Rutgers study: Inflation impacts all in NJ, but Black and Hispanic residents most

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The Rutgers Center for Women and Work recently published a new report that examines an issue we have all felt over the past few years – inflation – and who was hardest hit by price increases here in the Garden State.

The study, “Who Experienced the Greatest Financial Burden from Inflation in New Jersey? An Examination of Spending, Earnings, and Employment,” was authored by Rutgers University researchers Jocelyn Fisher and Yana Rodgers with support from the New Jersey State Policy Lab and released Nov. 13.

In compiling the report, the researchers analyzed federal data on employment, earnings and spending in the New York-Newark-Jersey City and Philadelphia-Camden-Wilmington metropolitan areas.

“We find that the decades-long-high inflation levels affected all groups of New Jerseyans. Regardless of race/ethnicity or gender, all groups were hit hard by inflation because many of their purchases were on types of products that grew the most in price,” the authors wrote. “Moreover, most groups’ employment rates declined in 2020 and did not fully recover until 2022, whereas inflation levels first started to soar in 2021. Finally, a high percentage of all groups reported stress induced by price increases.”

The researchers found evidence that all groups of Garden State residents have not been adjusting to increased prices.

“The percentage of New Jerseyans reporting difficulty paying for usual household expenses, food insufficiency, and various methods of meeting spending needs have remained rather steady since September 2022, even though inflation levels have slowed,” the authors noted. “Nevertheless, we find substantial evidence that demographic groups systematically faced different financial costs of inflation along lines of race/ethnicity and gender.”

Economic disparities

The report found that Black and Hispanic New Jerseyans face a “strikingly consistent disadvantage” in their ability to absorb price increases.

“This report points to the need for a strong social safety net in New Jersey, especially for vulnerable households,” said Rodgers, economist and faculty director of the Rutgers Center for Women and Work. “Non-white households take a harder hit because they have lower average incomes to shield them from inflation, and because they spend relatively more on products and services with the highest price increases.”

Some other notable findings include:

• 65% of New Jerseyans struggled to pay for basic household expenses
• 39% experienced food insecurity in 2021 and 2022, even as inflation levels slowed
• Black men and Hispanic women had lower employment rates than white men and white women
• Men-headed households were more affected by inflation than women-headed households, but their higher average incomes helped them to cope more easily
• Women – in general – faced a higher overall burden than men due to lower employment, lower average earnings and more difficulty paying for expenses
• Asian women also experienced a degree of disadvantage

“In summary, we find evidence that all groups of New Jerseyans were affected by inflation, but Black and Hispanic men and women as well as Asian women to some extent were especially affected, as were women in general,” researchers wrote. “New Jersey state and local government can support New Jerseyans as they adjust to these higher prices by strengthening short-term public supports and can work toward longer-term solutions for reducing disparities in economic vulnerability.”

“Examining the ways inflation has impacted all of us, and which groups have been hit hardest, is a necessary first step,” said Elizabeth Cooner, executive director of the New Jersey State Policy Lab. “Developing policies to address these inequities and support all New Jerseyans is critical.”

The full report can be found here.