Last year was New Jersey’s strongest for private-sector job growth in more than a decade, but despite that improvement the state’s employment rate is still slightly worse than it was just before the last recession.
That makes New Jersey one of 22 U.S. states still seeing employment rates lower than they were in late 2007 before the Great Recession, according to a new analysis released this week by The Pew Charitable Trusts.
The new data from Pew’s “Fiscal 50” survey comes amid an ongoing debate in Trenton over the best way to maintain New Jersey’s slow but steady economic growth since the last recession.
Gov. Chris Christie has called for tax reform, including a repeal of New Jersey’s estate tax, to help keep the momentum going.
But Democratic legislative leaders are pushing for more investment in higher education and transportation infrastructure, and the establishment of a $15 minimum wage to keep the state economy growing.
Some economists prefer to focus on the employment rate instead of the unemployment rate because it takes into account those who have quit looking for a job, while the unemployment rate – which typically generates more media attention — does not.
The employment rate can also be a meaningful economic indicator for state policymakers because changes can affect “both sides of a state’s budget ledger,” according to the Pew analysis. That’s because more people working typically translates into more tax revenue , while a lower employment rate can lead to more demand for state-funded safety-net programs.
Pew’s researchers looked specifically at those between the ages of 25 and 54 – considered to be the prime working years for adults – over the last eight years.
In New Jersey, the employment rate for 25- to 54-year-olds was 80.25 percent in December 2007, but it had dropped to 77.3 percent by December 2009. It then fell to a low of 75.6 percent in March 2014, before eventually rising to 77.6 percent by the end of last year.
That means New Jersey’s employment rate as of 2015, despite the improvement, is still trailing the pre-recession employment rate by 2.6 percentage points, according to Pew.
In neighboring New York, the employment rate at the end of 2015 was 76.3 percent, still 1.9 percentage points off its pre-recession rate. The employment rate in Pennsylvania at the end of 2015 was 78.7 percent, 1.8 percentage points less than before the recession.
But Pew’s researchers cautioned against drawing strong conclusions from state-by-state comparisons due to the margin of error in their analysis and their inability in some cases to gather statistically significant data.
Still, Pew’s new employment-rate figures for New Jersey generally follow the overall trend for the state when looking at the unemployment rate, which dropped to 5.1 percent in December 2015. New Jersey’s unemployment rate had peaked at 9.8 percent in January of 2010.
It also echoes a review of the state’s economic rebound that was included in a report attached to the results of a recent survey of New Jersey’s banking community. That report highlighted the addition of 64,500 private-sector jobs in 2015, more than double the 31,200 private-sector jobs added the year before.
In all, New Jersey has added 233,500 private-sector jobs since the end of the recession, the report said, putting the state closer to fully recovering all of the estimated 241,000 private-sector jobs lost in the recession. And less than one out of every 10 members of the New Jersey Bankers Association who responded to the survey said they’re expecting conditions in the state to weaken over the next six months.
But the nation as a whole has had a faster recovery from the recession than New Jersey, recapturing all of the jobs lost the last recession by March 2014, the report said.
The national employment rate as of the end of 2015, according to Pew, was 77.2 percent, still 2.7 percentage points below where it was in December 2007. The national rate dropped all the way down to a low of 75.06 percent in September 2011, before eventually rising back above 77 percent last year.
Pew’s earlier analysis of 2014 data showed there were 28 states with employment rates lower by statistically significant amounts than their pre-recession figures. That was down from 34 states in 2013, and 37 states in 2012.