Cato's Project on Poverty and Inequality in California: Final Report

COVID-19 has been a tragedy for California. More than 4 million Californians have contracted the disease, and over 64,000 have died from it. And beyond the cost of illness and death, the pandemic and the state’s actions to contain it have devastated California’s economy. Low-income and minority Californians in particular have felt the brunt of both the virus and the economic impact.Yet if COVID-19 exacerbated and exposed the state’s poverty problems, it was not the cause of them. Even before the pandemic, far too many Californians struggled to get by.This in a state that (even with the pandemic) has relatively strong economic growth, pockets of vast wealth, and an extensive social welfare system. California has the largest economy of any state. In fact, with a gross domestic product of nearly $3 trillion, if California were a country, its economy would be the world’s fifth largest, behind only the United States as a whole, China, Japan, and Germany. The state’s real gross domestic product grew 3.4 percent in 2019, and while its unemployment rate was slightly above the national average, it still was only around 4.1 percent. And the state is home to more than one million millionaires, including 189 of the United States’ 724 billionaires. Clearly there is a mismatch between the state’s growth and wealth and the struggles of many of its citizens.