Legal Services president Melville D. Miller, Jr., said:
“Especially in a very high-cost state like New Jersey, income inequality and the increase of income and wealth in the highest fifth of households can be a major factor in driving the cost of living still higher, putting essentials further beyond the reach of those with lower incomes.”
According to the report:
“The entire increase in income inequality between 2000 and 2009 has come from an increase in the share of income held by households in the top quintile, while the income shares for the bottom four quintiles declined. More specifically, when the top quintile is broken down into smaller components, it is, in fact, the top one percent of households that has reaped the bulk of the increase in income share.”
Among the highlights of the study are:
The top quintile (households with incomes of at least $132,000) pulled in 77 percent of all the additional income gained in New Jersey during the decade, while the income share of the bottom quintile (under $27,300) and the next to bottom quintile ($27,300 to under $53,230) actually lost ground. The third quintile ($53,230 to under $85,500) had an 11 percent share of the income gain during the 10-year period, and the fourth quintile ($85,500 to under $132,000) a 14 percent share.
Of the 77 percent gain for the top quintile, 27 percent – or more than a fourth – went to the top one percent in that grouping, 17 percent to the next four percent, 13 percent to the next five percent and 21 percent to the next ten percent.
As income inequality increased, its impact was disproportionately higher for female-headed households, Blacks, Hispanics and people with high school diplomas or lower levels of education.
During the decade, households headed by females emerged as the largest grouping within the bottom quintile. On the other hand, nearly 90 percent of those in the top quintile lived in married couple households.
Although the numbers of Blacks and Hispanics in the state’s population increased, there were even greater proportionate increases in the percentage of Blacks and Hispanics in the bottom or poorest quintile.
Individuals with education levels no higher than a high school diploma or GED made up 65.5 percent of the poorest or bottom quintile. At the same time, those with associate’s, bachelor’s, graduate or professional degrees accounted for 63 percent of the top quintile.
A recommendation of the study is that state government officials, before making policy decisions, first conduct an “income inequality impact review” to weigh the consequences of any change or new initiative.