High housing prices + high gas prices + high utility prices=worst poverty rate in nation

Voices out of Sacramento may crow about about the booming California economy and how it supports a flurry of new taxes, entitlements, and regulations. But the Census Bureau presents a more sobering and saddening picture: California has the worst poverty rate in the country. By a lot.

The "functional" poverty rate, according to the Census Bureau, in the state is 18.2%. That rate is 300% higher than Iowa's (at 6.8%).

It gets worse: when you calculate in what The Public Policy Institute calls "near poverty," you can add in another 18%.

Which means that, as Dan Walters of Cal Matters notes, "more than 35% of Californians, perhaps 15 million human beings, are living in severe economic distress."

The root of this problem isn't Californians' incomes, per se. California's median household income is in fact above the national median of $63,179. But the *cost* of living in the Golden State, driven by deeply flawed government policies that intrude into nearly every corner of residents' lives, is completely out of whack. Walters notes the following:

* A multimillion unit shortage of residential drives makes California housing costs the highest in the nation.

* Californians pay the second-highest prices for gasoline--more than a dollar more per gallon than other states--costing residents an extra $15 billion (no typo) a year to drive here.

* Californians' residential power rates are 52% above the national average, making average residential power bills 25% higher than they were in 2010 (currently $1,247 average per year). And those high power rates have negative downstream effect, making almost everything people buy in California (food, clothing, etc.) more expensive as businesses pass their higher costs onto the consumer.

Walters concludes: "Feeble efforts to raise family incomes, such as increasing the state's minimum wage or creating an earned income tax credit, or trying to cap rent increases will do little or nothing to lower California's poverty rate."

Free-market economists would point out that the root of California's high cost of living is the expansive array of anti-free market government policies which inflate prices in many sectors and drive even people with good jobs into poverty. And that the solution to those skyrocketing costs is not to increase costs (taxes, fees), but rather to unleash the constrained market forces that will increase competition and drive down prices for all, especially those most burdened by our current high cost of living.

Simon Gilbert