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Poverty rate 11.3 percent in affluent Bay Area

New data from Silicon Valley Institute for Regional Studies

April 1, 2015 – More than one in ten Bay Area residents are living in poverty in spite of it being among the world’s wealthiest regions, according to a new brief released today by the Joint Venture Silicon Valley Institute for Regional Studies.

The “Poverty in the Bay Area” study finds that 829,547 people living in the Bay Area, or 11.3 percent, were impoverished in 2013, just below the historical peak of 12 percent and still much higher than the average rate of around 9 percent.

Children are the hardest hit, the study found, with 13.8 percent lacking the resources for such basic needs as food, clothing and shelter.

Prepared by economist Jon Haveman and Joint Venture vice president Rachel Massaro, the brief bases its estimates on the federal poverty annual income thresholds, ranging from $11,490 for a one-person household to $23,550 for a family of four, to $39,630+ for a household of eight or more.

"Perhaps the most surprising and disconcerting finding is the poverty status of children,” said Jon Haveman. “The Bay Area’s children are the Bay Area’s future. Currently, 1 in 7 of them is handicapped by their economic status, even more if you look at just the youngest, those less than 6 years of age.”

“It’s important that we have a better understanding of how poverty is changing in our region over time,” said Rachel Massaro, senior research associate for the Institute. “Poverty is an integral part of our persistent growth issues like high housing costs and income inequality.”

Still, the report notes, poverty in the Bay Area was more than 4 percentage points below the rates in California as a whole (17 percent) or the nation (15.9 percent).

“Although low relative to other geographies, the Bay Area poverty rate is high in comparison to historical averages in the region,” the study notes. “During the Great Recession, poverty levels reached a peak of just under 12 percent and have been declining over the last two years.”

Federal poverty statistics underestimate economic hardship in the region, notes the brief. Alternative mea­sures indicate significantly higher proportions of the population as living in poverty.

By county, poverty rates range from a high of 13.8 percent in San Francisco to a low of 7.8 percent in San Mateo County, says the brief. San Francisco’s Tenderloin has a poverty rate of 50.6 percent while the rate in the outskirts of Vacaville is nearly zero.

“With rents in some parts of the Bay Area 185 percent higher, home prices up to 250 percent higher, and the cost of goods and services 6 percent higher than in the United States as a whole,” says the brief, “the ‘cost of living’ in the Bay Area is undoubtedly different. As such, the poverty rate in the Bay Area could be as much as three or four percentage points higher, putting poverty in the Bay Area on par with the state and nation.”

Figures and data tables, along with detailed annotations, data sources and resources, can be accessed at www.siliconvalleyindicators.org.

The complete brief is available for download as a PDF on the Joint Venture website.

About the Silicon Valley Institute for Regional Studies

The Silicon Valley Institute for Regional Studies provides research and analysis on a host of issues facing Silicon Valley’s economy and society. The Institute is housed within Joint Venture Silicon Valley. For more information, visit www.siliconvalleyindicators.org.

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