The Great Recession brought poverty levels to new highs, peaking at 27 percent in 2012. While the Bay Area’s poverty rate has declined for four consecutive years during the economic recovery, it is still higher than before the recession. In 2015, nearly one out of four Bay Area residents, or about 1.8 million people, were in poverty. The recent economic boom has not necessarily translated to higher incomes for our region’s most economically vulnerable households. This trend is due in part to declining median wages and limited job growth in low-wage and moderate-wage occupations.
Since the 1960s, the reduction of poverty in the United States has been a top policy priority, with numerous federal and state programs crafted to improve the economic conditions of low-income households. Given the high cost of living in major metro areas, we tend to look at families living below 200 percent of the federal poverty line to better understand how many people are struggling to make ends meet. While the Bay Area is a region of relative prosperity compared to the nation as a whole, poverty remains a vexing problem even in an era of economic growth.
The suburbanization of poverty is readily apparent in communities like Antioch, Oakley, Rohnert Park and San Leandro, each of which has seen more than a 10 percentage point increase in its poverty rate since 2000. In contrast, 2017 poverty rates in San Francisco and San Jose were well below the levels seen in 2000. This trend is driven in part by the relative affordability of housing in these suburban cities, especially as housing costs have risen dramatically in gentrifying urban neighborhoods. Bay Area workers in poverty living in inland suburbs often face restricted economic opportunities due to excessive commute lengths and limited transportation options.
While the Bay Area has experienced increased poverty in inland cities, select neighborhoods close to the Bay also continue to experience high poverty rates. In San Mateo County, some neighborhoods in East Palo Alto and Redwood City have poverty rates over 50 percent, more than triple the county rate. Similarly, the East Bay cities of Oakland, Richmond and San Pablo all have neighborhoods in which the majority of residents are in poverty.
2013 Poverty Rates for Counties, Cities, and Neighborhoods
At just under 20 percent, the Bay Area ranks second-to-last among the top 10 most populous U.S. metro areas for its share of residents in households with incomes below 200 percent of the federal poverty limit. Despite this relatively strong performance, our region’s high cost of living presents significant challenges for low-income residents. Yet at the same time, other regions have much greater poverty challenges. Poverty rates are highest in the South, with Miami, Houston, Atlanta and Dallas comprising four of the five metros with the highest poverty rates. While the cost of living is substantially lower in Southern metro areas, evidently incomes have not kept pace for many households.
Metro Comparison for 2017 Poverty Rate
U.S Census Bureau: Decennial Census
U.S. Census Bureau: American Community Survey
Form C17002 (2006-2015)
Image: Flickr (Creative Commons license), Photographer: Alex Proimos
The U.S. Census Bureau defines a national poverty level (or household income) that varies by household size, number of children in a household, and age of householder. The national poverty level does not vary geographically even though cost of living is different across the United States. For the Bay Area, where cost of living is high and incomes are correspondingly high, an appropriate poverty level is 200% of poverty or twice the national poverty level, consistent with what was used for past equity work at MTC and ABAG. For comparison, however, both the national and 200% poverty levels are presented. For Vital Signs, the poverty rate is defined as the number of people (including children) living below twice the poverty level divided by the number of people for whom poverty status is determined. Poverty rates do not include unrelated individuals below 15 years old or people who live in the following: institutionalized group quarters, college dormitories, military barracks, and situations without conventional housing. The household income definitions for poverty change each year to reflect inflation. The official poverty definition uses money income before taxes and does not include capital gains or noncash benefits (such as public housing, Medicaid, and food stamps). For the national poverty level definitions by year, see: https://www.census.gov/hhes/www/poverty/data/threshld/index.html For an explanation on how the Census Bureau measures poverty, see: https://www.census.gov/hhes/www/poverty/about/overview/measure.html For the American Community Survey datasets, 1-year data was used for region, county, and metro areas whereas 5-year rolling average data was used for city and census tract. To be consistent across metropolitan areas, the poverty definition for non-Bay Area metros is twice the national poverty level. Data were not adjusted for varying income and cost of living levels across the metropolitan areas.