NJPP: Improving Economy Leaves Many Behind

TRENTON, NJ (September 27, 2019) –  Last year, 832,133 New Jerseyans lived in poverty and struggled to make ends meet, according to new data released yesterday from the U.S. Census Bureau. Residents across the state still face barriers that prevent them from thriving, such as a lack of access to affordable higher education, reliable public transportation, and affordable homes.

While the state’s unemployment rate continues to decline, far too many New Jerseyans are being left out of the state’s economic recovery. The 2018 poverty rate (less than $25,100 a year for a family of four) of 9.5 percent is still higher than New Jersey’s pre-recession poverty rate of 8.7 percent in 2008. Poverty strikes harder for households that have children. In 2018, 13.5 percent of kids in New Jersey, lived in homes that struggled to afford basic needs. This is down from the 2017 child poverty rate of 13.8 percent, but still higher than the pre-recession child poverty rate of 12.1 percent in 2008.

“New Jersey’s economy continues to improve, but not all residents are benefitting from this progress,” said Brandon McKoy, President of New Jersey Policy Perspective (NJPP). “New Jersey remains a tale of two states, as household incomes steadily increase while poverty rates remain higher than pre-Recession levels. Far too many New Jersey families still struggle to pay for basic expenses like food and childcare; more can and must be done to ensure every single New Jerseyan has the opportunity to live a safe and healthy life.”

The new Census data shows that even though the state is growing in important ways, New Jersey’s families are still dealing with harmfully high rates of poverty and widespread income inequality:

  • New Jersey’s poverty rate is 3.6 percentage points lower than the US poverty rate (13.1 percent), and is the 5th lowest poverty rate in the country. 
  • Due to New Jersey’s higher cost of living, measuring poverty using the 200% Federal Poverty Level statistic ($50,200 a year for a family of four) is more appropriate, and shows that 22 percent of New Jerseyans live in real poverty, a total of 1.9 million. This rate is down from 22.9 percent in 2017.
  • The state poverty rate (9.5 percent) declined by 0.5 percentage points over the last year and is at its lowest since 2009, when it was 9.4 percent.
  • The state’s median household income of $81,740 is up from the 2017 figure of $80,088 and is largely similar to both 2017 and 2008, meaning that since the Great Recession  there has been little positive movement in raising middle class living standards for the average New Jerseyan.
  • 4.2 percent of New Jerseyans live in extreme poverty, which means they live below less than half of the poverty line — or about $12,550 a year for a family of four.

The data also show that poverty continues to hit some groups harder:

  • New Jerseyans of color face significant barriers in our state due to housing segregation and broader discrimination. The result is that they are more likely to struggle economically than white New Jerseyans.
  • 16.2 percent of Black New Jerseyans live below the official poverty line ($25,100 for a family of 4) compared with 5.5 percent of whites.
  • 17.1 percent of Latinx and 7.2 percent of Asian Americans live in poverty. This means far too many New Jerseyans of color aren’t sharing in the state’s economic gains or able to fully contribute to the economy and health of their communities.
  • Women face higher poverty rates than men: 10.5 percent compared to 8.4 percent, respectively.

“Lawmakers must prioritize policies that benefit low-income workers, communities of color, and impoverished New Jerseyans who face barriers to success,” McKoy added. “Until we can ensure all New Jerseyans are able to safely and reliably make ends meet, our economy will continue to have trouble growing in a healthy manner.”

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