Over Half of Angelenos, One-Third of Californians Teeter Toward Poverty

Photos by Brian Addison. Above: individuals experiencing homelessness line the LA River at the PCH overpass in Long Beach.

DeVaughn [last name redacted] has been living in her car for nearly six months now with her teenage daughter, most of it spent at Bixby Park in Long Beach though she isn’t from here. She first came here in January.

“I used to live in South LA,” she had told me back in February. “But my building got bought and I received a notice that my rent was going up—y’know, beyond my means. I live paycheck-to-paycheck like a lotta folks in that neighborhood—all my neighbors had to leave… I asked my daughter where she wanted to be for the time being and she said, ‘The beach.’ So we came here so I can still commute to work and take her to school.”

On my most recent passing by, DeVaughn pointed to a nearby couple, huddled under a tarp hanging from a small tree behind the park’s band stand: “I made it work the best I could for a little bit but… We’re just lucky we have a car.”

DeVaughn was what housing advocacy group and nonprofit Prosperity Now (formerly known as Corporation for Enterprise Development) “liquid asset poor,” meaning her household is one that can’t hold a roof over their head for more than three months if they lose a job, face a medical crisis or suffer another income disruption—and now, she finds herself in poverty.

She was part of the 52% of Los Angeles citizens who sit in that same situation. The disproportion toward communities of color is even more disturbing: 64% of Black households and 76% of Latinx households are liquid asset poor in Los Angeles. And yes, you read that right: over half of all Angelenos teeters on poverty while over a third—37.2% to be exact—of all Californians sit in the same dire situation.

California’s overall poverty rate sits at 13.9%, comparable to the national poverty rate of 13.8%. When it comes to households of color, that increases nearly double to 26.4%.

Things get more dire as we go down the list:

  • Over 15% of Californias have zero net worth
  • Nearly 14% of Californians do not have a checking or savings account—double the national average
  • The average housing cost burden on renters in California is 55.8% compared to 39.5% for homeowners
  • People of color are 2.2 times more likely to be uninsured for health compared to whites
  • Whites own their own homes 1.4 times more than people of color
  • Whites own their own businesses 1.5 times more than people of color
  • Unemployment hits people of color 1.4 times higher than it does whites

“Beyond providing a cushion to get families through emergencies, increased savings and wealth allow families to invest in their futures and gain ground for future generations,”said Prosperity Now President Andrea Levere in a statement. “It’s clear that far too many people are stuck in economic limbo.”

The larger issue, specifically when it comes to Los Angeles, is that it is easy to recognize how many in Los Angeles are “income poor,” or what is defined as being unable to get above the federal poverty line.

Far more important, however, is analyzing the aforementioned “liquid asset poor” households—and how they get to that point. When it comes to the overall discussion of how we save lives before they fall into disarray, we have—for too long—surrounded the conversation with solely how much family earns, not how much they save or how accessible services that help them financial stability are.

The Mayor’s Office Economic Development in Los Angeles made some recommendations on how the city and county can foster financial stability amongst all families, particularly those already at or approaching risk:

  • Provide pathways to increase earning potential by:
    • Raising graduation rates of high school and college students.
    • Investing in career technical education that focuses on training and developing skill competencies that meet 21st-century employer needs.
    • Collaborating with partners to develop a comprehensive career education strategy that closes the skills/job gap.
  • Enhance financial stability through building emergency savings and assets by:
    • Increasing the number of Volunteer Income Tax Assistance (VITA) sites throughout the City and integrating asset-building programs that encourage and support filers in saving portions of their refunds.
    • Coordinating and supporting citywide savings initiatives to motivate, encourage and support low- to moderate-income households to save money, reduce debt and build wealth.
  • Improve financial access to build the foundation for financial stability by:
    • Increasing access to first-time homebuyer opportunities and homeownership protection programs.
    • Streamlining access to affordable housing.
    • Providing residents access to safe and responsible financial products and services.

To read the full Prosperity Now ScoreCard, click here. To read the California-specific profile, click here.

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Brian Addison has been a writer, editor, and photographer for more than a decade, covering everything from food and culture to transportation and housing. In 2015, he was named Journalist of the Year by the Los Angeles Press Club and has since garnered 16 nominations and two additional wins for Best Political Commentary for his work at KCET and Best Blog for Longbeachize, a section of the Long Beach Post. Brian currently serves as a columnist and editor for the Long Beach Post.