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Unemployment and Poverty Data Point to Need for Policy Action

Unemployment and Poverty Data Point to Need for Policy Action

Over the past couple weeks, a number of federal reports have shed some light on the economic picture here in California and across the country. We’ve already touched on how the recent U.S. Census Bureau report on insurance coverage has shown a marked drop in uninsurance rates thanks to the Affordable Care Act. However, other reports on employment paint a bleaker portrait of California’s economy, particularly for low-income communities of color.

This week, Dan Walters at The Sacramento Bee penned a distressing essay on the state of our state’s economy. He starts by pointing out that the monthly employment report from the Bureau of Labor Statistics shows that the state added tens of thousands of jobs in the past month but Walters notes that these numbers are misleading based on another report on regional economies from the Bureau of Economic Analysis:

Finally, a Bureau of Economic Analysis report on regional economies revealed that outside the red-hot San Francisco Bay Area, California’s economy trailed national expansion last year, and several rural areas actually saw declines.

Taken together, the voluminous data dumps reveal that those on the upper rungs of the economic ladder, and the communities in which they cluster, particularly in the Bay Area, are doing well. However, very large portions of the state, both geographically and sociologically, are struggling.

Walters rightly points out that the 6.1% unemployment rate in the Bureau of Labor Statistics report does not truly take into account those who are underemployed or who have given up on looking for work. He notes that a more illustrative statistic is the labor force participation rate, which includes all those from ages 16 to 64 who are working or seeking work. California’s labor force participation rate is currently 62.3%, the lowest it’s been in 40 years.

What Walters doesn’t discuss is how even the basic unemployment numbers highlight inequities that disproportionately impact California’s communities of color. The most recent edition of the American Community Survey found that African Americans in California were unemployed (14.7%) at nearly twice the rate of Whites (7.9%). Native Americans (12.1%), Native Hawaiians and Pacific Islanders (12%), and Latinos (9.8%) also have higher unemployment rates.

We discussed the connection between employment and health in our report, The Landscape of Opportunity: Cultivating Health Equity in California:

A well-paying job helps us put a roof over our heads and healthy food on the table. In addition, good jobs can provide health-promoting benefits, including health insurance, paid sick leave, vacation time, and retirement savings to help us when we get older. Unfortunately these quality jobs are few and far between… Limited by continued racism, housing segregation, lack of access to quality education, and language barriers, members of our communities often struggle to find jobs. Even harder to come by are jobs that pay a living wage and are situated near our homes, offer regular hours, or extend sick leave or vacation time to employees.

While Walters’s article paints a bleak picture, there are things that can be done to reduce the burdens of unemployment and poverty in California. For example, in our Landscape report, we recommend that the Federal Poverty Level be updated to more accurately portray the true cost of living for low-income families. We also recommend that more job programs need to be targeted to low-income areas and connect these communities to growing economic sectors. (For example, the technology sector in the Bay Area is driving job creation, but not in the low-income areas of the region.) And finally, we highlight the importance of maintaining California’s safety net programs. As Walters points out in his article, nearly a third of all state residents are enrolled in Medi-Cal and 60% of K-12 students qualify for free or reduced-price lunch because of family economics. This shows how we need to support programs like CalWORKS and CalFresh in the state budget to ensure that all low-income families have a better opportunity to get out of poverty.

Without concentrated policies to help alleviate poverty and create employment opportunities, the bleak state of affairs discussed in Walters’s piece will only get worse.

For more information on the ongoing policy efforts to reduce poverty across California, you should check out the terrific “Perspectives on Poverty” video chat hosted yesterday by the California Budget and Policy Center. You can watch the video here.

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