Jones Lang LaSalle


Lower-paying jobs dominating N.J. market

Thursday, January 26, 2006
By MARK PERKISS
Staff Writer

While the nation's economic picture has improved, with 2 million new jobs created for the second straight year, New Jersey has lagged far behind in creating new employment opportunities.

"Our job growth has slowed and in the last year has been moderate at best," said Rutgers University economist Joseph Seneca, who chairs the governor's Council of Economic Advisers.
"The biggest problem is that the jobs that are being created are no longer the high-paying jobs, but instead much lower-paying ones and for our future economic health we need to reverse that trend," he said.

In 2005 New Jersey employers created what Seneca and Rutgers economist James Hughes estimate will be 35,000 new jobs when the final numbers come out. That's down from the 46,300 new jobs created in the state in 2004.

Those two years are a far cry from the go-go days of the economic boom of the 1990s when New Jersey employers were adding an average of 77,000 new jobs annually.

"Obviously that era has gone and we're slowing down," Hughes said. "The job creation we saw in 2004 was bolstered by extraordinary growth in government employment, which went up 30 percent. Clearly that kind of growth was not sustainable and that's good."

Seneca agreed, noting that most of the jobs created in 2005 were in the private sector. "That's the direction you want job creation to take; now we need to try to change the kinds of jobs being created."

Much of the job creation has been in the lower-paying leisure and hospitality, education, health services and retail sectors.

"That's the exact opposite of the pattern of the 1990s," Hughes said. Then the job growth was in professional and business services, financial activities and information sectors.

"What has happened is that New Jersey has become much less cost competitive in the last three years," Hughes said, pointing to increases in the state's Corporate Business Tax and income tax increases for those earning more than $500,000 a year.

"The state has gotten a reputation of not being business friendly and taking the corporate business sector for granted," he said. "That has led businesses that are expanding to expand elsewhere rather than New Jersey."

In Mercer County, job growth has followed the state trend, said Charles Hill, director of the county Office of Economic Opportunity.

"The main drivers for us continue to be the service and retail sectors," Hill said. "Route 1 continues to attract corporate expansion and new jobs, but development like the Hamilton Marketplace and overall expansion in the Route 130 corridor has allowed the service and retail industry to grow."

That growth along with increases in warehouse employment near interchanges 7 and 7A of the New Jersey Turnpike have helped keep Mercer's unemployment rate lower than the overall state level.

As of November, Mercer County's unemployment rate was 3.8 percent, up from 3.2 percent the previous year and down from the county's high for the year of 4.1 percent in February.

The statewide unemployment rate was 4.2 percent in November up from 3.6 percent the previous month and down from the state's high of 4.9 percent in February.

Hill said he shares the concern of Hughes and Seneca that too much low-paying job growth is not good economically, but said the growth in the service and retail sectors has a positive side.
"It's true that we have to look at the overall economy, but we also have to look at what serves the people who live here. And from that standpoint, the growth in retail jobs is good," he said.

NOTE: Contact Mark Perkiss at mperkiss@njtimes.com or (609) 989-5723.