TRENTON-The federal Jobs and Growth Tax Relief Reconciliation Act-more commonly known as tax cuts-recently celebrated its one-year anniversary. The stated mission of the program was to stimulate the economy and increase jobs. But the increase in jobs is far below what supporters of the act projected. Supporters of the tax cuts predicted creation of 306,000 jobs nationwide per month. This would have meant 3.672 million jobs by June 2004. But only 1.442 million new jobs actually were created: a shortfall of over 2.2 million jobs.

New Jersey is no exception to the shortfall. Over the one-year period from June 2003 to June 2004, 107,500 jobs were projected to be created in New Jersey under the federal "Jobs and Growth" plan. But through June 2004, the federal plan has fallen 35,200 jobs short. To hit the federal target, New Jersey would have to gain 14,800 jobs per month on average for the rest of the year. That seems unlikely to happen, especially in view of a slowdown the state is now experiencing in the creation of new jobs.

"It's important to keep the big picture in view," said NJPP President Jon Shure. "Growth is relative and when it is measured against meaningful standards the disappointing news is that New Jersey and the nation aren't doing so well. Current policies aren't bringing the widespread benefits that were promised."

Recently the New Jersey Department of Labor and Workforce Development announced creation of 4,300 jobs in the state in June. According to the latest statistics, which are subject to change due to updates and revisions, New Jersey gained 14,800 jobs in March, 11,400 jobs in April and 9,900 jobs in May.

There are currently 4.04 million jobs in the state. But having more jobs than in March 2001, when the recession began, is a low standard for judging success. Like 48 other states, New Jersey is seeing a higher rate of growth in the size of the working-age population than in the rate of job creation. Since the recession began, the working-age population in New Jersey has grown by 2.7 percent while the number of jobs available has grown by only 1.2 percent. Had job growth kept pace with population growth during this time, New Jersey would have 59,800 more jobs.

New Jersey's current unemployment rate of 4.7 percent, is 1.2 percentage points higher than when the recession began 39 months ago.

So, although job creation in New Jersey has been better than in most other states, economic growth remains disappointing.

For more on JobWatch, go to http://www.jobwatch.org. The JobWatch analysis takes into account differences that can be expected among states in terms of job creation. EPI uses state-by-state employment forecasts of Economy.com, a leading forecaster of regional economics. Economy.com provides employment projections for each state for the fourth quarter of 2002 to the fourth quarter of 2004. Using this data, EPI calculated each state's share of the total employment growth and applied it to the projected 306,000-jobs-per month growth rate to calculate how much employment growth each state should experience if the federal government's employment projects were realized. That works out to an average of 9,000 new jobs per month for New Jersey.

The JobWatch analysis takes into account differences that can be expected among states in terms of job creation. The Economic Policy Institute uses state-by-state employment forecasts from Economy.com, a leading forecaster of regional economics. Economy.com provides employment projections for each state for the fourth quarter of 2002 to the fourth quarter of 2004. Using this data, EPI calculated each state's share of the total employment growth and applied it to the projected 306,000-jobs-per month growth rate to calculate how much employment growth each state should experience if the federal government's employment projects were realized. That works out to an average of 9,000 new jobs per month for New Jersey. For more on JobWatch, go to http://www.jobwatch.org

Economic Policy Institute's JobWatch tracks current trends in the U.S. labor market and offers up-to-date readings on its status. New Jersey Policy Perspective is a non-profit, non-partisan organization that conducts research and analysis aimed at providing information to help inform debate in New Jersey.

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