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Retraining Program Helps Former Employees of Big Pharma Get Back to Work

Ed Silverman | March 18, 2013

New Jersey Department of Labor focuses on folks who lost jobs in latest round of consolidations and relocations

In the latest bid to salvage the local life-sciences industry, the New Jersey Department of Labor has begun a worker retraining program that is designed to retain some of the people who lost their jobs during the recent wave of consolidations and relocations by big drugmakers.

The effort, which is being financed with $980,000 from of a $3.6 million federal grant that was awarded to the state three years ago, can be applied to any former pharmaceutical industry employee -- not just scientists -- who lost jobs at Merck, Pfizer, Bristol-Myers Squibb, Johnson & Johnson, and Roche.

Over the past four years, the Garden State has been ravaged by upheaval among big drugmakers. After Merck purchased Schering-Plough, and Pfizer bought Wyeth, thousands of layoffs ensued, and New Jersey was hit particularly hard, since all four drugmakers were headquartered here. J&J also cut jobs. And Roche, meanwhile, recently abandoned its 119-acre facility in Nutley and shed some 1,000 jobs.

“The idea is to get these folks back into the industry as soon as possible,” says Jeff Flatley, director of workforce portfolio and contract management at the Department of Labor. “Whether it's finance or marketing or whomever, those jobs are going to be needed in another company just as much. There are no stipulations.”

The move comes as the shelves in the nation’s medicine chest -- a slogan that New Jersey has used for decades to describe itself - are looking increasingly bare. As evidence, the New Jersey and New York City region has dropped significantly in the national ranking of the life-sciences market, according to a recent report on commercial real estate.

Last year, the region slipped to seventh place among metropolitan life sciences cluster from second place in 2011. The reasons cited for the slide include ongoing consolidation following the big mergers and concerted efforts by other cities, notably San Diego, to offer competitive environments. And the big life-sciences hub in Boston remains attractive to companies and workers alike.

As of last fall, the number of jobs associated with drug manufacturing and related activities in the state had fallen 21 percent to about 30,000 from 2001, according to the U.S. Bureau of Labor Statistics. Meanwhile, New Jersey employs less than 12 percent of all pharmaceutical-related jobs in the country, down from 21 percent in 1990.

With this in mind, state officials are hopeful they can prevent a further brain drain. Toward that end, the retraining program will reimburse each employer for up to 50 percent to 90 percent of the salary paid to a newly trained worker for up to six months -- to a maximum of $14,000. The grant, which applies to any company not just life-sciences firms, expires on September 30.

Although recent trends are sobering, state officials say they are encouraged by signs that so-called second-tier companies are willing to locate operations here. One prominent example is Allergan, which makes the widely used Botox treatment, and last fall agreed to open an R&D center in Bridgewater and create nearly 390 jobs over the next decade in exchange for tax incentives.

Another area of promise is biotechnology. There are more biotechs with operations in New Jersey each year. From 2010 to 2012, the number increased more than 13 percent, to 340 companies, which now employ an estimated 16,400 people, according to the most recent report from BioNJ, the local trade group, and the Ernst & Young consulting firm.

“In general, this industry goes up and down and the companies are all over the place. It can be tough to gauge,” says Flatley. “But clearly, biotechs are part of the focus. They typically are small and have 25 to 75 employees, which is not a lot. But they may hire 20 people at a clip. And the program does, of course, include higher-skilled workers.”

Just the same, the program is likely to have only a modest impact, if only because the grant will cover between 100 and 120 new hires. The retraining can certainly make a huge difference to the individuals who benefit, but with thousands of laid off workers in recent years, the effort amounts to the proverbial drop in the bucket, says one long-standing observer of the state economy.

“There’s so little job training here, in general, that almost anything is better than nothing,” says Norman Glickman, an economist and an urban and public policy professor at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “And $14,000 is not nothing, but it’s not very much for what needs to be done, which is a massive retraining of New Jersey workers.

“The industry has shifted and abandoned the state, and more people are getting rehired in new locations," Glickman continues. Grants won’t fix the problems. You can train people all you want, but if companies are no longer here or continue to reduce employment, what’s the end result? But with biotech, that’s a reasonable hope and it might work. But unfortunately, it’s a drop in the bucket.”

Ed Silverman is the founder and editor of the Pharmalot website, which tracks the pharmaceutical industry.

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