The state of New Jersey has a total population of just over 7.7 million people (Table 1.1). Of that total, about 74% is White, 13% is African-American, just under 10% is Hispanic, almost 3.4% is Asian, and less than 0.3% is other races7, 8. Across commuting zone, racial composition varies substantially from the state average: Commuting Zones #1 and #2 are about 8% above the state average for percent of population that is African-American (13.9% and 13.8% respectively); in contrast, Commuting Zone #3 is only 5.8% African-American almost 55% below the state average.
There is also great variation from the state average at the county level. Essex county, in northern New Jersey, has the largest African-American population: It is nearly 40% African-American (209% above the state average). Union and Mercer counties have African-American populations just over 18%, about 42% above the state average of 12.8%. Hudson, Essex, Passaic, and Union are well above the state average for Hispanic population. These four counties in northern New Jersey (Commuting Zone #2) have a combined Hispanic population of 437,499 persons. With 53,501 people, Bergen county, has the largest Asian population. This represents 6.5% of the county population, and is 91% above the state average. Hudson and Middlesex counties have very high percentages of Asians, 6.4% and 6.5%, respectively, compared to the state average of 3.4%. It is likely that further disaggregation would reveal even stronger differences at both the city and census tract levels.
Several counties consistently appear at the top of the list of distress indicators. Cumberland, Salem, and Cape May in southern New Jersey are in the top five most distressed counties in per capita income, median family income, percent minorities with less than a high school diploma, African-American household income, and unemployment rates (Summary Tables A & B.) Atlantic county also fares poorly in these measures, with distress ratings only slightly better than the worst three. In the tables Persons Living in Poverty and Females Living in Poverty, which are sorted by absolute numbers rather than percent relative to the state, Essex, Hudson, Union, Passaic, and Camden counties are the worst off. The first four of these counties are in northern New Jersey; they are generally considered part of the New York metropolitan area. Although there is variation in the details, the basic situation for the state of New Jersey can be summarized as follows: Commuting Zone #1 (the southern counties) suffer the highest rates of distress, while Commuting Zone #2, especially the northern counties close to New York City, have the highest absolute numbers of people living in distressed counties.
Average per capita income for the state is $18,714 (Table 2.1); ten counties are more than 10% below the average. Three counties -- Cumberland (-33%), Salem (-25%), and Hudson (-23%) -- are more than 20% below the state average. Similar statistics apply for median family income. Cumberland, Hudson, and Cape May are 25% below the state average of $47,589. Salem, Ocean, Atlantic, Camden, Essex, and Passaic constitute a second tier of low median family income: These counties are between 10% and 20% below the state average.
An examination of percent of persons living in poverty reinforces the per capita income differences. Essex and Hudson counties (Commuting Zone #1) have poverty rates almost twice the state average (14.3% and 14.8% respectively, compared to 7.6% for the state). Essex and Hudson counties are numbers one and two respectively in the total number of persons living in poverty. Passaic is fourth. Together these counties have over 242,000 people living in poverty and account for 42% of the state's poor. It is interesting to note that at the county level, Essex is only 6% below the state's average per capita income (11th worst) and about 12% below the state's average median family income (8th worst), but ranks first in total number of persons living in poverty (108,940 persons in poverty or 14.4% of the county population; see Table 3.1).
At the commuting zone level the picture is more complex. Of the eight counties above the state's per capita income, seven are in Commuting Zone #2; of the ten counties above the state's median family income, eight are in Commuting Zone #2. These conditions also apply to African-Americans in Commuting Zone #2. Of the ten counties with African-American average household income9 above the state average, eight are in Commuting Zone #2. Thus Commuting Zone #2 fares well relative to the other two commuting zones, despite the severe problems in some of its northern counties.
Income measures and poverty vary substantially by race and ethnicity. Per capita income for New Jersey's White population is $20,406: This is 90% above per capita income (PCI) for Hispanics ($10,761); 77% above PCI for African-Americans ($11,542); 42% above Native American PCI ($14,423); 14% above PCI for Asians ($17,913); and 228% above PCI for other races ($8,956). The data on average household income by race (Table 6.2) contrasts with per capita income. Asians have the highest average household income in the state ($62,629) and White households rank second at $53,281 reversing their order from the PCI data. This reversal of order was also found for average household income for Hispanics and African Americans. Hispanic average household income was higher than for African-Americans in the state, $36,349 and $35,135, respectively contrasting with their order in PCI. Income disparities are particularly wide in certain counties and for specific minorities. Within Essex, per capita income for Whites is $23,802 -- 217% above African-American PCI ($10,940); 262% above Hispanic PCI ($9,066); and nearly 300% higher than PCI for other races ($7,992). White PCI in Essex is also 16% above the state PCI for Whites. In Hunterdon, which has a per capita income of $23,236 (for all persons), PCI for African-Americans is $8,407, 280% below PCI for Whites ($23,581). PCI for Hispanics in Salem county is less than half of PCI for Whites ($6,275 compared to $14,951), and only one-third the state's average PCI for all persons. With the exception of Essex County, African-American PCI is highest in those counties which have the highest White PCI. Illustratively, Morris county, which has the second highest White PCI in the state ($25,806), has the highest African-American PCI ($17,823). Somerset county follows with the second highest African-American PCI at $17,381, and the highest White PCI at $25,966. Bergen county follows the trend: African-American PCI is $16,623, while White PCI is $24,963.
Poverty rates also vary by sex. Nearly 60% of all persons living in poverty in the state are female (Table 3.5). At the state level, 343,111 women live in poverty, 98,688 under the age of 17. In contrast, 230,041 men live in poverty, 102,038 under the age of 17. In percentage terms, 8.8% of women in the state live in poverty, while for men the figure is 6.3%. Worth noting is Cumberland County: 14.6% of females live in poverty, compared to 11.3% of men. Women 65 and over living in poverty constitute more than 82% of all persons of that age group in poverty. Notably, percent differences between men and women also tend to be greater in counties with higher poverty rates. As a percentage of the state total, Salem county's poverty rate is 12.5% for women and 8.5% for men (Tables A., 3.3, 3.4). In contrast, for Monmouth and Ocean counties with poverty rates below the state average (5% and 6%, respectively), the difference between male and female poverty is closer to two percentage points. In general, areas with higher poverty rates also have larger differences between percentage of females and males living in poverty, e.g., Essex and Hudson counties.10
Places with low levels of educational attainment face an especially steep hill with respect to job creation. The situation is exacerbated for minorities, who frequently have educational attainment levels even lower than the population average. The table Minorities with less than a High School Diploma (Table B) shows that almost one third (32.2%) of minorities over age 25 lacked a high school diploma. Therefore, the number of minority persons (non-White and over 25) with less than a high school diploma is an important challenge for potential job creation vehicles. While the rates of this indicator for the southern counties are very high, their absolute value is substantially lower than for many other counties, especially those in Commuting Zone #2. Excluding Camden county, the four southern counties that had the highest absolute percents (ranging from 51% to 36.7%) without a high school diploma -- Cumberland, Cape May, Salem and Atlantic, had a combined population of 26,000 persons falling into this category. In contrast, Passaic county has more than 30,000 minorities over 25 years of age with less than a high school diploma (43.7% of the county minority population for this category.) Essex county has nearly 80,000 minorities over 25 with less than a high school diploma (35.8%.) The five western counties -- Warren, Sussex, Hudson, Morris, Somerset, and Hunterdon -- have much better numbers for educational attainment for minorities (both relatively and absolutely). In fact, their combined population of minorities over 25 with less than a high school diploma is 8,395 persons. Despite achieving better than state average educational attainment for the minority populations in the county, Union and Bergen together still have more than 34,000 minority persons with less than a high school diploma.
As suggested above, the unemployment rate for a county is likely to be associated with the education level of its population, with one important exception. The unemployment levels reported here do not include those people listed in the Census as "not in the labor force."11 The counties with the worst unemployment rates (in 1989) are Essex (8.8%), Hudson (8.8%), Cape May (7.5%), Cumberland (7.4%), and Passaic counties (7.1%); each had unemployment rates more than 24% above the state average of 5.7%. Essex and Hudson were more than 50% above the state average. In addition, these two counties had 360,000 persons listed as "not in the labor force."
Labor force participation is 76.7% for males and 59% for females in the state as a whole (Table 4.1). Male rates range from a high of almost 83% in Sussex county to lows of 66% in Ocean county and 67% in Cape May county, due to their large proportions of retirees. For females, the rates are much lower than males, and the percents range from a high of 65% in Somerset county to a low of 47% in Ocean county. Participation rates vary among the races (Tables 4.2 - 4.6). For males, labor participation rates are: 83.1% for Asians; 81.3% for Hispanics; 81.2% for other races; 77.2% for Whites; and 70.1% for African-Americans. For females, the numbers are: 64.9% for African-Americans; 62.8% for Asians; 61.9% for Hispanics; 61.5% for other races; and 57.5% for Whites.
Unemployment indicators reveal the disparities within Commuting Zone #2 and the state. While the northern counties -- Essex, Hudson, and Passaic -- are well above the state's unemployment rate, the western counties -- Warren, Sussex, Morris, Somerset, and Hunterdon -- are at least 24% below the state average. In the south, Cape May (7.5%) and Cumberland (7.4%) had high unemployment rates.
The previous sections have attempted to provide a statistical snap shot of New Jersey counties. In this section, these findings are related to the New Jersey Department of Labor's (D.O.L.) state and county level projections of non-agricultural employment growth to the year 2005.12
The D.O.L. projects non-agricultural employment for the state to grow at an average of 0.9 percent per year from 1990 to 2005. In the Department's report, the slowest employment growth rates generally occur among the counties in northeastern New Jersey. They estimate the slowest percentage employment growth for the counties of Essex (0.03) and Union (0.15). These two counties are among the five counties that are worst off based on the absolute numbers of Persons Living in Poverty and Females Living in Poverty. The other three counties in distress according to these indicators and their estimated annual percentage employment growth are: Camden (0.9), Hudson (0.5), and Passaic (0.4). Camden's estimated growth is approximately equal to the overall state average, but Hudson's and Passaic's growth rates are below average.
Hudson, Essex and Passaic are also worse than the state average in Per Capita Income and Median Household Income. The other counties that are below average in these two indicators and their estimated percentage employment growth rates are: Atlantic (0.9), Camden (0.9), Cape May (1.1), Cumberland (0.7), Ocean (1.9), and Salem (0.5).
The worst 1989 unemployment rates were in Cape May, Cumberland, Essex, Hudson and Passaic counties. Cumberland, Essex, Hudson and Passaic counties, also, have below average projected employment growth rates. These four counties not only had the worst state unemployment rates in 1989, they are expected (according to the D.O.L. report) to experience below average employment growth rates through the year 2005.
Some reasons why these counties are distressed and projected to have low employment growth rates through 2005 may be found in the portfolio of industries contained in each county. The D.O.L. estimates that the slower employment growth is explained by the relatively high concentration of manufacturing employment in certain counties including Essex, Hudson, Passaic and Union. The D.O.L.'s projections show expected employment losses over the period 1990 to 2005 in the goods-producing sectors (which includes manufacturing.) In addition, about 70 percent of the projected lost manufacturing jobs are located in the northern New Jersey counties that include Bergen, Essex, Hudson, Passaic and Union counties.13 Nonetheless, this does not entirely explain their slow growth projections. For example, Warren county with 13.1% of its jobs in manufacturing is projected to grow at the state average. Hunterdon county with 11.8% of its jobs in manufacturing is projected to grow at 2.3% per year through 2005.
Camden, Cumberland and Salem counties are expected to have relatively high growth in the government, manufacturing and construction sectors. These counties also have high employment levels in the categories of marketing and sales, precision production, craft and repair. Atlantic, Cape May, and Ocean counties have high concentrations in the service and retail trade sectors that are expected to grow relatively faster than other sectors.
However, the wage scales in the fast growing services sector are often lower than in the shrinking manufacturing and other goods-producing sectors. To the extent that the working population of a county also works within the same county, the county concentrations of industry sectors and their associated wage scales can (at least in part) explain why particular counties are considered to be distressed, to have high unemployment rates, and to have high percentages of persons living in poverty.
The two Summary Tables of Indicators for New Jersey, the 3 Commuting Zones, and the 21 Counties show the counties ranked by the level of distress, with the most distressed located at the top of each table. Comparison of these ranked distress levels with the D.O.L.'s information on industry sector concentrations reveals the following conditions for the most distressed counties. The five counties with most of the projected manufacturing job losses (Bergen, Essex, Hudson, Passaic, and Union) are also among the seven most distressed counties in terms of their percentages of absolute number of New Jersey Persons Living in Poverty and Females Living in Poverty. Essex, Hudson, Passaic, and Union are also among the six counties with the highest state unemployment rates according to the 1990 Census data. Passaic, Hudson, and Essex, are among the counties with the highest percentages of Minorities With Less Than High School Diplomas.
To repeat, Atlantic, Cape May, and Ocean counties have high concentrations of service and retail trade sectors, which are projected to have relatively faster growth rates. These counties also had relatively high Unemployment Rates and Minorities With Less Than High School Diplomas. Ocean, Atlantic, and Cape May rank ninth, eleventh and sixteenth, respectively, in terms of their percentages of absolute number of New Jersey Persons Living in Poverty and Females Living in Poverty.
Camden, Cumberland, and Salem counties (with the highest projected growth rates in the government, manufacturing, and construction sectors) rank third, twelfth and seventeenth, respectively, in terms of their percentages of absolute number of New Jersey Persons Living in Poverty and Females Living in Poverty. Cumberland ranks highest in terms of Minorities With Less Than High School Diplomas. Salem is third, and Camden is sixth, in this category of distress.
There are often synergies and economies of scale that can be achieved through specialization in one employment sector. Similar businesses can use the same infrastructure and be closer to resources or to customers. On the other hand, there are portfolio effects from a diversity of employment sectors within a county or a commuting zone. Specialization in one sector, in comparison to diversification over different sectors, may to lead to higher volatility of employment rates over economic cycles.
Further analysis of the relationships among the indicators for distress and the economic environment (including industry concentration and diversification, and associated wage scales) of the New Jersey counties would be useful. That analysis may provide additional insights into questions such as why some counties are distressed (according to the Census data) and are also expected to have below average employment growth through 2005 (according to the D.O.L.'s report), and why other distressed counties are expected to have above average employment growth.
The above findings lead us to conclude that there are nine counties in New Jersey that are particularly distressed. From north to south, they are: Hudson, Essex, Union, Passaic, Cumberland, Camden, Atlantic, Salem, and Cape May. The first four, in northern New Jersey, are in Commuting Zone #1; the second four, in southern New Jersey, are in Commuting Zone #2. As noted earlier, absolute numbers make the northern counties the most troubled. Relative percents bring the southern counties to the top of the "most distressed" list.
These conclusions are based on several factors. These counties have the lowest median family incomes in the state. Passaic, the distressed county with the highest median family income in this group, is still almost 10% below the state average. Cumberland, with lowest median family income, is 27% below the state average. Six of these counties also have the lowest average household income for African-Americans, more than 12% below the state average household income for African-Americans. Five of these counties had unemployment rates (in 1989) more than 25% above the state average. Eight of these counties ranked highest in minorities with less than a high school diploma -- all with more than 35% of the minority population over 25 having less than a high school diploma.
Nonetheless, there are silver linings to be found in these overcast economies. The next section examines eight of these counties more closely. We explore additional data to help the FUND realize its opportunities in these areas.
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