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Poverty and Inequality Definition: The local poverty rate provides an indication of the well-being of those at the bottom of the income distribution. The federal poverty rate measures the proportion of households in the region that are classified as living in poverty. Measures of the income distribution provide further evidence on disparities in income in the region. Why is it important? It is important to track measures of poverty and inequality to assess the extent of income dis- parities in the region, with an eye toward un- derstanding how well the local economy is per- forming for all of its citizens. How are we doing? In 2015, the Federal Poverty Rate for Redwood City was 9.8%. This is slightly higher than for San Mateo County as a whole (8.5%), but com- pares favorably to the Bay Area as a whole (10.8%), California as a whole (15.3%) or the nation (14.7%). The low rate of poverty in Red- wood City and the Bay Area as a whole is somewhat deceptive. A major shortcoming of the Federal Poverty Rate is that it does not take into consideration differences in the cost of liv- ing or in the share of housing in the house- hold budget across regions. Given that Red- wood City has a relatively high cost of living and of housing in particular, it is likely that the City’s poverty rate is significantly higher than indicated by the Federal Poverty Rate. Indeed, for the year 2011, the Public Policy Institute of California and Stanford attempted to adjust the San Mateo County poverty rate for these fac- tors. What it found was that in 2011, rather than 6.7% as indicated by the FPR, it was actually in excess of 18%. This suggests that poverty rates in Redwood City are likely significantly higher than 9.8%. With regard to child poverty, Redwood City has been experiencing an increase while the state and nation have been experiencing decreases. Measured child poverty in Redwood City, at 13.2%, is significantly higher than is overall poverty. This is very commonly the case. Figure 17:Poverty in Redwood City Income inequality in Redwood City is low rela- tive to the state and San Mateo County, but is approximately the same as in the United States as a whole. For much of the last 25 years, in- equality nationwide has been on the rise. This is especially true of the Bay Area, and has been true for Redwood City and San Mateo County for at least the last decade. 13