Report: A third of NJ residents live in ‘true poverty’

Nearly three million New Jersey residents—or one-third of the state—live in “true poverty.” That’s according to a new report from Legal Services of New Jersey (LSNJ), which examined the real costs of living in the state, including housing, child care, food, transportation, health and taxes.

The LSNJ report contrasts with U.S. Census numbers that indicate fewer than a million New Jersey residents live in poverty. Federal data uses the Federal Poverty Level (FPL) to determine poverty numbers, but the LSNJ reports claim the FPL doesn’t accurately consider state-level costs of living and the true costs of necessities. 

Because low-income individuals and families often make trade-offs in their expenses in order to make ends meet, LSNJ added up the minimum costs for each of the aforementioned expense categories and set the “true poverty” level at the sum of those costs—that is, if a family spends less on food in order to put gas in the tank to keep their ledger balanced, they should be considered under the poverty line.

The report points out that New Jersey’s high cost of living—the third highest in the country—contributes greatly to household poverty, but it’s largely ignored by the FPL. That’s a problem since the FPL is the main criteria used to determine what federal assistance (food, tax, health care) people receive.

While the FPL may have made sense when it was created in the 1960s (and while it has adjusted for inflation), it no longer serves its purpose of determining a family’s financial stability, the report found—for instance, while the average housing cost for a three-person family with two children was 33.5% of the FPL in 1960; housing costs consumed 84% of the FPL threshold in 2019, when data was collected. By contrast, housing and child care, on average, comprise nearly half of a family’s budget in the TPL model.

And, as you can tell from the chart below, the costs assumed by LSNJ are not inflated—they’re realistic numbers that lower-income individuals and families are familiar with.

Courtesy LSNJ.

In a family with two working adults and three children, each adult would have to make $24 an hour to be above the “true poverty” level—far above what the FPL lays out. Based on the LSNJ study, a family of three with one preschooler and one school-age child would need to earn 342% of the FPL to make ends meet. 

Predictably, the amount needed to be out of poverty is higher in some New Jersey counties, lower in others. Hunterdon, Bergen and Somerset counties are some of the most expensive counties in which to live; on the other end are Salem, Warren and Cumberland.