TRENTON--Despite being one of the nation's most affluent states, New Jersey is home to close to 200,000 families that have a working adult but still make too little in pay and benefits to adequately support themselves, a new study has found.

The study by Rutgers Center for Women and Work and New Jersey Policy Perspective, Climbing the Ladder: How to Invest in New Jersey's Working Families, found that despite having an adult breadwinner, one in five working families in the state is low-income, earning less than 200 percent of the federal poverty threshold. The number of low-income working families in the state has climbed by 16 percent since 2000, the study found. In all, these families include about 750,000 mothers, fathers and children.

These low-income working families are twice as likely as the rest of the state to be headed by someone who lacks a high school diploma, making them unprepared to move into many family-supporting jobs.

"New Jersey is a tale of two states," said Eileen Appelbaum, director of the Center for Women and Work at Rutgers. "On the one hand, we have a large number of highly educated members of the workforce who are doing well. But this report makes clear that there are also hundreds of thousands of working adults in the state who lack the skills, training and opportunity to adequately support themselves."

"As the state faces short-sighted budget cuts, the message of this report is more important than ever," said Jon Shure, president of NJPP. "This is wake-up call that says we need to invest, not cut, to build a secure future and a prosperous state."

The report analyzes a range of state policies and programs geared to assist low-income workers and finds major problems in the education, economic development and workforce training sector, as well as policies regarding worker supports, such as the minimum wage.

Among its key recommendations, the report calls for:

• Increasing the state minimum wage to roughly half of the average state wage, or $8.50 an hour, and automatically adjusting it yearly to preserve purchasing power.
• Adopting family leave insurance, paid for by workers' premiums, to give low income families flexibility to deal with emergencies.
• Restoring eligibility for New Jersey FamilyCare health coverage to parents earning up to 200 percent of the federal poverty threshold.
• Expanding eligibility for state-subsidized childcare and providing adequate funding to eliminate the waiting list for such assistance.
• Increasing spending for adult education courses to meet the enormous need.
• Setting a state goal to help welfare recipients not just find work but to establish economic self-sufficiency.
• Redirect funds to make higher education, particularly county colleges, more affordable and accessible to low-income working adults.

Some of the report's recommendations can be accomplished through better policies and administration. In other cases, new investments are critically needed to help low-wage workers build their skills. Such investments will pay enormous dividends as the state's workforce becomes better prepared to fill jobs in the new economy.

The report identifies as "low-income" a family of four that earned less than $39,942 in 2005, which was twice the federal poverty income threshold. The report uses that key definition in recognition that the federal poverty income threshold is not a realistic measure of the income needed to support a family. The Economic Policy Institute has calculated the actual costs of living in New Jersey and concluded that a family of four requires income ranging from $49,572 to $57,144 to be self-sufficient, depending on where in the state it lives.

The report was released by the Rutgers Center for Women and Work and New Jersey Policy Perspective, with support from the Working Poor Families Project, a national initiative supported by the Annie E. Casey, Ford, Joyce and Mott Foundations. The Working Poor Families Project examines state policies that affect low-income working families and recommends changes to strengthen those policies and create more economic opportunity. For more information, visit www.workingpoorfamilies.org. The New Jersey report is available at www.njpp.org or www.cww.rutgers.edu.

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TAX REFORM

WORK & WAGES

BUDGET & FISCAL POLICY

TRANSIT ISSUES

ECONOMIC DEVELOPMENT

VOTING & GOVT REFORM

© 2008 New Jersey Policy Perspective