Census Data: As New Jersey’s Economy Improves, Too Many Families Are Being Left Behind

“New Jersey’s economy as a whole is slowly coming along in its lagging crawl out of the Great Recession. That’s good news. But for too many New Jersey families, economic opportunity remains out of reach,” said Jon Whiten, Vice President of New Jersey Policy Perspective. “While household incomes are up and the number of New Jerseyans living in poverty is dropping, both of these key measures of well-being are worse than they were prior to the recession. And having so many residents lacking basic economic security is a huge drag on New Jersey’s economy and quality of life.”

The latest data from the Census confirm the urgent need for New Jersey’s federal lawmakers to work to help prevent working families from falling through the cracks and instead help these families climb into the middle class. Federal investments in health coverage, food assistance, affordable homes, public transit, higher education and more must – at the very least – be maintained, not slashed as current plans from the House leadership and Trump administration propose.

And while federal lawmakers are facing an urgent need to defend gains we’ve made together, state policymakers are confronting a once-in-a-generation opportunity to turn the tide next year, when a new governor and new legislature will convene and – we hope – set their sights on boosting economic opportunities for all New Jerseyans and growing broadly shared prosperity.

Key findings from the 2016 American Community Survey data:

New Jersey’s median household income increased significantly from 2015 to 2016, rising by an inflation-adjusted 4.1 percent to $76,126. But the state still hasn’t gotten back to pre-recession levels; in fact, New Jersey’s median household income, after adjusting for inflation, remains 3 percent – or about $2,300 – lower than it was in 2008.

What’s more, it’s clear that the gains in median income are not being equally shared among all New Jerseyans. The state’s level of income inequality dropped by 3.9 percent in 2016 but remains at an historic high. And as the Census data on poverty makes abundantly clear, far too many New Jerseyans remain left behind by the state’s nascent economic recovery.

New Jersey’s official poverty rate dropped to 10.4 percent, from 10.8 percent in 2015, but it remains far higher (21 percent, in fact) than the poverty rate in 2007. The 916,000 New Jerseyans living below this level are trying to survive on hardly anything: the federal poverty threshold is, for example, $19,318 for a family of three and $24,339 for a family of four.

But the federal poverty level is an inadequate tool – particularly in high-cost states like New Jersey, since it doesn’t adjust for the cost of living. It’s irrational to think that a family of four can get by in the Garden State on less than $25,000 a year.

A more accurate measure of true hardship in New Jersey – the supplemental poverty measure, which factors both for additional costs like expensive housing or health care and additional  benefits like tax credits or food assistance – rose slightly in 2016, to 15.3 percent from 15.1 percent. (Note: the 2016 rate is a three-year average of 2014-2016; the 2015 rate is a three-year average of 2013-2015.) New Jersey was one of 14 states where this measure rose, and now has the 9th highest supplemental poverty rate of all states.

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Yet another way to account for struggling families in the Garden State is to measure 200 percent of the federal poverty level, which is at about $48,700 in earnings a year for a family of four. Far too many New Jerseyans – 2.1 million, or about 1 of every 4 residents – continue to live below this level. In 2016, the share dropped to 23.8 percent, from 24.7 percent in 2015. But this more reliable metric is still 14 percent higher than it was in 2007.

Child poverty also dropped slightly – to 14.6 percent from 15.6 percent – but remains significantly higher (26 percent) than it was in 2007.

And due to longstanding and significant structural barriers to opportunity, New Jerseyans of color continue to experience significantly higher levels of poverty than others.

Poverty among African Americans fell to 17.4 percent from 18.6 percent; and among Hispanics and Latinos of any race poverty dropped to 18.6 percent from 20.2 percent. These rates are more than double the poverty rate among whites, which rose to 8.5 percent from 8.2 percent. Among Asians, poverty rose dropped to 6.8 percent from 7.1 percent. These rates are all higher than before the recession (in 2007 the poverty rates were 16.9 percent for African Americans, 16 percent for Hispanics and Latinos, 6 percent for whites and 6.3 percent for Asians).

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Poverty among women also remains higher than poverty among men. For women, the rate of poverty dropped to 11.4 percent from 11.7 percent. Among men, the poverty rate dropped to 9.4 percent from 9.8 percent. For both groups, the poverty rate is higher than it was in 2007, when it was 9.7 percent for women and 7.3 percent for men.

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