From the Philly Inquirer:
Jobs in N.J. could use lift from Corzine growth plan
By James W. Hughes and Joseph J. Seneca
s 2006 comes to a close, jobs in New Jersey are at a record level, approaching 4.1 million. The state’s powerful core economy – pharmaceuticals, financial activities, telecommunications, and professional and business services – continues to generate high incomes, bolstering New Jersey’s position as one of the nation’s premier consumer markets.
However, the current decade has brought only minimal growth in the core economy. Jobs growth also has been lagging far behind the rest of the country. The jobs picture has been particularly disappointing this year, and likely will not be better next year.
To put this in perspective, on average 77,000 jobs a year were created during the last two expansions – the 83-month expansion from 1982 to 1989 and the 103-month expansion from 1992 to 2000.
The current New Jersey expansion – 54 months long as of next month – has not come close to approaching that annual pace of jobs growth.
In 2004 and 2005, the state added on average 40,000 jobs a year. During the first 11 months of this year, it did not attain even this modest pace of growth: New Jersey added jobs at an annualized rate of 21,000.
Why is this happening to such an affluent state?
Higher interest rates, volatile energy costs, a maturing national expansion, and a slowdown of housing activity slowed economic growth in New Jersey this year from the already below-average pace of the previous two years.
But in recent years, growing problems of housing affordability, declining business cost competitiveness, undisciplined state finances, and a lack of public-policy focus on the economy also have taken their toll.
In the 1990s, we had the comfortable notion that New Jersey had an unusually talented labor pool, and that the Information Age economy was willing to pay our high costs to access that pool.
However, intensifying global competition; intensifying competition for advanced, knowledge-based jobs among the states; and an increasingly mobile labor force have rendered that notion obsolete.
New Jersey’s slowdown is far worse than the nation’s.
In the first 11 months of this year, New Jersey ranked 44th among the states in the rate of private-sector job growth (0.4 percent). That put it way behind West Virginia, Alabama, Arkansas and Tennessee – none of them an economic powerhouse.
Meanwhile, private-sector employment in the nation expanded by 1.2 percent.
One result is that the state has fallen from ninth place to 10th in total employment. In April, Georgia surpassed New Jersey and is now ninth.
All of this sets the stage for modest expectations next year. In a slowing national growth context, New Jersey will struggle to match the employment gains of 2006.