From the Record:
New Jersey’s six-year reign as the state with the highest household income is over, according to U.S. Census Bureau data released Tuesday.
The state, with a median household income of $64,500, is now second to Maryland, according to the data, which also showed a decline in New Jersey’s household and individual spending power.
Workers and households have less spending power than in 1999, after the figures are adjusted for inflation, the data show.
Bergen County’s inflation-adjusted median household income, for instance, has fallen from $80,800 to $75,900 since 1999, the data indicate. Passaic’s median income fell from $61,000 to $49,900.
The data also show New Jersey’s median household income rose by $600 in 2006 compared with the year before, after adjusting for inflation — only the second increase in the last six years.
The data release came amid a growing debate over the state of New Jersey’s economy, and whether it can continue to provide the high incomes and quality of life its residents are accustomed to.
Critics say New Jersey’s regulations, taxes and red tape put it in danger of losing the competition with other states for corporate relocations and expansions, and the new jobs that go with them. The state has added 15,400 jobs so far in 2007, a slower job creation pace than in 2006.
Hughes and another Rutgers economist, Joseph Seneca, argue that the state is creating higher-paid jobs at a much slower rate than low-paid health, hospitality and other positions.
Seneca said that could explain the decline in individual earnings, which include only salaries and wages. Median earnings in 2006 dropped to $35,500 from $36,700 in 2005.
He said the growth in household income likely reflects the strength of investment gains in 2006, because the data include dividends, capital gains, interest and other non-salary income.
“It indicates again an income profile that is one of the highest in the nation,” but is vulnerable to volatility in the financial markets, he said.
The state’s median household income rose to $64,500 in 2006, an increase of about 1 percent. That trailed the national rate, which rose by 1.7 percent as inflation-adjusted median household income increased from $47,700 to $48,500, the data show.