Fewer Valley people are in ‘poverty.’ But low wages mean many still can’t make ends meet

The number of people considered by the federal government to be in “poverty” in Fresno County and much of the central San Joaquin Valley last year was lower than it was in 2010. But Valley counties continue to be plagued by higher rates of poverty than most of the rest of California.

At the same time, the median household income in Fresno County last year was among the 10 lowest in California – fully 30% lower than the median income statewide, according to the latest income and poverty data released in late September by the U.S. Census Bureau.

The Census Bureau’s 2018 American Community Survey poverty measure, reporting figures for California’s 40 most populous counties, estimated that almost 210,000 Fresno County residents – about 21.5% of those counties – had incomes that fell below poverty level. That was the fifth highest rate in the state, behind Imperial, Tulare, Merced and Yolo counties, and just ahead of Humboldt, Madera, Kern and Kings counties.

The figures are also significantly lower than 2010, when Fresno County’s estimated poverty rate of 26.8% was the highest in the state and nearly 25,000 people were below the poverty level. The 2018 federal poverty threshold for an individual under the age of 65 was $13,064 in annual income. For a family of four, including two children under 18, the 2018 poverty threshold was calculated at $25,465 in annual income.

The number of people in poverty, and the poverty rates, also fell in three out of four neighboring Valley counties. In Merced County, the percentage of residents in poverty fell by a full percentage point, from 23% in 2010 to 22% last year, but the sheer number of people below the poverty level grew by almost 1,000 during the eight-year span.

Across Fresno, Kings, Madera, Merced and Tulare counties, the number of people in poverty under the federal threshold was estimated at more than 430,000. Eight years earlier, about 472,000 were at or under the official poverty threshold. Statewide, nearly 5 million people were in poverty, but about 1.5 million more Californians were considered by the Census Bureau to be “in proximity to poverty” because their income was less than 125 percent of the poverty threshold.

In Fresno County, the median household income – the midpoint at which half of households make more and half make less – was estimated by the Census Bureau at $52,629 per year in 2018. That’s the ninth lowest among the 40 counties covered in the Census Bureau data, and about 30% less than the statewide median income of $75,277. The national median was estimated at just under $62,000 in 2018.

Efforts to improve

In the Valley, both the poverty rate and the number of people in poverty, as well as the relatively low median income, are longstanding concerns in a region that relies heavily on agriculture. It’s also where the most numerous jobs available require the least education and are also among the lowest-paying: farm labor, food service/hospitality, retail, and personal in-home care aides.

Community leaders including Fresno Mayor Lee Brand have talked about diversifying the area’s economy by encouraging companies and industries that provide better-paying jobs for residents. While there have been successes, such as the opening in 2018 of new e-commerce distribution warehouses by Amazon and Ulta Beauty in Fresno, most of the job openings forecast over the next seven years will continue to be in the lowest-paying occupations. Those come even as the state’s minimum wage, currently $12 per hour for companies with more than 25 employees, will rise to $15 per hour by 2023.

“We as a city and a region have spent most of the past 50 years lamenting the reality of systemic poverty and its effects,” said Jake Soberal, co-CEO of Bitwise Industries, a hub for technology entrepreneurs in downtown Fresno. “Collectively, as a community, we need to try new things in terms of creating on-ramps and opportunities” for people in the region – especially students – to find their way into better-paying industries such as technology without having to leave the area.

One of Bitwise’s programs is Geekwise Academy, offering different levels of classes for people to learn about technology, writing code and landing apprenticeships in the industry. Since its establishment in 2013, about 4,000 people have taken Geekwise Academy classes, Soberal said.

“We know of those exiting the program, about 80% have earned technological employment,” he said. “And they’re a good representation of our community – about 50% underrepresented minorities, about 50% female, and about 20% first-generation Americans.”

“On average, people enter our program making just under $20,000 a year and exit making just over $60,000,” Soberal added.

Bitwise, however, is far from the only innovative education program striving to provide other avenues for students. “There’s a lot out there, and some of those predate Geekwise,” Soberal said. He cited Fresno State President Joseph Castro’s efforts to broaden the university’s enrollment and technology education, as well as CART, a technology-focused high school for Fresno and Clovis students; and the Fresno Unified School District’s Duncan Polytechnical High School, Design Science Middle College High School and Philip J. Patino School of Entrepreneurship.

“These are thinking differently about how we capture students’ attention (and) serve people who don’t necessarily perform well in a traditional classroom,” Soberal said. “If we continue to deliver solutions that work in Beverly Hills and lament that they don’t work in Fresno, we’ve only got ourselves to blame.”

An unrealistic measurement

Researchers and advocates argue that the federal poverty threshold is not a realistic measure of a person’s or family’s ability to make ends meet.

“The federal government’s official poverty measure vastly understates poverty,” authors Betsy Baum Block, Henry Gascon and Peter Manzo wrote in a United Way of California report published earlier this year. They said the federal threshold’s flaws include that “it is primarily based on the cost of food, and in the decades since it was created, the costs of housing, transportation, child care, health care and other family necessities have risen far more rapidly than food costs.” Additionally, they wrote, it does not consider regional variations in living costs.

“As a result, the true extent of families contending with deprivation is hidden,” their report states. “Many of these hidden poor find they earn to much to qualify for most public services, yet still struggle to meet their most basic needs, especially as the costs of housing, health care, and other necessities continue to rise faster than wages.”

Alternatively, Amy Glasmeier, a professor of economic geography and regional planning at the Massachusetts Institute of Technology, created a “living wage calculator” in 2004 to provide a more realistic accounting of costs for basic needs. In its 2018 edition, the MIT Living Wage Calculator says it is “a ‘step up’ from poverty as measured by the poverty thresholds … that accounts for only the basic needs of a family.”

It does not, however, “budget funds for pre-prepared meals or those eaten in restaurants,” MIT authors said. “It does not include money for entertainment nor does it allocate leisure time for unpaid vacation or holidays. Lastly, it does not provide a financial means for planning for the future” such as a home purchase or retirement savings. “In light of this fact, the living wage is perhaps better defined as a minimum subsistence wage for persons living in the United States.”

According to the Living Wage Calculator, a Fresno County family of four – two working adults and two children – would need to have a household income of more than $71,000 a year just to provide for their basic expenses: food, child care, health care, transportation, taxes and other needs. To cover that, the calculator estimates that each of the family’s two adults, working full-time, would need to earn an hourly wage of $17.19 – about 43% more than the state’s current minimum wage.

Fresno has the benefit of having some of the lowest average market-rate apartment rent costs in the state. By contrast, a family of four in San Francisco – the city with the highest average apartment rents in California – would require an annual income of more than $101,000 to meet what the MIT calculator indicates as a living wage, with each of the two adults making $24.30 per hour, more than double the current minimum wage.