One million New Jerseyans do not earn enough to meet basic needs, according to a study issued today by the Poverty Research Institute.
The report, called The Real Cost of Living in New Jersey, measures what it says are the actual costs incurred to live in the state. It puts the figure for a typical four-person family living at between $64,000 and $74,000 annually.
“The percentage of families with incomes below the RCL in 2010 ranges from a low of 20 percent for a two adult–two school-age children family to a high of 74 percent for a one adult–two school-age children family,” according to the report.
Housing is the largest component of the cost for most demographics looked at in the report.
According to the report:
New Jersey’s regrettable position as one of the highest cost (usually first, second, or third) of the contiguous 48 states obviously affects all residents, but disproportionately has a negative impact on those in the middle and lower income groups. They are the ones most likely to have fewer or no reserves, to have fewer or no other places to turn, and to spend all or nearly all of their income on the most basic necessities, especially housing. See LSNJ’s 2011 study, “Food, Clothing, Health or a Home? The Terrible Choices and Deprivations—and Great Courage—of New Jerseyans Who Live in Poverty,” for a detailed analysis of the spending patterns and hardships of those with lower and middle incomes.
In addition, much evidence points to an upward-pushing price spiral phenomenon in higher cost states. Comparatively higher costs tend to push (or pull) prices generally higher, especially in fixed-supply areas such as real estate. When such an effect occurs, it may (depending upon the status of wages) tend to increase the wage gap—the distance between average wages and average costs.