Category: Explainer

New Jersey’s Marketplace Leads the U.S in Making Health Care Affordable

Posted on by Raymond Castro

 

But continued progress should not be taken for granted

 

To read a PDF version of this report, click here.

While the President and Congressional leadership have campaigned to undermine the Affordable Care Act (ACA), the health insurance Marketplace in New Jersey has provided a national example of progress. This is on top of the state’s Medicaid expansion, which – with the eighth highest enrollment rate in the nation – has provided health coverage for a half million residents and is now the primary source of funding for opioid addiction treatment in New Jersey.

Prior to the ACA, New Jersey already had enacted strong insurance regulations and consumer protections, requiring comprehensive benefits (then called “standard plans”) and protection for individuals with pre-existing conditions, for example. While these policies were commendable, the comprehensive and high-quality coverage they mandated was by and large unaffordable.[1]

The ACA came to the rescue by providing subsidies to reduce costs, establishing the individual mandate and providing funding for outreach. All those changes made the Marketplace much more attractive to healthier individuals, which has helped keep the premium costs down for everyone. Without these components, the Marketplace’s success would be threatened.

While the state’s marketplace – a federal website (healthcare.gov) that allows consumers to shop for insurance plans in New Jersey – is not perfect, state and federal leaders need to protect and improve it – not seek to extinguish it. The overwhelming majority (78 percent) of Americans want the Trump administration to make the current health care law work better, not make it fail and (maybe) replace it later.[2]

The most immediate concern is President Trump’s threat to cut $166 million in federal subsidies to New Jersey insurers to reduce cost sharing for 145,000 low-income New Jerseyans who purchase insurance in the individual market.[3] Without these subsidies, which average about $1,200 per person, insurers would likely increase premiums by 20 or even 30 percent, making insurance unaffordable for many New Jerseyans and increasing federal costs for higher premium subsidies that are triggered by reducing cost sharing reduction subsidies.[4] This is now a full-scale emergency because insurers must decide next month what their premium rates will be and if they will even stay in the marketplace.

New Jersey should join 17 other states in a federal lawsuit to challenge the Trump administration if it terminates these subsidies, now that a federal appeals court has ruled that such a challenge can indeed move forward. All of New Jersey’s bordering states (New York, Pennsylvania and Delaware) are part of the lawsuit, as are seven other states with Republican governors. In other words, there is no reason Gov. Christie shouldn’t join these efforts. His support might help avert a potential crisis and avoid the loss of desperately needed health care for many New Jerseyans.

In Congress, New Jersey’s bipartisan delegation that voted against hastily-drafted and ill-considered plans to repeal the ACA must continue to put partisan politics aside to do what is best for the health and well-being of New Jerseyans by supporting efforts to sustain federal funding of these subsidies and strongly opposing the President’s reckless and unsupportable strong-arm tactics to withhold them.

The Trump administration also needs to end its mixed signals about the individual mandate, which requires most Americans to purchase health insurance. The Internal Revenue Service must continue enforcing this critical mandate, which insures that healthy people – not just sick people ­– will buy coverage, helping to hold down the premiums for everyone.

It will also be critical that the Trump administration maintain outreach. It has already canceled a major outreach contract with an agency that had three sites that served most northern New Jersey communities. It was also reported recently that the administration has decided that it may not partner with outside groups, as the federal government has done for the last four years.

New Jersey Has Slowest Growth in Federal Marketplace Premiums

New Jersey had the nation’s slowest growth by far in federal Marketplace premiums between 2013 and 2017, according to new federal data. During this time, average premiums rose to $479 a month from $428, a 12 percent increase for an average of only 3 percent a year.[5] This is a far cry from the many double-digit annual increases before the ACA, and nearly nine times slower growth than the national average.

Adjusting for health care inflation during this time (5.6 percent annually[6]), there was a 2.6 percent annual decrease in New Jersey’s average premiums – amounting to about $144 million savings in 2017 alone in the Marketplace.[7] What’s more, 82 percent of New Jerseyans enrolled in the Marketplace received premium subsidies, which offset any premium increase for most consumers.[8] As a result of this slow growth in premiums, New Jersey fell from having the highest premiums in the nation in the federal marketplace to 21st in just four years.

These Marketplace savings were achieved in every New Jersey congressional district. There was very little difference in average savings in districts represented by Democrats ($12.3 million) and those represented by Republicans ($11.6 million). These savings mainly benefit consumers who pay the full cost of their insurance, as well as all taxpayers, because there was less need for federally-funded premium subsidies.

New Jersey’s Deductibles Are Far Lower Than in Other States

The ability to keep premiums down is especially impressive because, unlike most states, New Jersey also places a cap on the deductible that can be set by insurers to help reduce consumer out-of-pocket costs.[9]

On average, deductibles in the federal Marketplace in New Jersey are about $1,600, just 43 percent of the national average ($3,609).[10] (New Jersey also offers one plan that has no deductible.) While individuals in other states can face deductibles of up to $6,000, in New Jersey there is a $2,500 cap on nearly all marketplace plans. The only exceptions are “Bronze” plans, which have the highest cost sharing, but even that deductible is capped at $3,000 for a New Jersey individual. Only 12 percent of all New Jerseyans who have selected plans in the marketplace have opted for a Bronze plan, a rate that is 25 percent lower than the national average of 16 percent.

New Jersey’s Marketplace Is Stable

Opponents of the ACA contend that insurers are abandoning the Marketplace, leaving consumers with no coverage. While this is hardly true nationally – in fact, just one percent of all the nation’s counties are without at least one insurer (and most of them are sparsely populated rural areas) – it is especially not true in New Jersey, where all 21 counties have a choice of two (and next year, perhaps three) insurers.

While three out of New Jersey’s initial five Marketplace insurers did exit last year, one (Oscar) is reportedly likely to return next year. New Jersey has two insurers and 18 plans to choose from in the Marketplace this year. This includes Horizon, the largest insurer in the state and the only non-profit. Recently Standard and Poor’s maintained Horizon’s “A” credit and said its outlook was described as “stable.” In addition, New Jerseyans have a choice of five insurers outside the marketplace – an attractive option for consumers not eligible for subsidies.

Record Number of New Jerseyans Getting Coverage in Individual Insurance Market

Meanwhile, despite the threats emanating from Washington, enrollment in New Jersey’s individual insurance market continues to grow, according to new state data. In 2017’s first quarter (which reflects the open enrollment period), enrollment grew by 19 percent to 369,000 covered individuals (this includes about 265,000 individuals in the Marketplace and 104,000 who purchase insurance outside the Marketplace).[11] This impressive growth defied the Trump administration’s elimination of all advertising and other outreach in the last week of open enrollment and Gov. Christie’s refusal to establish a state-run marketplace that would have brought more than $100 million in federal funding to New Jersey.

This progress is even more remarkable considering that before the ACA, comprehensive plans for individuals were in a death spiral. From 1995 to 2013, enrollment decreased by 78 percent, leaving only 39,000 New Jerseyans who could afford coverage. Since the Marketplace started in 2014, enrollment has increased 840 percent.

Endnotes

[1] This became such a big problem that the state went so far as to enact a statute P.L. 2001, chapter 368 establishing bare bones policies (called “Basic and Essential”) which reduced the premiums by allowing modified community rating and providing more limited coverage which proved popular with consumers when sold with riders that provided more comprehensive coverage.

[2] Kaiser Family Foundation, Poll: Large Majority of the Public, Including Half of Republicans and Trump Supporters, Say the Administration Should Try to Make the Affordable Care Act Work, August 2017. http://www.kff.org/health-reform/press-release/poll-large-majority-of-the-public-including-half-of-republicans-and-trump-supporters-say-the-administration-should-try-to-make-the-affordable-care-act-work/

[3] Center on Budget and Policy Priorities, Interactive Map: Cost-Sharing Subsidies at Risk Under House GOP Health Bill, March 2017. https://www.cbpp.org/blog/interactive-map-cost-sharing-subsidies-at-risk-under-house-gop-health-bill

[4] American Academy of Actuaries, Cost-Sharing Reductions: What Are They And Why Do They Need To Be Funded?, July 2017. http://www.actuary.org/content/cost-sharing-reductions-what-are-they-and-why-do-they-need-be-funded-0

[5] U.S. Department of Health & Human Services, Office of The Assistant Secretary For Planning And Evaluation, Individual Market Premium Changes, 2017, https://aspe.hhs.gov/pdf-report/individual-market-premium-changes-2013-2017

[6] Centers for Medicare and Medicaid Services, NHE Summary including GDP, CY 1960-2015, (https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.html) and National Health Expenditure Projections 2016-2025 (https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/proj2016.pdf)

[7] Savings were likely also achieved outside the marketplace but no data was available.

[8] U.S. Department of Health & Human Services, Office of The Assistant Secretary For Planning And Evaluation, Compilation of State Data on the Affordable Care Act, December 2016. https://aspe.hhs.gov/compilation-state-data-affordable-care-act

[9] This report did not examine co-payments and co-insurance in New Jersey compared to other states

[10] Kaiser Family Foundation, Impact of Cost Sharing Reductions on Deductibles and Out-Of-Pocket Limits, May 2017 (http://www.kff.org/health-reform/issue-brief/impact-of-cost-sharing-reductions-on-deductibles-and-out-of-pocket-limits/) and NJPP analysis of healthcare.gov for New Jersey average premium

[11] New Jersey Department of Banking and Insurance, Market Summary, http://www.nj.gov/dobi/division_insurance/ihcseh/enroll/1q17ihcmarket.pdf

Policy Solutions for Low-Wage Working Families

Posted on by NJPP Staff

 

Last week, NJPP Vice President Jon Whiten joined a panel of experts to discuss the future or work, wages and labor with New Jersey Congressman Donald Norcross and his colleagues Mark DeSaulnier of California and Mark Pocan of Wisconsin. After briefly explaining the changing nature of the low-wage workforce, Whiten pointed to two key federal policy solutions to help boost low-paid working families: Raising the minimum wage to a more livable wage, and expanding the Earned Income Tax Credit to better help workers not raising children.

You can view the slide deck here.

Poorest New Jersey Children Continue to Suffer From Inadequate Assistance

Posted on by Raymond Castro

To read a PDF version of this report, click here.

NOTE: This is an update of NJPP’s February 2016 report, “Lost Opportunities for New Jersey’s Children,”
It’s now been 30 years since New Jersey last adjusted cash assistance to its poorest families for inflation, and as a result more and more of the children in those families are falling through this largely shredded safety net. New Jersey’s political leaders must act now to reverse this downward slide by improving assistance levels in WorkFirst New Jersey, called Temporary Assistance for Needy Families (TANF) at the federal level.

To do so, lawmakers should:

  • Increase TANF assistance by 30 percent over three years (this would also increase eligibility for Emergency Assistance)
  • In the fourth year, tie TANF assistance to inflation to ensure families don’t fall even further behind
  • Repeal the punitive policy that denies TANF cash assistance to babies of mothers already on TANF

These improvements were passed last year by the legislature but vetoed by Gov. Christie.

New Jersey’s TANF assistance is currently $424 a month for a family of three, unchanged since 1987. (It would be $932 a month if it had simply kept up with inflation.) This is just 30.7 percent of the estimated cost of a modest two-bedroom apartment (based on HUD’s fair market rents) – which explains why, when adjusted for housing costs, New Jersey’s TANF assistance is the 7th lowest of all states and D.C., below states like Texas, Oklahoma, Kentucky and Arizona.

New Jersey’s maximum TANF assistance is only 25 percent of the federal poverty level, which underestimates poverty in New Jersey because it does not take into account the high cost of living in the state. A more state-specific measure of living standards is updated each year by the state Department of Human Services: its most recent standard of $2,920 a month for a family of three is almost 700 percent higher than the maximum TANF benefit.

This meager TANF assistance doesn’t just decrease the benefits available for poor New Jersey families; it also means that far fewer poor families in the state are able to access TANF, since income eligibility levels are tied to benefit levels. As TANF standards have failed to keep up with rapidly increasing costs of living, more and more struggling families and kids have been left behind.

 

About 9 in 10 New Jersey children living in poverty did not receive any TANF support in 2015. In that year there were 302,000 children below the federal poverty level.

Even when child poverty increases, TANF does not respond accordingly. In fact, while the number of New Jersey kids living below the federal poverty level rose by 4 percent from 2010 to 2015, the number of children receiving TANF benefits decreased by 41 percent.

And the number of children receiving TANF assistance continues to drop at an alarming rate. As of February 2017, only 31,000 children remain in TANF. At this rate, TANF will essentially disappear as a safety net within a few years.

New research shows that deep poverty causes severe losses in brain development in children that can affect them for the rest of their lives. This is one of the main reasons why many states have recently increased their TANF levels.

Removing All Undocumented New Jerseyans Would Harm the State’s Economy

Posted on by Jon Whiten

To read a PDF version of this report, click here.

New Jersey’s economy would suffer a substantial blow if all of the United States’ 11.3 million undocumented immigrants – more than 7 million of whom are working – were removed from the country.

gdp-loss-undocumented-01

In fact, the loss to New Jersey’s Gross Domestic Product of 4.9 percent is the largest loss of any of the 50 states, topping immigrant-heavy states like California (4.7 percent loss), Texas (3.9 percent loss) and New York (3 percent loss), according to a new 50-state analysis by the Center for American Progress.[1]

The forced removal of these striving immigrants would cause New Jersey to lose $25.9 billion in annual economic activity. While this is not the largest dollar loss of any state (California tops the list at $103 billion), it is the largest when taken in context of the size of a state’s economy.

New Jersey’s workforce has the third-highest share of undocumented workers in the nation, at 7.4 percent – behind California (10.2 percent) and Texas (8.7 percent). But the loss of these workers’ contributions would be more keenly felt by New Jersey’s economy, in large part because there undocumented workers’ contributions to the economy are more diverse and felt in many higher-paid industries.

sector-gdp-loss-01For instance, New Jersey’s financial industry would lose an estimated 5.3 percent of its annual economic activity without undocumented workers – a far higher share than all other states (the next closest states are Connecticut with a 2.6 percent loss and New York with 2.3 percent).

That said, the loss to New Jersey’s economy from the removal of the undocumented workforce would be felt across industries.

These grim prospects serve as an important reminder of the unmistakable value that immigrants – both undocumented and documented – bring to New Jersey and to the state’s economy.

Without the economic contributions of immigrants, the Garden State would be far worse off – which is all the more reason for the state to pursue commonsense policies that embrace and welcome our immigrant neighbors, rather than force them to live in the shadows. Allowing undocumented New Jerseyans to legally drive, for example, would be a vital step towards building an inclusive state while improving public safety and boosting the economy.[2]

Endnotes

[1] Center for American Progress, The Economic Impacts of Removing Unauthorized Immigrant Workers, September 2016.

[2] For more on this issue, see: New Jersey Policy Perspective, Share the Road: Allowing Eligible Undocumented Residents Access to Driver’s Licenses Makes Sense for New Jersey, September 2014.

Proposed Tax Package Would Dig New Jersey’s Hole Much Deeper

Posted on by Jon Whiten

To read a PDF of this Fast Facts, click here.

The outlook for New Jersey’s economic future went from bad to worse this week, as legislators hastily pushed forward a tax-cut plan that would cost the state about $17 billion over the next 10 years as the price for finally enacting a gas tax increase for essential transportation capital funding over the next 8 years.[1] At a time when the state already cannot meet its current and future obligations, invest in the assets that grow a strong state economy or provide a strong safety net for its neediest residents, blowing a hole of this magnitude in the state’s budget is reckless, short-sighted and – indeed – unfair.

The largest piece of the plan is a cut in New Jersey’s sales tax, to 6 percent from 7 percent, which will go into effect over two years. This would be paired with a 400 percent increase – phased in over 4 years – in the threshold at which retirement income is subject to personal income tax. The annual loss from these tax cuts would top $1 billion in Fiscal Year 2018, hitting $1.8 billion by the time both are fully phased in and grow up to $2.2 billion by Fiscal Year 2026, assuming relatively conservative rates of growth.

decade of revenue loss-01

This projected revenue loss does not include the invisible cost that will likely emerge quickly if these tax cuts are enacted in the form of another credit downgrade for New Jersey bond issues, which could come with higher interest rates and tens of millions of dollars in new costs.

These tax cuts would deprive New Jersey of the resources it needs to thrive as a state, from helping to make college affordable to protecting our environment to ensuring that the least fortunate among us have adequate assistance to get by.

It would also deliver a big tax cut to many well-off families who need it least, unlike targeted tax credits designed to help low- and moderate-income working families, like the Earned Income Tax Credit (EITC).

The two tax cuts would give an average annual cut of nearly $2,000 a year to the top 1 percent – those with annual household incomes over $808,000 – and an average cut of $84 to those in the bottom 20 percent earning less than $25,000. Those in the middle 20 percent (household incomes between $49,000 and $79,000) would get an average tax cut of $253 a year.[2]

sales tax and retirement income-01

After accounting for both the tax cuts and the fuel tax increases, the top 1 percent would receive an average annual tax cut of $1,021, the bottom 20 percent would receive an average cut of $3 – or a nickel a week – and the middle 20 percent would receive an average cut of $63.

Of course, lower- and middle-income families also have – by definition – less income, so it’s also instructive to look at the impact of any tax change as a share of income. This package would make the state’s tax structure slightly less equitable by offering the smallest – nearly invisible, in fact – reduction of the average share of state and local taxes paid to the income groups that already pay the highest share – those earning less than $49,000.

who pays proposed plan june 2016 v2-01

Endnotes

[1] NJPP estimates based on currently unpublished Office of Legislative Services (OLS) fiscal note on bill A-12. NJPP used figures directly from OLS for the first 6 fiscal years’ impact, and then projected the increases over the next 4 years based on OLS’s estimated rates of growth. The range for 10-year budget impact is between $16.7 and $17.2 billion, from Fiscal Years 2017-2026. The low of the range represents annual FY 2023-2026 growth of 3 percent on the retirement income exemption; the high of the range represents annual FY 2023-2026 growth of 4 percent on the retirement income exemption.
[2] Analysis using Institute on Taxation and Economic Policy microsimulation, using 2016 incomes. The analysis is targeted to tax impacts for New Jersey residents only using an estimate that non-residents pay 20 percent of New Jersey sales taxes and 28 percent of fuel taxes.

In Every County, Very Few New Jerseyans Owe Estate Tax

Posted on by Sheila Reynertson

To download a PDF of this Fast Facts, click here.

estate-tax-by-county-01Eliminating New Jersey’s estate tax would seriously threaten support for the foundations of the state’s prosperity – like public colleges, safe communities and health care – all to save money for a very few of the state’s wealthiest households.

Each year about 70,000 people in New Jersey die. On average, fewer than 4,000 of the estates they leave – just 4 or 5 percent – owe any estate tax. These estates worth more than $675,000 belong to New Jersey’s wealthiest households.[1]

This means that in 20 of 21 New Jersey counties, fewer than 400 estates are large enough to owe the New Jersey estate tax in any given year, according to state Division of Taxation data.[2] This ranges between 2.2 percent (in Hudson County) and 9.1 percent (in Morris and Somerset Counties) of annual deaths in each county.[3]

The taxes that these heirs and heiresses pay on the wealth they inherit are an important – and growing – source of revenue that pays for priorities that benefit all New Jerseyans and help create more opportunities and shared prosperity. Eliminating the estate tax would leave New Jersey with $550 million less each year to help make our colleges affordable, our water and air cleaner, and our safety net stronger, according to independent legislative estimates.[4]

The dearth of residents across the state who owe the estate tax calls into question the claim that its elimination qualifies as “tax fairness” that would help the middle class. Rather, a look at who actually pays estate tax reinforces that wiping it off the books would benefit the fortunate few and do actual harm to rest of New Jerseyans.

The facts also debunk another claim made by proponents of eliminating the estate tax: that the number of New Jersey taxpayers subject to the tax is low because so many older people leave the state to avoid the tax. In fact, the revenue collected from New Jersey’s estate tax, and the related but separate inheritance tax, has grown by 44 percent in the past 13 years.[5] It is unlikely this would happen if people are fleeing New Jersey to avoid these taxes. And the state budget Gov. Christie proposed three months ago for the fiscal year that starts July 1 anticipates even more revenue from these taxes – an all-time high of $848 million.[6] The Office of Legislative Services 2017 estimate is now even higher, at $880 million.[7]

Some supporters of eliminating New Jersey’s estate tax think it must be part of a package deal to increase the fuel taxes needed to repair and maintain New Jersey’s deteriorating highway and transit networks. If real “tax fairness” is the goal, it would be better served by enacting an increase in the state’s Earned Income Tax Credit. Raising the state EITC would help nearly 600,000 households, all of which include people who work but are paid wages too low to make ends meet. This would help offset the fact that low-income and working-class New Jerseyans would pay a higher share of their yearly earnings in fuel taxes than would more well-off households.[8] Increasing the EITC would cost the state about one-tenth as much as eliminating the estate tax, and it would help far more New Jerseyans in every county.

estate-tax-vs-eitc-by-county-01

Endnotes

[1] New Jersey Policy Perspective, Eliminating the Estate Tax: Like Robin Hood in Reverse, January 2016.
[2] Using the Open Public Records Act, NJPP obtained information from the Division of Taxation that breaks down how many taxpayers in every county paid the estate tax in Fiscal Years 2013, 2014 and 2015. We use a three-year average of those figures in this analysis.
[3] NJPP analysis of number of deaths per county 2011-2013, as reported in the New Jersey Department of Health’s New Jersey Death Certificate Database, available at https://www26.state.nj.us/doh-shad/resources/BirthDeathData.html
[4] New Jersey Office of Legislative Services, Legislative Fiscal Estimate of S-1728, March 2016.
[5] NJPP analysis of annual Comprehensive Annual Financial Reports, available at http://www.nj.gov/treasury/omb/publications/archives.shtml
[6] State of New Jersey, The Governor’s FY2017 Budget Summary, February 2016.
[7] New Jersey Office of Legislative Services, Remarks of Frank Haines, Legislative Budget and Finance Officer to the Senate Budget and Appropriations Committee, May 2016.
[8] New Jersey Policy Perspective, Tax Increase to Fund Transportation Should Be Combined with Credit to Help Low-Income Families, January 2015.

Closing Digital Divide Could Promote Economic Opportunity in New Jersey

Posted on by Jon Whiten

Nearly 300,000 New Jerseyans are estimated to lack access to broadband service, particularly in rural parts of the state, hampering their ability to fully participate in the state’s economy.

top counties without access-01While New Jersey fares better than the nation as a whole on broadband access – just 3 percent of Garden State residents lack access, compared to 10 percent of Americans overall – access to this vital service should be universal here, in the country’s most densely populated state.

What’s more, while New Jersey’s overall broadband penetration is relatively high, access drops dramatically in the state’s rural areas, with more than 1 in 5 rural New Jerseyans (21 percent) lacking access.[1] (See Appendix for full breakdown.)

It’s worth noting that the estimates of broadband access used here likely overestimate New Jerseyans’ access, as they do not reflect certain factors – like the widespread use of fiber deployment waiver requests from telecom corporations – that are keeping additional New Jersey households from having access to broadband. We’ll have more on that in a forthcoming report.

And of course, access is one thing – adoption is another. While only an estimated 3 percent of New Jerseyans lack access to high-speed internet, an estimated 15 percent of New Jerseyans live in a household without broadband.[2] And just because someone has access to broadband doesn’t mean they have a choice of carrier. While recent data is not available for New Jersey, nationally, three-quarters of American homes have no competitive choice for high-speed broadband.[3]

Nationally, far more low-income households live without broadband (59 percent of households with incomes under $20,000) than higher-income households (10 percent of households with incomes over $100,000). Black and Hispanic families also live without broadband at much higher rates (50 percent and 46 percent, respectively) than white families (28 percent). Research finds that cost is a significant barrier to home broadband service for many low-income families; among those without broadband, 33 percent cite the monthly cost of service as the main reason, with an additional 10 percent citing the cost of a computer as their main reason.[4]

High-speed internet has in many ways become central to participation in society, and broadband has morphed in recent years from a luxury to a necessity. Large institutions – including major employers, public school districts and government agencies – increasingly assume their customers have access, and are adjusting their services accordingly.

While this change usually makes life easier for those with access to broadband, it can make life additionally difficult for those without access, as these same institutions cut back on their offline offerings. And for low-income people, other obstacles – like reliance on public transportation, inflexible or unpredictable work schedules and strained child care resources – make it even more difficult to fully participate in society and the economy without broadband access.

More access to affordable broadband could improve New Jerseyans’ economic opportunities, education and access to important government services. The existence of this digital divide continues to exacerbate the negative effects of income inequality, which is at record levels in New Jersey.[5] Closing this divide is an essential step to create equal opportunities for all.

Employment: In an era when many employers are using only online applications – including over 80 percent of Fortune 500 companies and the state and federal governments[6] – it’s no surprise that high-speed internet is an important tool for job seekers. Among Americans who have looked for work in the last two years, nearly 8 in 10 (79 percent) used online resources in their most recent job search, according to a 2015 survey.[7] Unemployed people using the web for job searches have been found to obtain jobs about 25 percent faster than similar candidates who didn’t search online.[8] And access to broadband doesn’t just help the unemployed find jobs – it can help the already-employed find better jobs.

Education: As any parent can attest, homework increasingly demands the use of the internet. Nearly all (94 percent) school districts serving low-income populations reported in 2007 that at least “some of their teachers assign internet-based homework.”[9] And among high schoolers surveyed in a more recent study, 73 percent “are required to use the internet to complete homework” daily or every few days and another 24 percent have to do so, but less frequently.[10] But 1 in 4 households with incomes under $50,000 and school-age children lack high-speed internet at home, placing major barriers to these children’s educational attainment.[11]

Access to Government Services: Access to broadband makes it easier for families to obtain information about, and apply for, most government public assistance programs.[12] New Jersey, for example, has online applications for all of the five major state-administered programs for low-income people (SNAP food assistance, Medicaid, TANF, CHIP and child care).[13] In addition to the greater difficulty that is involved in applying in person (such as missing work) or obtaining assistance over the phone, there are other disadvantages in not being able to apply for benefits online. Public benefit programs commonly make assistance effective based on the date of application; people who have to call to get an application mailed to them, complete it, and mail it back may have to wait longer for aid and lose a week or more of benefits.[14]

Appendix

counties broadband access-01

Endnotes 

[1] Federal Communications Commission, 2016 Broadband Progress Report, January 2016.
[2] US Census Bureau, Computer and Internet Use in the United States: 2013, November 2014.
[3] Federal Communications Commission Chairman Tom Wheeler, The Facts and Future of Broadband Competition, September 2014.
[4] Pew Research Center, Home Broadband 2015, December 2015.
[5] Economic Policy Institute, The Increasingly Unequal States of America, January 2015.
[6] Federal Communications Commission, Broadband Adoption Key to Jobs and Education, October 2011.
[7] Pew Research Center, Searching for Work in the Digital Era, November 2015.
[8] The Economic Journal, Is Internet Job Search Still Ineffective?, December 2014.
[9] National School Boards Association, Creating & Connecting: Research and Guidelines on Online Social – and Educational – Networking, July 2007.
[10] Hispanic Heritage Foundation, myCollegeOptions, and Family Online Safety Institute, Taking the Pulse of the High School Student Experience in America, April 2015.
[11] Pew Research Center, The Numbers Behind the Broadband ‘Homework Gap’, April 2015.
[12] US Government Accountability Office, Broadband: Intended Outcomes and Effectiveness of Efforts to Address Adoption Barriers Are Unclear, June 2015.
[13] Center on Budget and Policy Priorities, Online Services for Key Low-Income Benefit Programs, March 2016.
[14] Center on Budget and Policy Priorities, FCC Broadband Initiative Could Reduce Barriers to Low-Income Americans’ Advancement and Promote Opportunity, September 2015.

Raising the Minimum Wage Would Boost New Jersey’s Working Men and Women

Posted on by Jon Whiten

To download a PDF of this Fast Facts, click here.

In 2013 New Jerseyans overwhelmingly voted to raise the state’s minimum wage to $8.25 an hour and tie the wage floor to future increases in the cost of living. The increase was a big victory for New Jersey’s low-wage workers, but the current minimum wage of $8.38 an hour – or $17,430 a year if a resident works 40 hours a week every week of the year – still doesn’t cut it in high-cost New Jersey.

• The hourly wage needed for a single adult full-time worker to afford basic needs in New Jersey is at least $13.78, or $28,662 a year – more than one and a half times higher than the current minimum wage.[1]

• In other words, a New Jerseyan working at minimum wage needs to work at least66 hours a week just to avoid destitution and earn enough just to afford basic needs. If that working man or woman also had a spouse and two young children, the adults in the household would need to work at least 146 hours a week at minimum wage just to get by.

• In order to have a more stable household budget, a single adult New Jersey minimum wage worker would need to work at least 94 hours a week– and a family with two young children would need have adults working at least 259 hours a week, or nearly six and a half 40-hour workweeks split between two people.

• New Jersey’s low wage floor isn’t nearly enough for workers to even afford housing in this high-cost state. A Garden State resident would need to work at least 120 hours a week to a 2-bedroom apartment at fair market rent, according to the National Low Income Housing Coalition. In 7 of New Jersey’s counties, the number of hours required would be even higher.[2]

• An economy reliant on low-wage work harms not only workers and their families, but all of us. Unlike the vast majority of American businesses, low-wage employers have for years happily shifted “normal” business costs like health care and full wages to the American taxpayer. The hidden cost of low-wage work in New Jersey – paid for by taxpayers through public assistance and safety net programs to individuals in working families – is estimated at $3.3 billion a year.While the lion’s share is paid by all of the nation’s taxpayers, with federal program costs coming in at $2.6 billion, state taxpayers are chipping in $726 million – a cost that is significantly underestimated, since it does not take into account the state’s share of the Earned Income Tax Credit, which boosts the take-home pay of working families who aren’t paid enough to make ends meet.[3]

Many Workers Would Benefit from a Higher Minimum Wage

Raising New Jersey’s minimum wage to $15 an hour would directly boost the take-home pay of 1 in 3, or 36 percent, of Garden State workers.[4]

New Jersey’s low-wage workers, on the whole, are older and more educated than ever before, due to ongoing shifts in the nature of low-wage work.

An estimated 724,000 New Jerseyans earn less than $11.05 an hour.[5] Of these workers:

• 87 percent are adults (20 years old and older).

• 56 percent work full-time (35 hours a week or more). An additional 29 percent work between 20 and 35 hours a week, leaving a small minority – 15 percent – who are working in part-time jobs less than 20 hours a week.

• Close to half (44 percent) have attended or graduated from college.

• About 1 in 4 (23 percent) are parents, raising about 288,000 children.

Endnotes

[1] United Way of Northern New Jersey, ALICE New Jersey: Study of Financial Hardship.
[2] National Low Income Housing Coalition, Out of Reach 2015.
[3] UC Berkeley Center for Labor Research and Education, The High Public Cost of Low Wages.
[4] National Employment Law Project, The Growing Movement for $15.
[5] New Jersey Policy Perspective, Increasing the Minimum Wage to $10.10: A Win-Win for New Jersey.

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