California poverty rate highest in U.S. when housing costs factored in | Hacker News Reader

California poverty rate highest in U.S. when housing costs factored in

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97 pointsjseliger41 comments

This suggests that poverty rates do not consider the important factors required to accurately assess if someone is able to afford life. Which surprises me. Why wouldn't cost of living be included in a term that by definition refers to the ability to cover the cost of living?

There are probably dozens of reasonable ways to compute poverty rates, and you can pick whichever fits your preconceived notions best.

I believe this is because poverty rate is determined on a national scale, whereas this factors in California's particularly high cost of living.

why would that surprise you?

In Nigeria you obviously won't spend as much on rent and food as in Amsterdam when measured in the same currency. It doesn't make any sense not to include the cost of living to some degree. Making that assumption may or may not have been conscious, but questioning why it surprises someone doesn't help the discussion. They were asking why the cost of living is not included by default, not wondering what possessed them to have such a notion.

It's why you should be skeptical of the "X% of people globally have been lifted out of extreme poverty in the past X years" stories.

Some skepticism is never a bad idea.

Fortunately, third world poverty is rapidly decreasing by whatever measure you choose to look at!

Don't confuse extreme poverty and poverty.

Extreme poverty is defined as: "a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."

Generally, I'm skeptical of adjusting for cost of living when you have housing prices as you do in the bay area. You still have options to move away.

yeah, as long as you don't care leaving the place you grew up in, your family and friends, not to mention having to actually figure out another place to go, find a job, get a new place (including deposit).

Easy.

A lot of people don't seem to realize that the bay area is an actual place with a non-transient population, not just a venue for tech workers to establish themselves.

We don't live in a society that gives you a birthright to the building you're born in. I'm not sure why we should have a birthright to a geographically delineated number of them.

You’re right that people being displaced by gentrification don’t have a birthright to continue living in their neighborhood. The problem is that the people displacing them do have a birthright - the birthright to anyone’s neighborhood, anywhere in the world. Do you also feel like that is a problem, or do you only object to “birthrights” for poor people who depend on their neighborhood for support and sometimes survival?

They don't have a birthright to a place any more than those displaced. Do you honestly think the displacers want, more than anything else, to live in a very expensive apartment in San Francisco? If they have some birthright to "anyone's neighborhood," why aren't they all living in mansions on the beach? The only birthright we agree on is the right to resolve disputes according to the rules of our government. Money provides a way to mediate the situation where two people want the same thing without them having to shoot each other over it. I much prefer the model where the mode of competition is economic benefit rather than "ability to be born in a good position."

> I much prefer the model where the mode of competition is economic benefit rather than "ability to be born in a good position”

Great! I also support economic competition as well as leveling the playing field by limiting the unfair advantages of being born in a good position.

Of course, as you probably know, social mobility is at historic lows in the US. This means people born into wealthy families are most likely to remain wealthy, and people born into poor families are most likely to remain poor. By your own argument, that is a problem because it shifts competition to “ability to be born in a good position”.

Therefore it seems that we agree after all!

Unless of course you’re not being intellectually honest and are using big words like “economic competition” only when it supports your pre-existing ideology.

You've completely changed the subject. I meant position in a literal, not figurative, sense.

Weird accusations of intellectual dishonesty aside, we do agree on economic mobility but that wasn't the topic at hand. Economic mobility doesn't mean "give the most valuable apartments in the United States to the lower class so they can live there because they don't want their lives to change."

> You still have options to move away.

True, but that is not a costless option.

This is the real reason CoL should be factored into the poverty line. If you’re barely (or not even) getting by, where do you get the money to move? Remember that many Americans can’t even meet a $500 emergency expense. Someone who can’t come up with $500 by any means in an emergency is not going to be able to afford to go anywhere.

Yep. & Aside from having cash to overcome unexpected expenses, making changes to reduce your cost of living or improve your financial situation often (not always) takes time, money, resources. E.g. moving house, finding a place to live with a kitchen to reduce food expenses, finding a better job...

  Everybody knows that the dice are loaded
  Everybody rolls with their fingers crossed
  Everybody knows the war is over
  Everybody knows the good guys lost
  Everybody knows the fight was fixed
  The poor stay poor, the rich get rich
  That's how it goes
  Everybody knows

- Leonard Cohen

When measured in absolute terms (e.g. % of population that lacks access to sufficient food, electricity, education, running water, etc.) poverty has indeed been decreasing. For instance, I read an Economist article a while back that explained how during the 1960s and 70s a double digit percentage of the US population didn't have plumbing and similar figures for electricity. Today it's in the single digits, near zero.

I think 19% really understates the scale of the problem. If you removed all the subsidies and the housing subsidies and enormous programs, I would imagine, that number would be even higher.

I really wish they would go into the root causes of what's causing all this hardship. Too often, these articles don't cover the real causes and just cause knee-jerk emotional reactions. Without knowing the true cause, we can never address the real problem: An imbalance between the number of jobs and the housing availability. Either housing supply has to increase or all those FB/Google employers bringing in employees from out of the state and outside the US, need to stop doing that in areas that don't want to grow.

The hardships we face here in CA are all self imposed. Voters and their politicians enacted each and every single regulation that's prevented housing from being built over the last 50 years. It doesn't have to be this way. There are other places that grow just as quickly and don't have these problems: Houston, Dallas, Austin. Austin's already getting worse due to all the anti-housing folks moving there (ironically whilst escaping CA housing problems). Chicago has over 2 million residents, with great housing and very little government intervention/regulations. CA can learn a lot from those states and cities.

Either housing supply has to increase or all those FB/Google employers bringing in employees from out of the state and outside the US, need to stop doing that in areas that don't want to grow.

How are areas to make this determination? By democratic vote? At what level, the almost invisible local electorate? Maybe I'm cynical about the level of corruption in local politics here in NY, but call me skeptical.

And what communities don't want new jobs to materialize? It brings infusions of cash, even if housing demand goes crazy as a consequence. A depressed housing market, if you remember the landscape in 2008, caused a lot of strife.

> Accounting for housing costs, California has nation’s highest poverty rate

I assume that the underlying study breaks the population down into quintiles or deciles based on income and then looks at spending on housing for each group, but it's not clear from the article.

If you simply compare average income to average housing costs you're going to get a skewed result. A software engineer living in the Bay Area could be well over the national average for housing (40% or 50% of income, maybe more in some cases) but they're definitely not contributing to an increased poverty level.

Another way of looking at this is that California's poorest counties are in the Central Valley. I suspect this is also where California's cheapest real estate is at.

Good point. To elaborate on it:

> If you simply compare average income to average housing costs you're going to get a skewed result.

Particularly because averages give skewed results given outliers, which there surely must be. (Particularly with wages, I imagine, someone can be hugely overpaid (like 1M vs. 100k), but you can hardly be 900k underpaid because then you'd be making negative money.) The median value makes more sense when one does not want to be affected as much by outliers.

Not that comparing the median housing price to the median income is necessarily a correct or complete view; I just noticed that we're talking about averages which are even worse for this purpose.

This is exactly right. A statewide housing adjustment doesn't make any sense. Bay Area housing cost doesn't impact the poorest regions of the state which are in Mojave desert, Sierra Nevada foothills, far north towards Oregon border

California is the highest state; DC is the highest of the regions listed at 20.2% vs California's 19% [2].

Also interesting to note that the rate in California has been dropping over the past few years - 20.6% avg for 2013/2014/2015 [0], 20.4% for 2016 [1], and 19% for 2017. The national supplemental poverty rate is relatively flat over the same time frame -- 14.3% in 2015 and 13.9% in 2017

[0] https://www.census.gov/content/dam/Census/library/publicatio...

[1] https://www.census.gov/content/dam/Census/library/publicatio...

[2] https://www.census.gov/content/dam/Census/library/publicatio...

Might be right. I chose to live in a Vanagon Westfalia rather than pay the extortion rates for Valley rent. Single-family homes far from employment are around $1M. In other states, such homes go for $90-300k. This implies around 90% of the value is in the land.

Basically, if you're not actively working in tech or servicing tech companies, it doesn't make any sense to remain in the Valley. On retirement, definitely also move somewhere else because it's a pay-to-play game.

> Basically, if you're not actively working in tech or servicing tech companies, it doesn't make any sense to remain in the Valley.

From a game theory perspective, certainly not. The danger is: what happens when all the tech employees suddenly don't have any Uber drivers, any paramedics, any supermarket vendors, hell any cleaning personnel any more? When their homes get raided by criminals because cops cannot afford living in SV any more? When their kids have nowhere to go to school?

That's the thing why the Free Market does not work for basic human necessities. If the Free Market would do its job Walmart and Amazon employees wouldn't be forced to top their "wages" up with food stamps and other social benefits.

The free market handles these factors just fine. If Uber can't find any drivers in the bay area they'll up their prices and pay drivers more. If municipalities can't find people to provide government services, they'll increase wages. That's why BART janitors pull six figures.

> The free market handles these factors just fine.

Then do tell me why companies like Amazon and Walmart get away with, essentially, state subsidies for their employees and why in many parts of the US teachers complain about being massively underfunded, to the point of Oklahoma switching to 4-day school days so teachers can work on the side to earn money?!

Amazon and Walmart don't receive subsidies. Their workers receive subsidies. You may be tempted to ask, "why don't we make Amazon and Walmart pay wages that put workers above the poverty line?" The likely answer is that this would put the companies at a competitive disadvantage and they would end up laying off much of their workforce to stay in business. And now the government is paying an even bigger unemployment subsidy to these former workers.

As for Oklahoma, that's the voters making the decision that cutting school hours is a better choice than to increase teacher spending. Sure you and I don't agree with this choice, but elections say Oklahoma voters do.

To paraphrase Morty, “That sounds like getting subsidies with extra steps.”

Then let me spell it out more explicitly. Some company pays their employees $10 an hour. This isn't enough to get by on, so the government give each of them an extra $2 an hour to spend on necessities (I know, most welfare systems don't pay out hourly just bear with this example). Who is helped by this extra money? Not the company. If you cut the welfare, the company's profits (or losses) remain exactly the same. Their workers will lead worse lives and experience greater hardship. The workers don't find other jobs. If better paying jobs existed they would have taken them already. Thus, it's not a subsidy for the company. It's a subsidy for the worker. Eliminating welfare has zero impact on the company's profits.

This is why making companies pay tax penalties if their workers are on food stamps is a terrible ides. It'd make employers more wary of recipients of welfare, thus making it even harder for poorer minorities, single mothers, etc. to find jobs. And not to mention, it'd create further incentive to outsource or automate these jobs.

The free market would have developers building housing here.

> The free market would have developers building housing here.

... for rich people, not the poor. There is no profit in building affordable housing when one can extract ten times the value from luxury building.

My father was a builder (albeit in a different country) but affordable housing (or standardized apartments) are actually a builder favorite. They are quick to turn around, no architects involved and require smaller capital outlays/financing. Sure he might make less but it's easier money. As long as some one is paying I think the free market will build it.

You can do affordable housing when the building ground is cheap. Once you hit a certain floor (Munich & Berlin routinely do), affordable housing simply is not financeable.

oh, the joys of traveling thru real life tent city on your way to Comic-Con/E3, real culture shock to people from Europe.

Presumably attendees from Calais or Paris experienced slightly less culture shock.

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