New Jersey is home to both people with unimaginable wealth and to single working moms struggling to get by.
To better understand this dichotomy, NJ Advance Media dug into the newest Census data and found where this kind of income inequality is highest and lowest in New Jersey.
The Census measures income inequality by the Gini index, which calculates the income distribution in a place. The closer the number is to one, the more wealth is concentrated in the hands of fewer people, thus the bigger income disparity.
We built an interactive map with the Gini index income inequality number of every municipality for 2011-2015. Find out what your town scored below.
According to the latest numbers released for 2011-2015, New Jersey’s Gini index is at 0.4759, which is the 13th highest in the nation.
The town with the most income inequality is Deal in Monmouth County with a Gini index of 0.619, the Census shows.
Saddle River in Bergen at 0.600 and Far Hills in Somerset at 0.599 are the towns with the second and third highest level of income inequality.
However, many of the towns with the most income disparity are extremely wealthy with very small populations. A few millionaires in a small town can make a big difference.
“When you’re poor, you make $10,000 and $20,000 a year, but a rich person can make millions of dollars a year which can skew the [Gini index] dramatically,” according to Steve Scott, a researcher at the Joseph C. Cornwall Center for Metropolitan Studies at Rutgers.
For example, Deal, a town of about 750 residents, has about 18 percent of its households making $200,000 a year or more.
However, when we analyzed only the New Jersey towns with more than 10,000 residents, Atlantic City at 0.5462 and Montclair at 0.5385 emerged as the cities with the highest Gini Index scores.
The map above with the newest data shows how extreme income disparity is more common in the urban centers of the state.
“In northeast New Jersey, where you the commuting shadow of New York, you see all kinds of poverty and wealth clustered together,” said Steve Scott of the Cornwall Center for Metropolitan Studies at Rutgers. “When you go further south, you’re not gonna see those extremes.”
The Cornwall Center also zeroed in on Essex County as having the fifth-highest Gini index among all counties in the nation with a population of 250,000 and over.
This was also the first year we could compare Gini index numbers from two different five-year periods: 2006-2010 and 2011-2015.
The two datasets give us a snapshot of the income inequality from a time when New Jersey was beginning to feel the effects of the recession and compare it to the years when the state was trying to recover from it.
Statewide, New Jersey’s Gini index was slightly less, with a score of 0.463 in 2006-2010 compared to what it was in 2011-2015 with a score of 0.4759. Thus, in the last decade, New Jersey has become a little more unequal.
The statewide rise in New Jersey income inequality is also reflected in the data for individual counties, which all except Cape May saw upticks in their Gini index scores.
Middlesex and Essex are the two counties with the biggest increases in income disparity over the two periods.
When it comes to towns, 370 had higher Gini index scores and higher income inequality in 2011-2015 than they did 2006-2010, while 191 had lower scores.
However, most of these towns have higher margins of error that make their increases and decreases statistically insignificant. When we took away cities with high margins of error and smaller populations, we came up with 38 cities that increased their income disparity and only three cities that saw it shrink.
The city of Orange in Essex had the biggest jump in its Gini index score, from 0.418 in 2006-2010 to 0.4765 in 2011-2015.
4 charts that show the rapid growth of income inequality in N.J.
Renee Koubiadis, executive director of Anti-Poverty Network of New Jersey, notes that while wages for wealthiest residents have continued to grow, wages for middle and lower classes have stagnated as cost of living, especially housing and medical care expenses, continue to rise.
This is especially exacerbated in communities like Atlantic City, the city with the highest Gini index in New Jersey, where the closing of the casinos can ripple through a community.
“We don’t typically think of the impact beyond a company or casino closing beyond those workers not working. If [those workers] get sick and can’t fill out their pharmacy prescriptions, then that affects the pharmacy. It affects the whole community just beyond the workers being laid off,” Koubiadis said.
She said that beyond twice raising the Earned Income Tax Credit, the state has done little to help lift people out of poverty and stem income inequality in New Jersey.
Felipe Chavana has witnessed this phenomenon in Essex County first-hand as director of New Jersey Legal Services, which provides free legal assistance to low-income New Jersey residents.
Essex is essentially a “tale of two cities,” according to Chavana. The eastern half is made up of four largely segregated inner cities (Newark, Orange, East Orange and Irvington) with high poverty, high crime, high unemployment and lower quality of schools, where the population is overwhelmingly people of color. By contrast, the western half is made up of some of the wealthiest communities in the state.
“It all relates to the high cost of living in Essex, especially in areas where there’s no rent control,” said Chavana. “[The middle class] then moves out, and they all end up in Pennsylvania or western New Jersey.”
In addition, the poorest of the poor in Essex are getting poorer at a rate that Chavana has never seen before. With the new Trump administration, things are looking bleak, he said.
“There’s no reason for optimism,” he said. “Well, maybe there is in the way that things will have to get worse before they get better.”
Carla Astudillo may be reached at castudillo@njadvancemedia.com. Follow her on Twitter @carla_astudi. Find her on Facebook.
Our editors found this article on this site using Google and regenerated it for our readers.
