The percentage of New Jerseyans living in poverty last year dropped below 10% for the first time this decade, although the proportion of the state’s residents who are considered poor remained higher than before the Great Recession, according to the most recent survey by the U.S. Census Bureau.
Given the 2018 American Community Survey also found the median household income to be stagnant when inflation was figured in, this means the typical family found itself in no better shape last year than in 2017.
Taken together, the two sets of data paint a positive, though not necessarily rosy, picture of New Jersey households’ financial health.
“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), a left-leaning think tank. “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.”
New Jersey’s median household income last year was $81,740. That was slightly higher than in 2017, though adjusted for inflation, it was actually $23 lower — but when accounting for the margin of error that difference is not considered significant. Last year’s median income was about 3% higher than the 2016 inflation-adjusted income and 7% more than in 2014; both of those changes are considered statistically significant.
Four counties had median incomes of $100K plus
Four counties — Bergen, Hunterdon, Morris and Somerset — had median incomes of more than $100,000, with a high of more than $121,000 estimated in Somerset. Cumberland County had the lowest median income of less than $53,000.
The census data shows there are big differences in prosperity in various parts of a geographically small state, with northern counties tending to be wealthier than those in the south. For instance, the annual income of close to a quarter of households in Somerset and Morris counties exceeded $200,000 in 2018, while in six counties, all of them in South Jersey, fewer than one in 10 households had incomes of more than $200,000. Similarly, roughly 20% of households in Atlantic, Cumberland and Salem counties had an income of less than $25,000 in 2018; fewer than 10% of those in Hunterdon, Morris, Somerset and Sussex were in that low-income bracket.
The drop in the statewide poverty rate to 9.5% of all New Jerseyans, down a statistically significant 0.5% from 2017, was welcomed by advocates for those who are of low income. It was the lowest rate since 2009. Still, advocates noted that the rate remains higher than at the beginning of the 2007-2009 Great Recession, when less than 9% of New Jersey residents were considered poor by federal standards.
“Any drop in the poverty rate is a welcome development, but it cannot and should not obscure the fact that poverty in our state last year remained significantly higher than at the beginning of the recession 1l years ago,” said Melville D. Miller Jr., president of Legal Services of New Jersey. “That’s deeply disturbing and shameful.”
Factoring in NJ’s high costs
And Shivi Prasad, director of the Legal Services’ Poverty Research Institute, cautioned that poverty levels based on federal measures mean little in a high-cost state like New Jersey. She called last year’s federal poverty rate “grossly misleading and understated,” as it considered only incomes below $20,231 for a family of three, for example, as poverty. In reality, true poverty is significantly higher in some parts of the state.
Using an alternative — 200% of the federal level, or $50,200 a year for a family of four — NJPP estimated that a much higher 22% of New Jerseyans, or 1.9 million people, lived in true poverty in 2018.
Last year, according to census data, Essex County had the highest poverty rate of more than 15%, closely followed by Cumberland and Hudson counties.
“We must keep our eyes on true poverty,” Miller stressed. “Such actual deprivation can put families out on the street and even break them up. It can bar children from thriving in school and can threaten their very lives. It cannot be ignored.”
The poverty level for children in New Jersey was almost 14% last year, essentially unchanged from 2017, but ranged as high as around 22% in Passaic, Hudson and Essex counties.
Poverty also hits other groups hard in New Jersey, NJPP noted. For instance, 16.2% of blacks, 17.1% of Latinos and 7.2% of Asians lived below the official poverty line in 2018, compared with 5.5% of whites. And women had higher poverty rates than men — 10.5% compared to 8.4%.
Steps to raise standard of living
The Murphy administration and legislators have taken a number of steps since Gov. Phil Murphy took office in January 2018 to improve the standard of living for the poorest New Jerseyans, not the least of which was increasing the state’s minimum wage to $10 per hour as of last July 1 and going up to $15 in 2024.
Still, some say the state needs to do even more.
“Lawmakers must prioritize policies that benefit low-income workers, communities of color, and impoverished New Jerseyans who face barriers to success,” McKoy said. “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.”