Rep. Lateefah Simon, a Democrat who represents the East Bay, said the high poverty rate “is not just a state issue” but a “national emergency.” She blasted Trump.
“Families who work full time are still unable to pay rent or cover the basics of food, child care and transportation,” Simon said in a recent statement. “Trump and Congressional Republicans’ cruel bill will make it worse by stripping away resources that working families depend on.”
The White House did not respond to a request for comment. In response to criticism, the Trump administration has said the legislation protects and strengthens Medicaid for those who rely on it while “eliminating waste, fraud, and abuse” by enforcing work requirements and restricting benefits to U.S. citizens.
Laura Pryor, the budget center’s research director, said the latest budget agreement hammered out by Newsom and top Democrats in the Legislature will also contribute to worsening poverty.
The $321 billion agreement pares back the extension of Medi-Cal to immigrants living without legal status in California and requires some to shoulder co-pays. Newsom said those cuts were necessary as the state stared down a $12 billion budget shortfall. Along with housing, medical expenses are a top cost for impoverished people.
Food insecurity and poverty are closely linked. Weatherby, of the food bank, said one in four residents is at risk of losing steady access to food in San Mateo and Santa Clara counties. The network serves about half a million residents each month, she said. That high level of need has persisted since the pandemic stormed into the Bay Area five years ago.
The hunger in Silicon Valley, one of the wealthiest places on the planet and an economic powerhouse, underscores the region’s deep and rising inequality.
Nationally, poverty spiked to higher-than-normal levels during the Great Recession and then declined through the 2010s. Like other states, California’s poverty rate plummeted in 2020, when the pandemic strained entire sectors of the economy and state and federal lawmakers pumped spending into assistance programs, including a tax credit for parents. Still, California had the second-highest poverty rate from 2018 through 2020.
As those benefits expired, poverty ticked back up, according to Pryor. The expiration of Bay Area eviction bans also spurred a wave of displacement. Trump’s bill includes a modest expansion of the child tax credit.
When taking into account additional factors, including noncash benefits, geographic variation in housing costs, whether one rents or owns their home and other necessary expenses such as taxes and medical costs, the poverty rate in California dipped to a low of 11% in 2021, then rose to nearly 19% in 2023. This Census Bureau gauge of poverty is called the Supplemental Poverty Measure, and it’s often higher than the Official Poverty Measure of cash resources.
According to the think tank, poverty increased across all California age groups between 2021 and 2024, as well as all racial and ethnic groups. However, child poverty spiked from about 8% to nearly 19%. Among the age groups, seniors had the highest rate of poverty in the state last year, at 21%.
And deep racial disparities exist. Last year, 23% of Black residents and Latino residents, respectively, lived in poverty, according to the think tank, compared to 14% of Asian and 13% of White residents.
The Associated Press contributed to this story.