Poverty at record rates in NJ, report says

Cross-posted from Channel Surfing:

Legal Services of New Jersey issued its annual poverty report, which found that more people in the state had trouble making ends meet in 2011 than at any time since the late 1950s.

The report‘s top findings were:Benchmarks2013

1. Record Poverty.

In 2011, poverty in New Jersey reached a record high not seen for the past 50 years. Census data going back to 1959 show that the official poverty rate of 10.4 percent in 2011 has not been surpassed in the last fifty years.

2. Nearly One-Third Face Significant Deprivation.

Using the Real Cost of Living, the portion of the state struggling to meet basic needs is dire — 31.5% were below 250% FPL in 2011. More than 2.7 million residents, or about 31.5 percent of the total population, were living in true or actual poverty in 2011; they were grappling to meet basic necessities.

3. Record Child Poverty.

Record number of children were living in poverty in 2011. About 780,000, or 38.5 percent of all children, were below 250% of FPL in 2011. Of these, 31.2 percent were below 200% of FPL and 14.7% were below 100% of FPL, all record highs for the state.

4. Extreme Poverty In Certain Municipalities.

Municipal poverty was highest in Camden, where 64.5 percent of the total population lived in households with incomes below 200 percent of FPL, followed by Passaic with a poverty rate of 59.5 percent, Lakewood at 55.9 percent, Paterson at 53.3 percent, Trenton at 51.5 percent, and Newark at 50.4 percent.

5. Child Poverty In Extreme Poverty Municipalities.

Child poverty rates were highest in Camden — 79 percent of all children were below 200 percent of the FPL in 2011. In another six places – Passaic, Lakewood, Paterson, Trenton, Newark, and Union City — more than 60 percent of children were below 200 percent of the FPL.

6. Continued High Unemployment.

In July 2013, the unemployment rate in New Jersey was 8.6 percent, substantially higher than the 4.6 percent at the onset of the Great Recession, and even higher than the current national average of 7.4 percent. The most recent data for July 2013 shows that New Jersey had the seventh highest unemployment rate in the nation.

7. Record Food Insecurity.

Food insecurity reached another all-time high in 2011. A sizeable portion of New Jersey households did not have enough food for all their members in 2011. Data from a three-year period (2009-11) show that 12.3 percent of New Jersey households were food insecure at some point during that period, and 4.5 percent had very low food security, meaning that the food intake of one or more household member was reduced or their eating pattern disrupted due to lack of resources. This represents a record high for the fifth consecutive year.

8. High Level of Medically Uninsured.

Working-age population below 200% FPL had very high rates of uninsurance in 2011. Working adults with low incomes were much more likely than either children or the elderly to be without health insurance coverage. In 2011, a sizeable proportion of working adults with incomes below 200 percent of the FPL were without health insurance — 41.7 percent of working adults below 50% FPL, 38.2 percent between 50-99% FPL, and 42.4 percent with incomes between 100-200% FPL.

9.Poverty Correlates with School Districts Needing Improvement.

School districts failing to make adequate progress were more likely to be located in high poverty areas. During 2011-12, 19 category “A” school districts (poorest in the state) were identified as needing improvement. The “J” districts (considered the most affluent in the state) did not have any schools identified as needing improvement. In addition, the number of “A” district schools needing improvement has increased significantly in the past three years. During the 2009-10 school year, 13 failing districts fell under the “A” classification. By 2011-12 school year, the number rose to 19, a 46 percent increase. In all three years, no “J” district schools were identified as needing improvement.

Officials with Legal Services said about a quarter of the state’s residents were considered poor in 2011″nearly 1 percent
higher than the previous year and 3.8 percent more than pre-recession
levels,” according to NJ.com.

“This is not just a one-year or five-year or 10-year variation,” said Melville D. Miller Jr., the president of LSNJ, which gives free legal help to low-income residents in civil cases. “This is the worst that it’s been since the 1960 Census.”

The numbers could get worse, LSNJ said (according to NJ.com):

The report warned Census figures for 2012 to be released this month may be higher. Those numbers are expected to show some of the impact from Hurricane Sandy, which took a bite out of the state’s economy and destroyed a large amount of affordable housing.

New Jersey is not alone, Miller said.

In 2011, the federal poverty rate was the largest it had been in 18 years, according to the Congressional Research Service.

“The Great Recession was the worst major economic event since the early ’30s,” Miller said. “It’s taken longer for the U.S. to come out of it.”


The transitional economy

The New York Times reports today on one of the more important issues facing the nation — and one being ignored by policymakers at the state and federal level obsessed with spending.

Nearly five million Americans out of work for more than six months are left to wonder what kind of help might be coming, as the Federal Reserve, the International Monetary Fund and a bipartisan swath of policy experts implore Washington to act — both to alleviate human misery and to ensure the strength of the economy.

The pain of the long-term unemployed has persisted even as the overall jobs picture has brightened a bit and the unemployment rate has fallen to 7.8 percent. The new government report for October was due to be released Friday morning.

“The problem is incredibly urgent,” said Kevin A. Hassett, director of economic policy studies at the American Enterprise Institute and an adviser to Mitt Romney’s campaign. “Spain had a financial crisis in the late 1970s and has never seen its unemployment rate drop back to where it was before that crisis. The unemployed become discouraged, and ultimately the employment to population ratio might take a permanent hit.”

The potential drag on the economy is great, as is the likelihood of hardship — hunger, homelessness, etc. This will have a much greater long-term impact on the national debt than spending on food stamps, unemployment insurance, welfare payments and other general assistance.

We need to address the transitional nature of the current economy and our priorities and begin focusing our resources on the shifts that are occurring. That means looking for new ways of working and being honest about the costs of our current way of doing business. Right now, we are more focused on turning a dollar into two or 10, than in using that dollar to create something tangible and useful or in finding ways to function in a sustainable manner.

The goal, always, is economic growth, to exclusion and at the expense of everything else. In the wake of Hurricane Sandy, that just seems like a misplaced priority.


The job numbers in perspective

Today I have a piece on the state job numbers up at NJ Spotlight.

New Jersey Job Numbers Provide Sobering Backdrop to Labor Day

Population growth helps keep unemployment high, while workers who find jobs often must live with pay cuts

Job-seekers are looking for help finding a new job at a time when both the national and state unemployment rates remain at generational highs and population growth has created more job-seekers for each job opening.

While New Jersey has replaced nearly all of the jobs lost during the first few months of the recession, population growth means that the state has about 60,000 more workers than jobs. This has created an employers’ market and is creating a downward pressure on wages, analysts say.

Read on here.

Another uptick in N.J. unemployment rate

The state’s unemployment rate ticked up .2 percentage points in July, to 9.8 percent, just as the governor is preparing to tout a New Jersey economic miracle at the Republican convention.

According to the Department of Labor, the state has added 40,200 nonfarm jobs over the last year, but it lost 12,000 jobs in July, with five sectors leading the way:

  • professional and business services lost 3,900 jobs, “due to cutbacks in the administrative support/waste management and remediation segment (-4,600).”
  • manufacturing lost 3,000 jobs
  • construction lost 2,700
  • financial activities lost 400 jobs
  • and information lost 300 jobs.

“The national economy has been sluggish and, realistically, we can’t be exempt.  Given the national softness and the strength of our job gains in May and June some fallback was likely,” Charles Steindel, chief economist for the state Department of Treasury, said in a press release. “Still, New Jersey’s labor force participation rate and the percentage of our population who are employed remain above the national averages. Considering we have seen job growth in 9 out of the past 11 months, we anticipate that job growth should resume and start to put some downward pressure on unemployment.”

But New Jersey’s rate grew faster than the national rate, which is now 8.3 percent.

Gordon MacInnes, president of New Jersey Policy Perspective said in an interview earlier this week for a different story, before the report was released, that much of the May and June increases touted by the administration were from seasonal employment and masked the problems the state continues to face.

“With the blow up (of the telecommunications and pharmaceuticals industries) we’ve lost a lot,” he said. “In May, with the biggest one-month of job additions, it was driven by seasonal boardwalk jobs and the Revel casino jobs. We still lost 4,800, approximately, in other jobs, and in terms of gross income we may have held even or lost a bit.

“That is a pretty good indicator of our problems.”

The full press release follow:

TRENTON, August 16, 2012 – While the long-term employment trend continues to be positive, preliminary numbers show that employment in New Jersey shifted lower in July and the unemployment rate edged upward. However, overall private sector employers in the Garden State have added 79,000 jobs since February 2010, which was the low point of private sector employment during the recession.

Over the year, July 2011 – July 2012, total nonfarm employment in New Jersey increased by 40,200 jobs.

“The national economy has been sluggish and, realistically, we can’t be exempt.  Given the national softness and the strength of our job gains in May and June some fallback was likely,” said Charles Steindel, Chief Economist for the New Jersey Department of Treasury. “Still, New Jersey’s labor force participation rate and the percentage of our population who are employed remain above the national averages. Considering we have seen job growth in 9 out of the past 11 months, we anticipate that job growth should resume and start to put some downward pressure on unemployment.”

The state’s unemployment rate moved up in July, by 0.2 percentage point, to 9.8 percent, remaining above the national rate, which also edged up, by 0.1, to 8.3 percent in July. Preliminary estimates indicate total nonfarm wage and salary employment in New Jersey decreased in July, down by 12,000 jobs, to a seasonally adjusted 3,899,600, as measured by the United States Bureau of Labor Statistics (BLS) through its monthly employer survey. Job loss was registered in both the private (-7,100) and public (-4,900) sectors of the state’s economy.

The job gain from April to June was still the largest two-month gain witnessed in 12 years. However, based on more complete reporting from employers, previously released June estimates were revised lower, down by 2,600 jobs, to show an over-the-month (May – June) total nonfarm employment gain of 7,300 jobs. Preliminary estimates indicated an over-the-month gain of 9,900 jobs

In July, job loss was recorded in five of ten private industry sectors; four recorded gains while one was unchanged. The industry sector with the largest drop was professional and business services, which fell by 3,900 jobs, due to cutbacks in the administrative support/waste management and remediation segment (-4,600). Other industries that registered larger losses included manufacturing (-3,000) and construction (-2,700). The decline in manufacturing was due to contraction in the nondurable goods component (-3,500) while the loss in construction is reflective of a longer-term trend that has seen employment in this sector fall by 8,200 over the past year. Smaller losses occurred in financial activities (-400) and information (-300).

The largest over-the-month gain occurred in the trade, transportation and utilities sector (+1,600), mainly due to advances in the transportation and warehousing (+1,900) and wholesale trade (+800) subsectors. Smaller gains occurred in other services (+600), education and health services (+500), and leisure and hospitality (+500).

In July, public sector employment was down by 4,900 due to the trimming of payrolls at all three levels of government: federal (-300), state (-2,400) and local (-2,200).

Over the month, the unadjusted workweek for production workers decreased 0.5 hours to 41.2 hours, average hourly earnings were higher by $0.39 to $19.57 and weekly earnings rose by $6.47 to $806.28. Compared to July of last year, the unadjusted workweek increased by 0.8 hours, average hourly earnings increased by $0.67, and weekly earnings were higher by $42.72.

Stagnation, stagnation, stagnation

July’s job numbers appear better than June’s, based on today’s jobs report from the U.S. Department of Labor, but unemployment ticked upward — another ominous sign that the economy is far from any kind of real recovery four years after the near-collapse of the banking system.

The numbers:

Total nonfarm payroll employment rose by 163,000 in July, and the unemployment rate was essentially unchanged at 8.3 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in professional and business services, food services and drinking places, and manufacturing.

In June, just 64,000 jobs were added.

Economists quoted by The New York Times expressed resignation — the report was not a surprise, perhaps not as bad as it could be, but we should not expect much improvement for the rest of the year.

“It’s a lot better than we’d been seeing in the last few months, but it’s still short of the kind of job growth we were seeing at the beginning of this year,” said Paul Ashworth, chief United States economist at Capital Economics.

As for the pace of hiring through the rest of the year, he said, “I think this is about as good as it’s going to get.”

For context, the economy now produces as many goods and services — more, in fact — than it did before the downturn officially began in December 2007. But it does so with almost five million fewer jobs.

And the rate at which the economy has been adding jobs in the last few months is just barely fast enough to absorb the growth in the labor force.

“In the weakest recovery since the Great Depression, nearly the entire reduction in unemployment since October 2009 has been accomplished through a significant drop in the percentage of adults participating in the labor force — either working or looking for work,” said Peter Morici, a professor at the University of Maryland.

NJPP’s unemployment rates by county

New Jersey Policy Perspective has published a map that shows unemployment rates by county in the state. Though the state unemployment rate was at 9.6 percent, what is striking is that the map shows 11 of 21 counties with unemployment rates above 10 percent — seven of which are above 11 percent. Six counties, most of them in the northwestern part of the state, are below 9 percent (Morris, Warren and Hunterdon are below 8 percent).

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