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California’s poor face an inflationary dilemma – San Bernardino Sun

California’s economy was already booming before COVID-19 hit the state two years ago, with record low unemployment and soaring personal incomes.

Even so, California has the highest poverty rate in the nation as calculated by the Census Bureau, with about 15% of its nearly 40 million residents living in poverty, largely due to the exorbitant cost of living. state high, especially for housing.

The Public Policy Institute of California (PPIC), using a similar methodology, concluded that before the pandemic “nearly one in six (16.4%) Californians were not in poverty but lived fairly close to poverty level. …All told, more than a third (34%) of state residents were poor or near-poor in 2019”

There’s no doubting that the massive shutdown of the state’s economy, ordered by Governor Gavin Newsom to combat the pandemic, has made things worse for millions of already-emotional Californians. find it economically difficult.

While most workers in the higher income quintile could adjust by continuing to work from home, Californians in low-wage service sectors such as hotels and restaurants have seen make their disappear.

Unemployment insurance and other safety net programs have partially offset income losses, but the net impact on the working poor remains negative, exacerbating state poverty and Those temporary supports will expire when the nation’s overall economy has largely recovered.

However, California’s recovery from the COVID-19 recession has been slow. It has regained less than three-quarters of its more than two million jobs lost, 1.2 million workers are still unemployed and a 6.5% unemployment rate is much higher than the 3.9 rate. % of the whole country.

Equal to those numbers, the economic predicament among low-income California households is being made worse by another phenomenon: inflation.

A new PPIC study shows that the impact of rising costs of living is hitting these families hardest.

Overall, the cost of living in California and four other Pacific Rim states has increased by 8.2 percent over the past two years, driven by soaring food, energy and automotive fuel costs, PPIC calculates. .

PPIC calculates: “In 2019, low-income families (in the bottom five) spent 83% of their budgets, or $26,500, on essential needs such as food, shelter, clothing, etc. , transportation and health care. “The highest income families (in the top five) spent significantly more on these, around $82,000, but this represented a much smaller share of their total spending ( sixty four%).”

“We estimate that the lowest income families have seen an overall price increase of 9.6% since December 2019, while the highest income families have seen an increase of 8.2%”.

https://www.sbsun.com/2022/01/25/californias-poor-face-new-a-dilemma-with-inflation/ California’s poor face an inflationary dilemma – San Bernardino Sun

Tom Vazquez

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