New Jersey Poverty Increased in 2008

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EDISON — New 2008 Census data released today (from the Current Population Survey) show that poverty in New Jersey is rising.

Approximately 787,000 New Jerseyans had incomes below the Federal Poverty Level in 2008, an increase of 45,000 over 2007 figures. The two-year average of those in poverty for the period 2007-2008 was 9 percent of the population, up from the 8.75 percent for 2006-2007.

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“As troubling as the poverty numbers are, the reality now is almost certainly worse. Today’s Census release does not cover 2009 and, consequently, does not capture the full effects of the current recession,” said Serena Rice, managing director of the Legal Services of New Jersey Poverty Research Institute (PRI).

“Changes in other economic indicators over the course of the last year provide important context for interpreting today’s poverty data,” according to Shivi Prasad, a senior PRI researcher. “Economists tell us that poverty rates rise with increasing joblessness. In New Jersey, the unemployment rate rose from 5.5 percent in July 2008 to 9.3 percent in July 2009. With about 422,000 people out of work in July 2009, about 175,000 more people are out of work than one year previously. These large increases in unemployment are likely to translate into substantially higher overall poverty numbers for 2009, while the increase will be even sharper for vulnerable groups like children.”

With one of the highest median incomes in the country, New Jersey continues to present a misleading image of affluence. “The state’s high average income conceals the impact on New Jerseyans of national trends that show wages stagnating for the vast majority of American workers,” explained Allan Lichtenstein, a senior PRI researcher.

“The expected continued decline in living standards as median incomes stagnate will be felt in New Jersey across all sections of the population, although minorities and children will likely suffer disproportionately,” continued Lichtenstein.

The recession’s impact on health insurance coverage rates is less clear. “Although the two-year average for New Jersey residents without health insurance coverage declined, going from 15.6 percent of the population for the period 2006-2007 to 14.9 percent for 2007-2008, this number is almost certainly worse today, given the increases in unemployment and the correlation between increases in unemployment and decreases in employer-based health insurance coverage,” said Prasad.

“On the other hand,” Rice noted, “the efforts by the State of New Jersey to improve outreach to the uncovered segments of the population seem to be paying off, with the increase in health insurance coverage for New Jersey residents living both below the poverty level and in extreme poverty, as well as for children in these income groups.”

Melville D. Miller, Jr., Legal Services of New Jersey president, stressed that “especially in times of worsening poverty, the State of New Jersey must prioritize programs serving basic needs for the hundreds of thousands of residents facing a daily struggle to make ends meet. At the most extreme end of this spectrum are the families and individuals that rely on cash assistance for minimum support. While poverty thresholds are adjusted for inflation every year, New Jersey has not changed welfare grant amounts in twenty-two years. Cash assistance for our poorest neighbors now provide less than one-third of the official poverty level income for a family of three.”

Legal Services of New Jersey, located in Edison, is the coordinating office for the state’s system of Legal Services programs, which provide essential legal aid in civil matters to low-income people in all twenty-one counties in New Jersey. The Poverty Research Institute conducts systemic research on the incidence, effects and other aspects of poverty in the state, and the relationships among poverty, work and public policy—and makes its findings available to the public.


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