Last year was a banner year for job growth in New Jersey, with the addition of more than 60,000 private-sector jobs. But despite that improvement, the state still has some more work to do to reach the employment level that was measured just before the Great Recession.
According to a new analysis of federal data by The Pew Charitable Trusts, New Jersey remains among the states that are still trying to get back to the employment rates that were recorded at the end of 2007. The United States as a whole is also not all the way back when it comes to the employment rate, according to Pew’s analysis.
The figures are out just as Gov. Chris Christie has been touting the state’s ongoing economic recovery from the Great Recession, as well as other setbacks like 2012’s Superstorm Sandy and the continued decline of the gambling industry, which has hit Atlantic City particularly hard. Though the economies in many other states improved at a faster rate than New Jersey’s after the recession ended, raw jobs numbers indicate New Jersey has now gained back all of the jobs that were cut during the recession. But the employment rate, which measures a specific slice of the state’s population, suggests there is still some more room for improvement.
The new employment-rate figures also come out as state business leaders have been focusing on ways to further improve the New Jersey economy through workforce-development initiatives and by making the state more affordable in general, particularly for millennials who now outnumber baby boomers.
While the unemployment rate tends to get the most media attention as a measuring stick for economic performance, some economists also look closely at the employment rate, which focuses only on those between the ages of 25 and 54. The employment rate, which is an employment-to-population ratio, also captures those who have quit looking for a job, while the unemployment rate 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.
In New Jersey, the employment rate as of the end of last year was 78.6 percent, up a full percentage point from the year before, according to Pew. It also brought the rate closer to the 80.3 percent rate that was measured at the end of 2007, and Pew’s analysis indicated that the difference is not one that is “statistically significant.” By contrast, the U.S. employment rate of 77.9 percent at the end of 2016 was a full two percentage points behind the rate measured at the end of 2007, the analysis said.
In the grip of the Great Recession
As the recession took hold in New Jersey, the state’s employment rate declined by three percentage points to 77 percent at the end of 2009. It remained at that level through the end of 2011, and then reached a low point of 75.6 percent in March 2014. The rate eventually rose back to 77.6 percent by the end of 2015, and then to 78.6 percent by the end of last year.
That recent trend is in line with new federal jobs data released last month that indicated New Jersey had a banner year for job growth in 2016, with 60,800 private-sector jobs added through the end of December. And though monthly jobs reports are subject to revision, preliminary figures for 2017 also suggest more improvement, including the addition of a combined 28,200 private-sector jobs during the months of January and February.
New Jersey’s unemployment rate also dropped to 4.4 percent in February, below the 4.7 percent national average for the same month. (The U.S. unemployment rate improved to 4.5 percent last month, but updated jobs data for New Jersey have yet to be released.)
Christie, a second-term Republican who is now in his last year in office, has been pointing to the state’s overall improving economic outlook to make the case that his policies, including a series of tax cuts enacted during his tenure, are playing a leading role.
Last year, Christie and lawmakers agreed on a package of tax cuts that included a lowering of the state sales tax and a phase-out of New Jersey’s estate tax. That effort followed a series of business-tax cuts enacted during his first term, including making technical changes to the tax code to benefit small businesses and adding incentives like changing the single-sales factor formula to encourage more business investment in New Jersey.
A seven-year plan
“What you’re seeing is the effect of seven years of policies now going into effect and an improving national economy as well,” Christie said during an event that was held last month in Englewood Cliffs, where LG Electronics is expanding its national headquarters.
“This didn’t happen by accident,” Christie went on to say.
Asked about the small gap that still remains between the state’s employment rate in 2007 compared to the end of last year, Michele Siekerka, president and CEO of the New Jersey Business & Industry Association, said some New Jersey companies have open positions but are having a hard time finding workers with the right technical skills to fill them. Sometimes the job opening requires a training certificate that can be earned in a year, or skills that can be learned at a two-year community college, she said.
Siekerka also said the time has come to change the perception that it takes a college degree to get a good-paying position. In New Jersey, a job in the trades, like an electrician’s position, can bring with it a very good salary, she said.
“Going into the trades is a future and a very healthy future,” Siekerka said.