From the Philly Inquirer:

N.J. has been hit hard by the recession

From 2004 through the end of 2007, the go-go years of the national real estate bubble, New Jersey’s private-sector job growth was just 2 percent, less than a third of the national growth of 6.5 percent.
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And since the recession started in December 2007, New Jersey has lost jobs at a faster pace than New York and Pennsylvania, though not as fast as the nation as a whole, according to U.S. Department of Labor data.

Even worse, Rutgers Economic Advisory Service predicted that New Jersey will need until 2016, three years longer than the rest of the nation, to get back to the level of employment of 2007.

Joseph J. Seneca, a professor of economics at Rutgers University’s Edward J. Bloustein School of Planning and Public Policy and coauthor of a 2006 report warning that New Jersey faced “its most uncertain economic future since the Great Depression,” said there was an optimistic angle on the worst financial and economic crisis since the 1930s.

The state’s huge problems give Christie the opportunity to “turn the page on the decade that has seen New Jersey’s business climate deteriorate significantly” because of high taxes - business and personal - and generally high costs, Seneca said.

Even in the good economic times earlier this decade, Seneca said, New Jersey raised its income tax, sales tax, cigarette tax, and realty-transfer tax, while property taxes remained painfully high.

Those moves helped New Jersey edge past New York to claim the highest state and local tax burden in the nation for the last three years, according to the nonprofit Tax Foundation in Washington. Pennsylvania ranked 11th last year.
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Diffley said New Jersey had significant strengths, such as a talented workforce and a great location. However, Diffley and other economists said, the state has been hobbled by the decline of telecommunications and pharmaceuticals, which were growth drivers historically.

In 1990, 20 percent of the nation’s pharmaceutical jobs were in New Jersey. It now has 13 percent of them. From 2007 to 2008, the state lost 10 percent of its jobs in the high-paying industry.

Now a wave of pharmaceutical consolidations involving New Jersey firms, including Pfizer Inc.’s purchase of Wyeth in Madison and Merck & Co. Inc.’s purchase of Schering-Plough Corp., headquartered in Kenilworth, is likely to cost the state even more of those jobs.
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Despite the serious problems, Seneca said the recession could be an opening for New Jersey and other Northeastern states that have been losing population and jobs to the fast-growing Southeast and Southwest.

“There’s an opportunity now to be competitive again, because the high-flying states have been brought low,” Seneca said.