February 15, 2016: How Equal are New Jersey’s Towns and Cities?

In this post we will explore the degree of income inequality seen in New Jersey’s municipalities[1]. Using the same process as in our previous analysis where we explored the Gini Index and 80/20 Household Income Ratio of US counties, here we can get a more granular view of inequality seen within our counties.

Using the interactive map and table feature below, we can see the Gini Index, the 80/20 Household Income Ratio, and the income limits for the 20% and 80% cutpoints for every New Jersey municipality. This information, along with margins of error are displayed when hovering over or clicking a municipality on the maps. Options for filtering the maps and table are found on the right-hand side of the feature.

Remembering the results of last week’s post, Essex County was not only the most unequal county in New Jersey, in terms of its Gini Index and 80/20 Household Income Ratio, but it was one of the most unequal in the country. When we use the County filter to select only the municipalities in Essex County, we can see which municipalities are responsible for such a high degree of inequality. Montclair Township has the highest Gini Index and 80/20 Household Income Ratio of any municipality in Essex County.

The same relationship between population and inequality seen with counties is also seen when observing municipalities; that is, very small towns are likely to occupy the highest and lowest inequality extremes. We can adjust for this issue by filtering by a population range in the interactive feature. Even restricting results to an arbitrary limit of 25,000 population to provide a proxy for towns of large size provides interesting results. Filtering in such a manner shows Montclair as having the highest Gini Index and the seventh-highest 80/20 Ratio of all towns in the state above this population threshold, while Camden takes the top spot for highest 80/20 Ratio.

Another interesting observation gained from exploring the inequality of Essex County municipalities is that, while Montclair may be considered one of the most unequal large towns in the state, most other towns in Essex County do not express high degrees of inequality, relatively speaking. We can think of this as suggesting that while Essex County is home to households near both extremes of the income spectrum, households in most towns throughout the county tend to fall closer to one extreme or the other. We can view this in more detail when we observe the upper household income limits at 20% and 80% on the income scale in the interactive table. While Newark, at roughly middle of the pack in terms of inequality of Essex County municipalities, may be home to some of the poorest households in the county, it also has one of the lowest 80% household income values in the county. The opposite is seen in North Caldwell, one of the more equal towns in Essex County. While North Caldwell is home to some of the richest households in the county, it is not home to many poorer households. North Caldwell’s 20% household income limit is the highest in the county by a wide margin, and households at the top of the fourth income quintile earn “only” 2.73 times more than households in the bottom quintile. While North Caldwell certainly seems equal by these measures, analyzing the household income seen at these important cut points can help us not only identify areas where income is shared equally or unequally, but also where equality can mask areas of exclusion.

Use the interactive feature to explore the equality in your town and find your own interesting observations.

Author: John Manieri, AICP 

Research and Technical Assitance: Steve Scott

 

[1] We used municipalities in this analysis rather than neighborhoods (census tracts) due to the high margin of error associated with income quintile limits seen at the census tract level. Margins of error for municipalities’ Gini Index and 80/20 Household Income Ratio are displayed in the interactive map feature. 

Data Sources: 

U.S. Census Bureau. 2010-2014 5-year American Community Survey. Table B19080

U.S. Census Bureau. 2010-2014 5-year American Community Survey. Table B19083