California has retained its position as the state with the highest poverty rate in the nation, recorded at 17.7% last year, according to newly released data from the U.S. Census Bureau. This rate ties with Louisiana, although it represents a decline from 18.9% in 2023. Nevertheless, nearly 7 million Californians still struggle to meet basic needs such as food, housing, and healthcare.
Laura Pryor, research director for the California Budget & Policy Center, pointed out that the state’s poverty rate had previously dipped to a historic low of 11% after federal relief measures were implemented during the COVID-19 pandemic. “Now, millions have been pushed back into poverty as these effective policies expired,” she noted.
The situation is particularly challenging for seniors and children, especially those in households with mixed immigration or citizenship statuses. The supplemental poverty measure indicates that California’s child poverty rate has more than doubled, rising from 7.5% in 2021 to 18.6% in 2024. “This trend will worsen with recent federal budget decisions to eliminate the child tax credit for mixed-status families,” Pryor said, emphasizing that this credit had kept 2.9 million children out of poverty in 2021.
California’s senior poverty rate has surged to 21.1%, significantly above the national average of 15%, largely due to the high cost of living and medical expenses. Nationally, the supplemental poverty measure shows that medical costs have pushed 7.5 million people into poverty.
Renters, particularly those from communities of color, are disproportionately affected. In 2024, 27.1% of California renters were in poverty, compared to just 11.1% of homeowners. “The lack of federal and state investment in affordable housing, combined with cuts to health and food assistance, will force more families into difficult choices between food, medical care, and rent,” Pryor said.
Federal Policy Changes and Their Impact
The increase in hardship largely stems from the expiration of temporary federal relief programs, including the expanded child tax credit and enhanced SNAP benefits. In July 2025, Congress approved a budget that further reduced funding for healthcare, food assistance, and housing.
Cuts to Medicaid, backed by California’s nine House Republicans, could result in up to 3.4 million Californians losing their Medi-Cal coverage, Pryor warned. Those who retain coverage may face rising healthcare costs due to new co-payments.
State actions, such as freezing Medi-Cal enrollment for undocumented residents and introducing new co-pays, are likely to exacerbate the situation. “These changes, while smaller than federal cuts, can compound the issues,” said Kayla Kitson, a senior policy fellow at the California Budget & Policy Center.
Two Measures of Poverty, Two Perspectives
On the national front, the official U.S. poverty rate dropped to 10.6% in 2024, down from 11.1% the previous year, marking a second consecutive year of improvement. Child poverty fell to 14.3%, and notable declines were seen among men, Hispanic Americans, and Asian Americans. Even traditionally vulnerable groups experienced declines, driven in part by social security and refundable tax credits.
However, the official measure has its limitations, focusing solely on pre-tax cash income and using a national threshold that does not consider regional living costs or non-cash benefits like SNAP.
The supplemental poverty measure provides a more comprehensive view, particularly in high-cost states like California. Nationally, the SPM remained stable at 12.9%, showing no improvement from 2023. Among marginalized groups, the SPM poverty rate for Black Americans rose to 20.7%, while seniors saw their rate increase from 14.2% to 15.0%.
Deepening Inequities
The latest Census data highlights ongoing racial disparities, with Black and Latino Californians facing poverty rates roughly 10 percentage points higher than their white counterparts. “These disparities reflect systemic racism, which will only worsen with recent federal cuts to Medicaid and tax breaks for the wealthy,” Pryor stated.
Almost 2 million Californians live in deep poverty, defined as having total resources, including public benefits, below half the poverty threshold. For a family of four, this equates to around $20,000 annually. “Traditional public supports often miss families in deep poverty. Californians need bold actions from state leaders to mitigate the impacts of these federal cuts,” she urged.
A Call for Change
With federal assistance dwindling, the Budget & Policy Center advocates for California to explore new revenue sources. Kitson emphasized the importance of taxing those who have benefited most from federal tax cuts. “We need to ensure that corporations and wealthy individuals contribute more in state taxes to support the investments needed to alleviate suffering caused by these cuts,” she said.
While critics argue that raising corporate taxes may drive businesses out of California, Kitson countered that the most profitable companies can afford it. “Corporate taxes represent a tiny fraction of overall business expenses—about 0.1%,” she noted.
Looking Ahead
As federal budget negotiations continue, Pryor indicated that state policymakers are closely monitoring discussions around appropriations and discretionary spending, which could impact funding for Medi-Cal, housing supports, and other safety-net services.
The choices California makes—whether to mitigate the effects of federal rollbacks or allow poverty to deepen—could significantly shape its future as a land of opportunity or widening inequality, researchers at the Budget Center warned.
