Personal tools

Skip to content. | Skip to navigation

You are here: Home Newsroom Our Ideas Themes in the News Archive August 2012 The High Cost of Poverty and Economic Inequality

The High Cost of Poverty and Economic Inequality

  • 08-24-2012
  • Bookmark and Share


Week of Aug. 20-24, 2012

As more than 6 million students return to California public schools, the specter of economic crisis continues to loom over the state. California is in its 43rd consecutive month of double-digit unemployment rate. (Before 2008, the state had not experienced any month of double-digit unemployment since 1983.) Nearly 2 million Californians are unemployed and another 2 million are only able to secure part-time work (Bureau of Labor Statistics).  Sustained labor market insecurity has led to higher rates of childhood poverty (PPIC). Nearly one in four California children and one in three of California’s Latino and African American children live in families with income below the federal poverty line ($23,050 for a family of four). 

How does living in poverty affect California’s students? How do these effects differ across California’s communities? Answers to these and other questions come from a new study by researchers at UCLA and Child Trends. The study looked at educational outcomes of poor children. It also examined regional and local cost-of-living differences not accounted for in the federal poverty threshold. "It is not enough to simply look at the associations between family income, family life, and children's academic outcomes; how income plays out in young children's lives is conditioned by how much it costs for a family to cover its basic needs—and what is left over thereafter," said Rashmita Mistry, UCLA professor and co-author of report (California Watch).

Geographic Variations in Cost of Living: Associations with Family and Child Well-Being sampled 17,000 first-graders from across the nation whose families earn less than the 2012 federal poverty line. Researchers found that first graders from poor families living in high cost-of-living areas had lower educational achievement than those living in low-cost areas. In areas where housing, food, transportation and health care cost more, there's less money left over for parents to spend on educational investments, like books, computers and other extracurricular programs.

This national study holds special significance for California, a high cost-of-living state with dramatic economic inequality in several metropolitan areas. A recent report from the Center for Housing Policy found that more than a third of California working households spends more than half of their income on housing—the highest rate in the nation. (The highly regarded Kids Count deems housing costs of more than 30% of family income as an indicator of economic stress.) Many of the most expensive metropolitan areas in the country are located in California, and these areas house large numbers of poor people. According to the Unites States Census Bureau, greater Los Angeles and the Bay Area have among the highest rates of income inequality in the nation.  

The report from UCLA and Child Trends adds to the growing push to change the way that poverty is counted. A measure of poverty based on geographic differences in cost of living would allow some additional low-income California families to qualify for support services and programs that they need. Other advocates, such as the Center for Community Economic Development, argue that the federal poverty line dramatically understates the level of income required to sustain families. They point out that a family of four needs to earn more than $60,000 in areas like Los Angeles and Oakland to meet children’s basic needs.

In addition to encouraging a reconsideration of how to measure poverty, the report’s findings remind us to think about the dynamic relationship between education and social policy.  The six million students entering California schools this year need well-equipped and appropriately sized classrooms, relevant and challenging curriculum, and highly trained and caring teachers.  They also need the family stability and support that are afforded through decent paying jobs.  While it will not be cheap or easy for California to ensure that these needs are met, the costs of not doing so are far higher. 


Document Actions
Weekly Themes In The News

Each Friday “Themes in the News” explores one of the current week’s “breaking news” topics—selected by IDEA staff and its partners—for summary and reflection.   Hyperlinks of the news stories, which are cited, allow readers to explore the theme on their own.