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.
Existing Home Sales due out at 10:00am.
jb
The TV wants to brag that the sales are up in October & November compared to last year.
A guess the worst is over (the TV said so)
“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.”
In a vibrant economy this is our report card??? I wonder how many of these were govt workers/service industry??? Behind the mountaineers of West Virginia in job growth??? That’s something you really don’t want to advertise. Where’s the pipeline of future home buyers??
Anyone has news on Lucent? How many job loses do they expect?
New Jersey is going to be forced to pay a hefty price for the indulgences required to keep businesses from leaving the state.
How many carrots does this state have left to dangle?
The state is looking to give Marcal Paper a $3,000,000 per year tax break for the next 7 years. Where exactly is this $21,000,000 gift coming from? Given that Marcal employs 900 people, this comes to almost $24,000 per employee over those seven years, one heck of a subsidy.
What happens when other companies realize they can scare the state into handing out tax breaks? If Marcal, a company that employs only 900 can get this kind of “support”, imagine what kind of leverage a company 3 or 4 times it’s size has.
jb
jim, NJ has to give bug business incentives to stay. i’m sure there’s more to the marcal deal than the summary #’s suggest. yes it’s hurting the state in the pocketbook but the loss of jobs and other ancillary services is probably worth it. reminds me of what china’s doing. they’re losing money on recycling our dollars back into our debt instruments but sometimes keeping your population working and expanding your manufacturing and IP base makes it worth it.
marcal is all about pandering to the Hispanics
jim, NJ has to give bug business incentives to stay. i’m sure there’s more to the marcal deal than the summary #’s suggest. yes it’s hurting the state in the pocketbook but the loss of jobs and other ancillary services is probably worth it. reminds me of what china’s doing. they’re losing money on recycling our dollars back into our debt instruments but sometimes keeping your population working and expanding your manufacturing and IP base makes it worth it.
Expanding your manufacturing base? New Jersey has been bleeding manufacturing jobs for at least the past 20 years (BLS Series SMS3400000300000001). In 1990 New Jersey had 529,500 manufacturing jobs, today it has approximately 316,000. We’ve lost almost 100,000 manufacturing jobs since the year 2000.
Marcal employs 900, less than 1% of the 100,000 jobs lost in the past 6 years. The trend is still clearly downwards. The simple fact is that New Jersey is too expensive to support manufacturing. It’s really that simple. How much tax money would it have cost the state to save these jobs? If it cost $3 million a year to save 1%, can we really afford to spend $300,000,000 a year to subsidize these jobs?
If we’re really transitioning to a service-based economy, why support manufacturing at all?
jb
NJREbear (#4):
Lucent? Are you kidding? They died and decomposed six years ago. There aren’t many jobs left to lose. Their corpse just got dragged in by Alcatel (hard to imagine a compnay full of bigger morons than Lucent…but then, we should never underestimate the French). Of course, Patricia Russo now gets to be the chief necrophiliac, munching away on the Bearnaise-sauced rotting flesh of two putrid cadvers rolled into one.
I was under the impression that Lucent was currently employing roughly 9,000 people in NJ. However, I’ll agree that it is a dramatic reduction from the 25,000+ that were employed in the late 1990s.
jb
From the BLS, series ID: SMS3400000300000001
https://njrereport.com/images/njstatemanu.jpg
jb
Richard from #75 in Lowball Dec ’06 post.
be very careful with that assessment. unless you’re in the house you can’t accurately judge the differences in the pricing.
Richard, the home was well-photographed so I think I can make a pretty good judgment call. With the comparison home, I saw every room and every feature (or lack thereof) countless times. They bought this house knowing that every year they would try to tackle something new, upgrade the kitchen, finish the basement, new flooring in the den, etc.
If anything, I am wondering if the house that just sold for 615k went for such a low price due to some sort of intra-family dealings because I think it is unbelievable that it sold for so much less money than the 2002 comp. No one can convince me, however, that this home was worth 140,000 less than my friends home due to the # of upgrades, no way, no how. (I am taking the 670 paid in 2002 and adjusting upwards for inflation at 3%, net change in price is -140k).
Richard, you bought a few real estate investments, wonderful! It’s a good thing that you have a long term hold strategy because clearly, clearly, there is more devaluation to come in this market.
Richard, you have more positions than Paris Hilton!
allow me to quote you:
Richard Says:
July 30th, 2006 at 11:24 am
what seems to (finally) happening is people are starting to look at purchases in the traditional ways, e.g. location, condition, amenities, affordability, etc. quickly leaving are the days to get in now before you miss out on another month of appreciation. that’s why this market is going to continue to stagnate and decline for years to come.
or how about this gem
Richard Says:
June 30th, 2006 at 9:24 am
if you want to be prudent get yourself some cold hard cash and stuff it into the mattress like prior generations did.
What exactly happened to you in the past 5 months to make you flip-flop worse than John Kerry in an election year?
MoneyMasters: Recession in ’07
(255 sec.) One of Wall Street’s biggest bears tells us why investors should look out below.
http://www.forbes.com/video/?video=fvn/moneymasters/vj_mm122806&partner=yahootix
Housing is going to collapse in 2007 !!!
thanks clot & jb.
My impression was that certain towns like Homedel are dependent on Lucent jobs. The fact is that New Jersey offers very limited high end electronics/semi conductor jobs. I know quite a few people who work in that industry and most of them are worried about their next job.
14] ” flip-flop”
i like that :)
who’s flip flopping? i choose to reveal what i want when i want. lack of knowledge on your part doesn’t denote flip flopping.
my july comment is not inconsistent with what i say today. flat to slightly declining prices for a while. of course i could be wrong. the june comment is also consistent. i do have cash and some other ‘hard assets’ sitting in a safety deposit box and another undisclosed location. more diversification = less risk = more protection = more options. it’s quite simple.
let us know the detailed breakdowns on the 2 houses in westfield. i smell something funky.
“who’s flip flopping?”
“that’s why this market is going to continue to stagnate and decline for years to come.”
“if you want to be prudent get yourself some cold hard cash and stuff it into the mattress like prior generations did.”
Is this the same guy that now states that you’re foolish to be in cash, inflation will erode its value?? Is this the same guy calling those in gold “arrogant”?? What changes in a few months???
Sounds like a friend of mine, who hates this market, but his wife loves shopping in downtown Red Bank. The house won out, in Red Bank, he cringes when he sees the cc billis.
Also, reminds me of the great Admiral, James Stockdale; “Who am I, why am I here”??
Richard ‘ol buddy ‘ol pal…
i choose to reveal what i want when i want.
Sorry man, I didn’t realize you were working for the CIA.
There is a Spanish Proverb that states: “It is better to conceal one’s knowledge than to reveal one’s ignorance.”
lack of knowledge on your part doesn’t denote flip flopping
Lack of knowledge on my part? Sorry, my Crystal Ball into the great mind of Richard is in the shop.
I read and contribute to this blog to educate myself and others on the local RE market. Now that I see what I am dealing with here, I realize there is nothing I can learn from having any sort of discussion with you.
NJ is funding these incentives through the tax revenues gained from the corporations.
Marcal’s break has been offered to large WS investment banks as well. One example is Deutsche Bank. DB will be relocating 1200 employees to Harborside in ’07.
than wouldn’t the most prudent solution be to find a way to lower energy costs?
Energy prices in NJ aren’t necessarily inherently high. We have a large low-cost nuclear base in NJ and also have the ability to import power from the west. Prices are high because of the add-ons and social programs that get embedded in electric prices.
The state is dependent on those tax revenues
Aside from the sales tax, which does goes into the general fund, the electricity taxes (Societal Benefits Charge) goes to programs like subsidizing uneconomic solar installations. In a state undergoing a cost of living crisis, perhaps programs like this could be put back on the shelf for a while in order to lower electric rates and provide some relief to NJ citizens and businesses.
New Home Sales: Northeast Meltdown Continues! sales were down an astounding 42.4% as compared to November 2005.
New Home Sales: Northeast Meltdown Continues!
http://paper-money.blogspot.com/2006/12/new-home-sales-northeast-meltdown.html
Today, the U.S. Census Department released its monthly “New Residential Home Sales” report for November showing continued weakness to the nation’s new home market most notably in the Northeast region where sales were down an astounding 42.4% as compared to November 2005.
Generally reported as showing “strong” signs of market “stabilization”, the report does, in fact, show an increase to the median and average price for a new home but as we all are well aware, the significant incentives that home builders have been offering are NOT reflected in this report so the price movement is a bit of a “red herring”.
Additionally, the report showed significant increases to inventory and months supply on a year-over-year basis.
Aside from the sales tax, which does goes into the general fund, the electricity taxes (Societal Benefits Charge) goes to programs like subsidizing uneconomic solar installations. In a state undergoing a cost of living crisis, perhaps programs like this could be put back on the shelf for a while in order to lower electric rates and provide some relief to NJ citizens and businesses.
Agreed.
jb
“Of course, Patricia Russo now gets to be the chief necrophiliac, munching away on the Bearnaise-sauced rotting flesh of two putrid cadvers rolled into one.”
Clot: this is comedy
BC Bob Says:
December 28th, 2006 at 10:31 am
Also, reminds me of the great Admiral, James Stockdale; “Who am I, why am I here”??
Stockdale? How about Perot?
“Experience? At least I don’t have experience running up a 4 trillion dollar debt!”
Chi,
Just classic stuff!!
regarding the posts on Lucent…I work there. Of course, since some of you think I’m a moron, you might not want to read further.
The Holmdel location is closing and the remaining employees are being relocated to Murray Hill and Whippany.
As for layoffs, we were told that after the merger, 10% of the combined company will be laid off. Beyond this, we don’t know where the cuts will be or when they will start.
If I worked for Lucent in NJ, I would be
taking French lessons or look for a job.
and don’t forget Pat Russo has your best interest in mind on the commute to Paris.
#28 ,
thanks for the information.
I’m not sure of ATT’s footprint in NJ.
Today ATT offered more concessions to close the deal with sbc. As far as i remember, att & sbc were planning to layoff 13K employees.
http://www.marketwatch.com/news/story/att-offers-more-concessions-bellsouth/story.aspx?guid=%7BCD9BE26C%2D082A%2D4B0D%2D975D%2DBECB07EFDB68%7D&siteid=yhoo&dist=yhoo
correction to #30
it is Bell south and not SBC. SBC has already been assimilated. The number is 10K.
http://smallbusiness.yahoo.com/r-article-a-22444-m-61-sc-64-major_job_cuts_to_follow_bellsouth_att_merger-i
“The Holmdel location is closing and the remaining employees are being relocated to Murray Hill and Whippany.”
IMO, home sellers in Holmdel and sorrounding communities could face a stiff problem.
give it a few years, their will be a sales
location and thats about it.
NJ to expensive for Alcatel.
R&D will move soon, admin.is finished,and human
Resources will wind down quickly.
its over for lucent in NJ
Pseche22m
Whatever happens to Lucent will happen to all of the other companies in NJ as well. Offshoring of jobs is a global phenomenon. I know some French but it won’t do me any good because there are already plenty of French-speaking people in France. Besides, both the French and American jobs will probably be offshored to Asia, where there are 10x as many unemployed engineered, so you probably meant to suggest that I studty Mandarin.
Of course, in ten years, the Middle East will be the new low cost center.