| Publications | Commentary | Newsletters | In the News | Press Releases |
 |
 |
When the state Department of Labor released the latest job numbers for New Jersey, phrases like "rocketed upward" and "near record levels" were part of the effusive coverage. The addition of an estimated 9,100 new jobs in April and a "whopping" 23,000 over the past two months is being treated like a bigger triumph than it really is. In truth, it's too little. And for many, it's too late.
Forgotten in all this elation is that the number of jobs in New Jersey still hasn't reached the level of December 2000. That's right, December 2000 -- more than three years ago. When you consider that over roughly the same period the population of New Jersey grew by 206,280, the increase in jobs is especially unimpressive.
And since the recession officially ended in November 2001, job growth has been less than 1 percent. In contrast, the working-age population in New Jersey grew by 1.9 percent during this time. If job growth since the recession ended had just kept up with working-age population growth, New Jersey would have approximately 51,100 more jobs than it has now. In other words, New Jersey needs 11,600 jobs per month to recover jobs lost in the recession and accommodate the working-age population growth.
And what kinds of jobs are these new jobs? Also lost in the jubilation is the fact that many new jobs provide lower wages than those they replaced. The Washington-based Economic Policy Institute found that since the recession started in March 2001, jobs in growing sectors in New Jersey (construction, retail, financial, education, health, hospitality, government) pay an average annual wage of $40,677, compared to jobs in sectors that are shrinking (manufacturing, wholesale trade, transportation, utilities, information, professional and business services) that pay $55,560.
And jobs are shifting from industries that are more likely to provide health insurance to those that are less likely. Industries in which the share of total jobs has declined insure 65.6 percent of their workers, while 55.1 percent of workers are insured in industries in which the share of jobs has increased.
And what about the increase in the unemployment rate? Up from 5.2 percent to 5.3 percent in April, the current unemployment rate is higher than it was at the beginning of the recession and at the end of it. This is evidence of the "missing labor market" that has worried economists all along. People in the missing labor market look for jobs only if the odds of finding one are good. During extended periods of poor prospects, such as we have experienced, they stop looking, so they aren't reflected in the unemployment rate.
A recent EPI study found that if the labor force had grown more in line with the population as it did in past labor slumps, the U.S. unemployment rate in January would have been 7.1 percent, not the 5.6 percent recorded. The fact that New Jersey's unemployment rate has gone up is an indicator of the existence of this "missing labor force" in New Jersey. When they are factored in, 9,100 new jobs seems even less remarkable.
We keep hearing about how well New Jersey has done compared to other states, particularly in the Northeast. It's true: New Jersey has fared well, comparatively. But is that the goal? We need a better slogan than "New Jersey, we're doing somewhat better than most other states."
On a broader scale, EPI is conducting an analysis of the impact on job creation of the federal tax cuts implemented in June 2003. Supporters projected the cuts would create 306,000 jobs per month on average nationally. EPI deduced that this should have led to approximately 9,000 new jobs in New Jersey each month on average. Ten months into life with the tax cuts, 55,800 new jobs have been created, only a 62 percent "success rate." To achieve the federal target, New Jersey would have to gain on average 13,200 jobs per month for the rest of the year. Clearly, tax cuts are not getting the job done.
While new jobs have been created in New Jersey, problems like unemployment, underemployment, decreases in pay and uninsured workers persist. The goals of job creation and improved quality of life should go hand in hand; jobs should help make life more livable, not just survivable. The recent upswing in new job creation in New Jersey holds some promise. But the bottom line is that we still have fewer jobs than three years ago. And 233,800 of our friends and relatives are looking for work. That is nothing to cheer about.
Susan J. Bottino is a policy analyst at New Jersey Policy Perspective, a Trenton-based nonprofit organization that conducts research on state issues.
| © 2008 New Jersey Policy Perspective |  |