Income Inequality in New Jersey: Gap Between Top 1 Percent and the Rest of the State is Large and Growing

FOR IMMEDIATE RELEASE: February 19, 2014
Contact: Jon Whiten, NJPP, or 917-655-3313 (cell)

Income Inequality in NJNew Jersey has experienced widening income inequality in recent decades, a trend that has accelerated tremendously in the past few years, according to a new 50-state report published by the Economic Policy Institute’s Economic Analysis and Research Network (EARN).

“This report makes one thing abundantly clear: Hard work and playing by the rules is not paying off for most of us,” said Gordon MacInnes, president of New Jersey Policy Perspective. “This is another important example illustrating the hollowing out of New Jersey’s middle class and the shrinking opportunities for striving residents who want to move into the middle class.”

The Increasingly Unequal States of America: Income Inequality by State, by Estelle Sommeiller and Mark Price, features a state-level analysis of income trends from 1917-2011.

The key findings for New Jersey:

Before the recession

• On average, income in New Jersey grew 62.6 percent between 1979 and 2007, with the top 1 percent had a disproportionate share – 40.3 percent – of that growth.

• The income growth of New Jersey’s top 1 percent during that time was 264.7 percent, the fifth-highest growth in the nation and more than six times higher than the 41.3 growth in income for New Jersey’s bottom 99 percent.

During/after the recession

• New Jersey was one of 17 states where all income gains during a time of supposed economic recovery (between 2009 and 2011) have gone to the 1 percent. From 2009 to 2011, income has grown by 9.4 percent for that group while it has shrunk by 0.9 percent for the rest of the state.

• When you add the recent years’ data, the lopsided income growth continues, with the top 1 percent seeing income growth of 175.8 percent from 1979 to 2011, and the rest of the state seeing meager income growth of 20.2 percent. During this time, the top 1 percent had nearly half (47.9 percent) of all income growth in New Jersey.

• Due to this extended period of lopsided income growth, the share of all income held by the top 1 percent in recent years has approached historical highs not seen since the late 1920s.

• In 2011, New Jersey had the 10th-highest income gap between the top 1 percent and the rest of the state. The average income for the top 1 percent, at $1.3 million, was 23.9 times the average income for the bottom 99 percent, $54,864.

“The levels of inequality we are seeing across the country provide more proof that the economy is not working for the vast majority of Americans and has not for decades,” said Price, an economist at Pennsylvania’s Keystone Research Center. “It is unconscionable that most of America’s families have shared in so little of the country’s prosperity over the last several decades.”

Despite recent comments from New Jersey’s political leaders that suggest income inequality is merely a byproduct of the American ideals of hard work and capitalism, this study adds to the volumes of work that show the opposite. In fact, inequality in New Jersey and the nation declined for nearly half the 20th century. While the state’s top 1 percent held 22.9 percent of the income in 1928, by 1979 their share had dropped to 9.5 percent, before rising again to above 20 percent in the 2000s.

“The fact that inequality in the United States declined for over four decades between the 1940s and the 1970s shows that there is nothing inevitable about the extreme levels of inequality we are currently seeing,” said Sommeiller, a socio-economist at the Institute for Research in Economic and Social Sciences in Greater Paris, France.


  1. Penury for us, extravagance for ‘them’…….$400/gal for gas to Afghanastan,…..unreal

  2. Here are 6 anti-democratic problems in the US:

    1. the federal executive is not selected by one-person-one-vote (far from it)
    2. voting in federal Senate is not weighted by population (68% of the population gets 32% of the vote)
    3. local minorities never get representation in federal House (US needs multi-member districts, not gerrymandered single-member districts)
    4. creation of legal tender is a privatized monopoly, at interest (the Revolutionary War did not get Americans their public scrip back)
    5. 90% of the money that debtors are charged for never existed (fractional reserve allocates credit from principal that never existed)
    6. creditors do not want the national debt paid off (the lien on taxpayers’ future income and assets is rehypothecated)

    Until John and Jane Q Public have more political equality (problems 1-3), how can they fix the economic inequality (problems 4-6)? Your thoughts?

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