Analysis of regional data from the US Census Bureau 2007 American Community Survey

“With high gas and living prices on a single mom’s salary, it’s pretty tough,” says Brigida Freyes, mother of three.  Brigida, like so many northern New Jersey residents, has learned how to juggle rising living expenses as her wages stagnate.  The inequality between income and cost of living takes its toll as many find themselves working more yet making less.  Public transportation, healthcare costs, and school supplies systematically eat away at what many families earn and it seems there may be no end in sight. 

On August 26, 2008, the US Census Bureau released data on earnings and income.  Using detailed local data that was available for the first time last year, the Garden State Alliance for a New Economy (GANE) prepared a report examining the state of Newark's working poor in an economy that is fast losing middle-class jobs and facing rising income inequality.  GANE, is a newly-formed coalition of community-based organizations, labor unions and a member of the national Partnership for Working Families network, which for more than fifteen years has combined research, organizing, and advocacy to promote economic policies in the broad public interest. (www.communitybenefits.org)

The report, which included an analysis of census data released on August 26th, indicated that 29.5% of Newark full-time year-round workers in the past 12 months earned less than $25,000 per year.  (This is slightly lower than in 2006, when 33% of full-timers earned less than $25,000.)  Many Newark residents are working hard and playing by the rules, yet they are living in poverty.  Just ask Belinda Scott, who has taken on a part-time job to compliment her full-time employment yet still earns less than $40,000 a year, with no healthcare.  "Working hard and playing by the rules doesn't guarantee that you won't be in poverty in this economy," said GANE co-chair Milly Silva, who is also president of the Service Employees International Union local 1199 in New Jersey.

An estimated 61,406 or 24% of Newark residents live below the federal poverty threshold as compared to 8.5% of state residents who live below this threshold and 31% of adults living under the federal poverty threshold work full or part-time.  It looks as though many Newark residents are truly working…to be poor.

The median household income for residents in the City of Newark is only half that of the state of New Jersey. Racial and ethnic income disparities mean that African-Americans and Hispanics in the City of Newark are even more likely than white Newark residents to fall behind the state's median.  Census data indicate that African-Americans and Latinos each had a median household income approximately 25% less than that of whites.  The data also suggests a “tear-drop” economy in the City of Newark with a strikingly high percent of people with an income of $25,000 or less and a very small percent of people making $50,000 or more. 

"Despite a slight gain of $665 last year, middle-income households are no better off now that they were at the prior economic peak of 2000.  In other words, the economic recovery of the 2000s, which ended last year, has done very little to boost their living standards.  They’ve done their part, contributing to strong productivity growth, but they’ve far too little to show for it," said senior economist Jared Bernstein of the Economic Policy Institute.

How does this translate into poverty?  Well, over 11,000 families in Newark live in poverty, with over 23,689 children in poverty.  The Census ¬indicates there were 20,510 households with income below federal poverty level.

As the economy heads into a recession, it is the working poor who will be hit first and worst.  GANE is calling for economic development policies that will ensure that working people are not left behind in the economic recovery.