Study says more than 3 million New Jersey residents struggle to afford basic needs

Legal Services of New Jersey says the federal poverty measure dramatically understates hardship in one of the nation’s most expensive states.

More than 3 million New Jersey residents struggled to afford basic necessities in 2024, more than three times the number officially counted as living in poverty under the federal government’s decades-old poverty measure, according to a new report from Legal Services of New Jersey’s Poverty Research Institute.

The report argues that the federal poverty level significantly understates economic hardship in high-cost states like New Jersey because it does not account for regional differences in the cost of housing, child care, transportation, and other essentials.

The U.S. Census Bureau reported that about 859,000 New Jersey residents, or 9.2% of the state’s population, lived below the federal poverty level in 2024. But the institute estimates that roughly 3.09 million residents, or 33.1%, lived below what it calls the state’s “True Poverty Level,” a cost-of-living-based measure intended to reflect the income families actually need to afford basic necessities.

“The hard reality is that poverty remains deeply entrenched, with millions left behind, a paradox for a state considered among the wealthiest in the nation,” Shivi Prasad, director of the Poverty Research Institute, wrote in the report.

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Researchers estimate that more than 2.2 million New Jersey residents experiencing financial hardship are not counted as poor under the federal standard.

The federal poverty threshold applies the same income standard nationwide regardless of where a family lives. In 2024, a family of three with two children was considered poor if its annual income fell below $25,273.

The report argues that the threshold bears little resemblance to the cost of living in New Jersey. The median annual rent for a two-bedroom apartment reached $22,620 in 2024, leaving just $2,653 before taxes to cover food, transportation, health care, child care and every other household expense for an entire year.

Researchers also note that New Jersey had the third-highest overall prices in the nation in 2024, behind only California and Massachusetts, according to the U.S. Bureau of Economic Analysis. Housing costs have increased faster than the federal poverty threshold in recent years, widening the gap between official poverty statistics and the cost of meeting basic needs.

The institute’s True Poverty Level estimates the minimum income families need to afford basic necessities without public or private assistance. Researchers found that New Jersey households need, on average, about three times the federal poverty level to avoid economic deprivation.

The report found the largest gaps between the two measures among children and older adults.

Researchers estimate that more than 823,000 New Jersey children, or 40.8% of the state’s children, lived below the True Poverty Level in 2024, compared with about 236,000 counted as poor under the federal measure. Nearly 590,000 children experiencing economic hardship were not reflected in the federal poverty statistics.

Among working-age adults, researchers estimate nearly 1.68 million lived below the True Poverty Level, compared with about 461,000 under the federal standard. For residents 65 and older, the report estimates about 585,000 seniors lived below the True Poverty Level, compared with about 162,000 counted under the federal measure.

The report also found significant disparities by race and ethnicity. Researchers estimated that 54% of Hispanic residents and 44.1% of Black residents lived below the True Poverty Level in 2024, compared with 23.2% of non-Hispanic white residents and 20.3% of Asian residents.

Among children, the estimated True Poverty rates were 62% for Hispanic children and 58.4% for Black children, compared with 25.1% for non-Hispanic white children and 20.5% for Asian children.

The report argues that relying on the federal poverty measure can distort public understanding of economic hardship because it is also used to determine eligibility for many assistance programs.

“A flawed measure, especially one that understates poverty, leads to misinformation and lack of understanding regarding the magnitude of hardships faced by low-income residents in a high-cost state,” the report says. “Many individuals struggling to make ends meet will not be considered as needing assistance, their economic hardships will remain hidden, and their daily struggles will not receive the attention they deserve.”