Saturday, March 15, 2008

A true measure of poverty

Most Americans are familiar, or have at least heard of, the federal poverty guidelines. The Real Cost of Living (RCL) is an alternative to those guidelines, attempting to take a more realistic approach to examining the standards of living and survival that we have in our country. According to Poverty Benchmarks 2008: Assessing New Jersey’s Progress in Addressing Problems of Inadequate Income, from Legal Services of New Jersey's Poverty Research Institute, RCL "measures how much income is required for a family [...] to meet all basic needs without any public or private support. It takes into account the number of members in a family, ages of all children and place of residence and relies on conservative estimates of costs for basic needs, with no allowance for extras like eating out or savings." The RCL factors in full time working adults, but not the elderly or the disabled, who have different needs. The RCL is not tracked on a national level, but organizations do calculate RCL on a state level. This is New Jersey's RCL:

Now, I understand that table only looks at a single parent with two school age children, and most people have no sympathy for single parents, for whatever reasons, although they do rank somewhat higher than gay couples. Here are the numbers, by county, for the necessary combined income for a family of two adults with two school age children in New Jersey for 2005 (from Diana Pearce and the LSNJ Poverty Research Institute):

Atlantic - $33,968
Bergen - $48,043
Burlington - $54,220
Camden - $40,165
Cape May - $45,411
Cumberland - $45,811
Essex - $39,472
Gloucester - $51,018
Hudson - $43,453
Hunterdon - $57,254
Mercer - $45,196
Middlesex - $44,824
Monmouth - $44,941
Morris - $54,753
Ocean - $51,979
Passaic - $42,666
Salem - $46,151
Somerset - $58,318
Sussex - $50,192
Union - $40,720
Warren - $47,449

I don't have the 2008 figures for each county, but I can adjust for inflation the highest, lowest and median figures (but no more than more). We'll look at Somerset, a central county in the northern part of the state, Atlantic, a southeasten county which contains Atlantic City, and Salem, the southwesternmost county. Thirteen of the 21 counties in New Jersey were within $5,000 of Salem county (including, not coincidentally, Salem itself), so don't give it too much mind that Salem is an outlying county, geographically speaking.

Atlantic's $33,968 in 2005 is $36,819 in 2008; Somerset's $58,318 in 2005 is $63,213 in 2008; and Salem's $46,151 in 2005 is $50,025 in 2008. Dem's a lot o' beans.

You can look at those figures and see what you will, but how I interpret those numbers is that what we used to consider middle class is now the bare necessity to maintain an adequate standard of living. If your kid gets sick, or you lose your job, or your car is stolen, you could very well be dropped into the financial void. With inadequate health care coverage, no job security, and a stagnant economy, the risks are high.

The situation is not improving. According to Poverty Benchmarks 2008, in 2004, 2005, and 2006, 4% of New Jersey's population was at a severe poverty level (below 50% of the federal poverty level), while 9% were at the federal poverty level. In contrast, 20 to 21% of New Jersey was living in true poverty (200% or less of the federal poverty level) from 2004 to 2006. There are undoubtably many who who above the level of true poverty, but not by much. When a quarter of your population is on the ropes, that's not positive.

While it's hard to say how this translates to the rest of the country, the U.S. Census Bureau's Persons Below Poverty Level (2003) has New Jersey ranked 46th out of 50 states in terms of total poverty. In other words, 45 states have a higher percentage of poor people as measured by the federal guidelines. We are now in a Recession, as say 71% of 55 economists surveyed by the Wall Street Journal last week. I'm not an economist, I'm not a fiscal advisor, and I'm not a mathematician. I can read, though, and the writing is on the wall. We're in trouble.

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