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California's poorest may finally be feeling rising economy

Volunteers pack up thousands of pounds of food as part of Rotary Club sponsored drive on Saturday at Second Harvest Food Bank in Riverside.
A food bank in Riverside, California.

Applications for cash welfare reached their lowest point in at least six years in 2016, which economists say might indicate California's poorest are finally feeling the effects of an improving economy. 

Last year, an average of about 250,000 Americans applied for assistance under Temporary Assistance for Needy Families (TANF), which is also known as welfare-to-work. About 13 percent of them were in California, where TANF is also known as CalWORKs.  

That rate was down from a spike of applications following the Great Recession. In 2010, the year after the recession ended, about 330,000 people per month applied for cash welfare in the U.S. 

Economic recovery at the lowest rungs has been slow, said Professor Gary Painter, director of public policy at USC's Sol Price Center for Social Innovation.

"The poorest parts of the population traditionally see the bumps last," Painter said. But the TANF application numbers "can clearly be correlated to a rising economy."

Princeton Professor Janet Currie, who heads the university's Center for Health and Wellbeing, said falling unemployment is an obvious explanation for the welfare numbers. 

"Moreover, many of the new jobs that are being created are in sectors like health care that are historically more heavily female," she said. Mothers (and their children) in poverty traditionally make up a large swath of the TANF rolls.

Those who work with California's poorest, however, say the numbers don't line up with what they're seeing on the ground. 

"No, not at all," said Vanessa Perez, associate director of Time for Change Foundation in San Bernardino, which runs a homeless shelter and programs for women and children in the Inland Empire. Perez said, as far as she can tell, the numbers of people living in extreme poverty have not gone down.

"If anything, it's increased," she said. "We've seen the demand for affordable housing, shelters increase in our area."

Those of their clients who are finding work are largely confined to seasonal and factory work, which is not keeping them fed and housed, she said.

USC's Painter said the increased demand for homelessness and poverty services are likely tied to California's cost of living. 

"People are navigating high housing costs by relying on food banks," he said. "That's why we're seeing an increased demand for services."

Painter said the TANF numbers may also be slightly misleading. Benefits under the program are time-limited and families who needed cash assistance during the recession may simply no longer be eligible for benefits, whether they need them or not.