Unemployment Rate Continues To Drop, But NJ’s Economic Indicators Are Complicated

Despite downward trend in unemployment, thousands of jobs were shed in recent months and businesses warn about other pressures on their competitiveness

While New Jersey’s unemployment rate has been steadily dropping over the last six months, the state has also shed thousands of jobs, including in some key industries. And even as Gov. Phil Murphy has been quick to tout the drop in unemployment, business interests are focusing on the state’s poor rankings in other economic indicators.

Amid the decline in unemployment, state labor officials have been quick to highlight recent efforts to boost apprenticeship programs that provide residents with on-the-job training. In fact, yesterday during an event organized by the New Jersey Business & Industry Association, Labor Commissioner Robert Asaro-Angelo was interrupted by applause after saying the number of apprenticeship programs has grown statewide by more than 40% over just the last 18 months.

“Sometimes I’m a little bit overwhelmed by the success we’ve had,” Asaro-Angelo said.

The latest drop in unemployment occurred in September when the rate fell to 3.1%, the lowest measured in recent memory in New Jersey. Murphy, a first-term Democrat, has regularly highlighted that trend, including in news releases and on social media.

Yet even with that good economic news, there is also cause for concern. For example, the state just received another dead-last ranking in a head-to-head comparison of the business climates in all 50 states, with high tax rates serving as the biggest concern. That’s something groups like the NJBIA have long identified as an impediment to economic growth.

“As long as New Jersey continues along this disappointing path, we will continue to be non-competitive in our region, we will continue to drive away businesses and residents, and we will continue to be unaffordable,” said Michele Siekerka, NJBIA’s president and chief executive, at yesterday’s event, which focused on the latest workforce issues in New Jersey.

Jobs added in the past year: 45,000

Over the last 12 months, New Jersey’s economy has added nearly 45,000 jobs, showing a solid long-term trend of improvement, according to the latest figures released by the Department of Labor and Workforce Development. And the unemployment rate has also shown a promising trend, dropping from 3.9% in September 2018 to 3.1% as of last month. The state’s unemployment rate has also bested overall U.S. unemployment, which was measured at 3.5% in September.

During yesterday’s NJBIA event in Plainsboro, Asaro-Angelo highlighted some of those numbers, but he also talked about challenges the state is facing as the labor market tightens while employers are still looking for skilled workers.

“It’s getting harder and harder to find talent, and it’s something that we work on every day in our department,” he said.

That’s where coordinating with other states agencies, including the Department of Education and the Office of Higher Education, comes into play, Asaro-Angelo said. Officials from the three state agencies have been working closely to link students with “experiential learning” opportunities like apprenticeships and paid internships that often leave them in a good position to get a job, he said.

“We’re echoing the same script,” added Diana Gonzalez, the state’s deputy secretary of education, during the event, which also featured a discussion of challenges posed by new technology, including automation. (Leah Mishkin of NJTV News reports on the segment on the future role of automation in all sectors of business.)

Jobs lost in July and August

But amid those coordinated efforts to improve workforce development in the state, a revision of preliminary figures for August revealed the state economy lost 1,900 jobs in August. That followed the shedding of another 3,200 jobs in July. The preliminary figures for September also showed a net loss, of 200 jobs, continuing the negative trend.

Another concern raised in an analysis of the latest jobs data by the Garden State Initiative, a right-leaning think tank based in Morristown, was the loss of an estimated 4,100 jobs in the business and professional services sector in September.

“That will bear monitoring in the months ahead,” said GSI president Regina Egea.

In addition, earlier this week the Washington, D.C.-based Tax Foundation revealed its latest rankings  of the business climates in all 50 states, and New Jersey landed in last place for the fifth straight year. The right-leaning group highlighted high property taxes and corporate-income levies among the reasons for New Jersey’s continued poor showing.

“It’s a very hard time to be an entrepreneur in this state and survive,” said Laurie Ehlbeck, state director of the National Federation of Independent Business, in response to the report.

New Jersey versus Alaska…

But as its name suggests, the Tax Foundation’s analysis focuses heavily only on the individual tax policies in place in the 50 states, leaving out other important factors for businesses, such as the availability of skilled labor and the quality of infrastructure and educational facilities.

New Jersey fares better in rankings that consider those types of factors, such as in the annual “Top States for Business” report that business-news network CNBC issues. In fact, CNBC considers 60 factors across 10 broad categories for its analysis, and New Jersey was ranked 36th among the 50 states by CNBC in 2019 after getting high marks in categories like “quality of life” and “education.”

Meanwhile, Alaska, which ranked 3rd in the Tax Foundation’s analysis, was near the very bottom, in 47th place, in the CNBC rankings.

Original Article