New Jersey residents: earnings can’t keep up with the rising cost of living in the Garden State.
By: Hank Kalet
I’ve been feeling like a gerbil on an economic wheel lately.
Month after month, the bills come in and, regardless of what we do, regardless of whether there is a bit of extra earnings from freelance work or my wife’s side jewelry business, we still can’t seem to get ahead.
We pay off the credit cards and the dog gets sick. We make some headway on our equity loan and the pool filter dies. Gas prices rise, the cost of groceries soar and at the end of each month the balances in the checking and savings accounts seem a bit smaller than the month before.
Apparently, I’m not alone. The Monmouth University Polling Institute released poll results Tuesday showing most New Jersey families feel the same way.
According to a press release issued by the institute, a majority of New Jersey residents say "their earnings can’t keep up with the rising cost of living in the Garden State."
A shocking 59 percent of the 804 New Jersey residents polled said their family’s income is falling behind the cost of living (the figure nationally, according to a fall Pew Research Center poll, was 40 percent), while just 30 percent believe they are keeping pace and 6 percent say their incomes are outpacing their expenses.
The anxiety worsens as incomes drop. According to the Monmouth poll, 72 percent of New Jerseyans with household incomes of less than $50,000 said the cost of living was rising faster than their wages. The figure for households making between $50,000 and $100,000 was 64 percent, while just 44 percent of those earning more than $100,000 believed they were falling behind.
And this is with nearly half of the state’s households (46 percent) having two or more incomes, including 29 percent of those earning below $50,000 a year, 48 percent of those earning $50,000 to $100,000, and 72 percent of those earning more than $100,000.
What is striking is that two-thirds of two-income households say they need the extra money to meet monthly living expenses, 8 percent cite savings, 7 percent cite school costs, 5 percent cite health care and 3 percent cite child care.
What happens when relying on two incomes isn’t possible, as is the case for single-parent households, which make up about one in 10 families in the state? Those families tend to fall farther and farther behind (the poverty rate among households headed by single women was a disturbingly high 27 percent in 1999, according to the Legal Services of New Jersey).
That makes it nearly impossible for the poor to improve their economic plight.
"(M)any of the state’s households require multiple incomes to keep afloat," the institute said in its release, "and fewer than half have saved enough money to cover their living expenses in an emergency."
It’s easy to see why. Housing costs have risen precipitously in recent years, with Kendall Park ranches selling in the high $300,000s (and, in some cases, the low $400,000s) that’s a 25 percent to 30 percent increase in the last half dozen years. Rental costs are rising, as well (as an example, two-bedroom apartments in Royal Oaks go for between $1,200 and $1,400 a month).
And there are other costs, as well. Milk prices have risen from an average of $3.60 a gallon in 2006 to about $3.65 for the first six months of 2007, according to the U.S. Department of Agriculture. And they are expected to continue climbing, perhaps more steeply, for the rest of the year along with most of the rest of our groceries.
Gas prices are in flux, jumping between about $2.75 and $3 per gallon for regular, while heating and electric are also on the rise.
This is why the average consumer appears to have a different sense of the economy than the economists who tend to be quoted on the business pages. While many economists are touting positive indicators, the Conference Board, a business research organization, announced Tuesday that its index of consumer confidence was at its lowest point of the year and had dropped for the third time in four months.
My confidence has been dropping, as well, along with the balances in my bank accounts.
Hank Kalet is managing editor of the South Brunswick Post and The Cranbury Press. His e-mail is [email protected] and his blog, Channel Surfing, can be found at www.kaletblog.com.