California pilots universal basic income as state ranks No. 1 in poverty

California is piloting its first state-led universal basic income program as new analysis finds the state has the highest poverty rate in the nation. While state Democrats use figures like these to demonstrate the need for more social spending, critics say these programs ultimately make California more expensive and increase poverty in the long run.

The two “Guaranteed Income Pilot Programs’ will provide 150 former foster youth in Ventura County with $1,000 per month and another 150 in San Francisco with $1,200 per month to “disrupt poverty, advance equity, and support the basic needs of recipients.”

“Guaranteed income programs help level the playing field and will give these former foster youth the support and resources they need to pursue their California dream,” said California governor Gavin Newsom.

In a new report from the Public Policy Institute of California, researchers found that 31.3% of Californians are in poverty or near poverty — that is, with income up to one and a half times the California Poverty Measure poverty line, a cost-of-living adjusted data point derived from the Census Bureau’s Supplemental Poverty Measure. 13.2% of all Californians are below the CPM, while that number rises to 15.5% in Los Angeles County, 15% in San Diego County, and 14.5% in Orange County, the counties with the highest poverty rates in the state. At 13.2%, California has the highest poverty rate in the nation.

In its analysis, PPIC claims there would be an 8.4 percentage point increase in poverty statewide without CalFresh food stamps the federal earned income tax credit, the federal child tax credit, housing subsidies, Social Security income and state supplementary payments, and the California earned income tax credit preventing poverty increases of 3%, 1.1%, 0.8%, 1.1%, 1.1%, and 0.2% respectively.

“In early 2023, about 3.2 million more Californians (8.4%) would have been in poverty without safety net programs,” wrote the PPIC report authors.

Critics, meanwhile, point to the state’s anti-poverty measures as driving much of the poverty in the state in the first place.

“It's easy to predict how California's political establishment will respond to this latest bad news: As always, they'll use the report as proof that what's needed is a new round of 'anti-poverty' programs that will, in fact, make California more expensive, not less, that will make poverty worse, not better,” said California Policy Center president Will Swaim to The Center Square. “In just the last few days, we can see this happening in real time.”

Swaim brought up the immediate effect of Newsom raising the minimum wage for fast food workers to $20 per hour — “as predicted, fast-food chains announced they’ll raise menu prices and layoff workers.” He then pointed to the new bill raising the minimum wage for healthcare workers to $25 per hour, the $4 billion cost of which “will come from a budget already unable to pay for existing projects. That will lead to cuts in other anti-poverty programs and calls for higher taxes — all of which will make California more expensive for working people.” Lastly, Swaim claimed California leaders could “immediately” cut the state’s “highest-in-the-nation” gasoline taxes, which he says hurts the poor, who more often cannot afford to live close to work, the most.