Who are the ‘hidden poor?’

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According to the latest data from the U.S. Census, California has the highest poverty rate of any state in the country when cost of living is taken into account.

Chair of UCLA’s Dept. of Community Health Sciences, Steven Wallace, calls this population California’s “hidden poor.”

He has found that a growing number of elderly men and women in California have an income that is above the official Federal Poverty Level, yet below what they need to maintain a basic quality of life or, simply, to make ends meet.

In the city of Los Angeles, an estimated 200,000 older adults currently fall within this category. Latino, African-American, and Asian older adults who live alone or with only a spouse had the highest rates of being among the “hidden poor.”

Producer Ruxandra Guidi spoke with Wallace about his research, about the need for an “Elder Index,” and what it all means for Los Angeles as our elderly population grows.

RG: What is wrong with the Federal Poverty Level? Is it obsolete?

SW: The problem with the Federal Poverty Level is that it obscures the fact that there are a lot of older adults whom we call the “hidden poor,” because they don’t show up in official statistics, but they don’t have the resources they need to live in a high-cost area like Los Angeles or San Francisco or San Diego or any of the urban counties. So, for that group that lives below the federal poverty line, they don’t have enough money even to pay rent.

For the group that’s more or less, say, between the federal poverty line and twice the poverty line, they’re still not able to cover rent and basic necessities. And when you look particularly at ethnic and racial minorities — African-Americans and Latinos – about half of them fall under what we call the Elder Index — the actual cost of food, and housing, and transportation, and health care.

RG: How do you see this trending in the next 20-30 years, when our elderly population will be considerably bigger?

SW: Gerontologists and academics have been talking for years now about the Baby Boom generation which is now entering old age, and everybody who’s going to be elderly in the next 20-30 years is already living here. So, it’s not a guessing game. Birth rates can go up and down depending on the economy and all sorts of things that are hard to predict. But the number of older adults living in California in the next 20-30 years is pretty well known and it’s not going to change. To the extent that California continues to rely on a large low-income labor force for restaurants, for service sector, for agriculture — those are populations that, as they age, they are going to be in no better or worse economic shape than the current generation.

RG: What is being done to try to address the basic infrastructure needs of that population?

RG: Housing right now is a big issue. There’s a lot of discussion right now about trying to increase low income housing. In the Thirties we built millions of units of public housing around the country. In the Sixties, there was Section 202 which built
tons and tons of senior buildings. And nowadays it’s very hard to get the financing, even if you’re a non-profit organization that wants to build low income housing, subsidized housing, senior housing. So, something more needs to be done to increase the supply.

RG: California’s hidden poor are still predominantly non-Hispanic whites. Can you talk about how this will change in the future?

SW: In 40 years, the largest group will be Latinos. When you think of poverty nationally, you think of a person of color. But, actually, the majority of people who are under the federal poverty line nationally are white. The risk of being poor is dramatically higher if you’re African-American or Latino or Asian, too, in California. And that’s part of the immigrant group that has come, worked for a number of years; maybe they didn’t get a pension; maybe they’re living with family members because they don’t have the means to live independently.

The other problem that will be coming up with the Baby Boomer generation is that we have shifted away from “defined benefit pensions” towards “defined contributions.” Usually, when you talk to a retirement or investment advisor, they say, “Well, on average people live until 80. So if you’re retiring at 65, you should make sure you have 15 years of income.” Averages mean that, by and large, half the people live longer than that, so there’s a big concern about what happens 20 years from now when people have spent out their savings. That’s another group that I would say are the “prospective hidden poor” people: They are retiring, are middle-class, and have enough money to make ends meet. But god forbid they continue living longer. And we’re living longer every year, so when they reach 90 and have no money and no pension, they’ll be in this hidden poor group as well.