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N.J.'s growth not enough, experts say
Thursday, January 19, 2006
BY DAVID SCHWABStar-Ledger Staff

The final tally is complete and New Jersey employers added 37,200 jobs to their payrolls in 2005, a subpar year.

One hundred forty-five of these workers can be found at the Palace at Somerset Park, a conference center and banquet facility.

It's an impressive place. It features a grand entrance with columns resembling the White House set on a 30-acre campus in Somerset, surrounded by potentially lucrative clients such as the state's big pharmaceutical companies.

Inside are chandeliers, working fireplaces and enough space to house 1,200 people for a business meeting. Though opened just last May, the venture already plans to expand.

"We have not reached our peak. So we are definitely hiring more people," said Kathleen Carney, the director of human resources. This year, payrolls could swell to about 200, including 55 full-time and the rest part-timers.

To some extent, the success of the Palace underscores the uneven performance of the New Jersey economy, one recorded in yesterday's year-end report card. The state's economy continues to grow -- with a few bright spots -- but not quite fast enough and not necessarily in all the right places, experts said.

The New Jersey Department of Labor and Workforce Development yesterday reported more of the same for December, with payrolls rising by about 3,000 jobs, while the state's unemployment rate rose to 4.7 percent, from 4.6 percent in November.

For all of 2005, job growth in New Jersey moderated, producing fewer jobs than the 47,000 added during 2004. In its glory days, New Jersey added more than 70,000 jobs per year, many of them in glitzy office buildings. About 4 million people are employed in New Jersey.

New Jersey also continues to perform worse than the nation in job creation. Payrolls grew last year by 1.5 percent in the U.S., even with the damaged caused by Hurricane Katrina, compared with less than a 1 percent rise in New Jersey.

While the national unemployment rate has been falling, hitting 4.9 percent last month, the New Jersey unemployment rate has been rising for most of the last six months.

"New Jersey lagged quite significantly behind the national growth rate," said Joseph Seneca, an economics professor at Rutgers University and one of the state's leading forecasters. "The yellow caution light is out."

Beyond the basic numbers, the problem in New Jersey is too many of the added jobs are lower-paying service jobs, such as those at restaurants and hotels, rather than higher-paying jobs at technology and finance companies, the sort of positions that have previously fueled the state's growth, according to some experts and industry representatives.

"The New Jersey economy has a history of creating a lot of high-end, professional jobs. But what we see is the economy is rapidly changing," said Dennis Bone, president of Verizon New Jersey, who served on Gov. Jon Corzine's economic- development transition team. "The economy really is at a crossroads, and I think if we do not address some of these changes going on ... in two or three years, it is going to be tough times."

Verizon is one company bucking the trend.
It has begun moving the first of 3,000 employees, many highly paid, into a renovated headquarters in Basking Ridge. It will eventually house 1,700 Verizon workers from New York and 20 other states.
Verizon has also hired about 300 technicians to build its fiber-optic network and 300 customer-service representatives.
Moreover, job growth has not been spread throughout the state.
For example, employment in Burlington, Camden and Gloucester grew 2.8 percent for the first nine months of last year, while payrolls in Mercer County rose 1.7 percent, according to the most recent data. At the same time, payrolls increased 1.2 percent in Middlesex, Monmouth, Ocean and Somerset counties.
In addition, the labor department's report analyzing regional employment trends contains few examples of the type of job growth economists want to see.
There are some examples, such as NRG Energy, which moved its headquarters to West Windsor from Minneapolis a year ago, creating about 300 jobs. The energy wholesaler sells power to companies such as Con Ed in New York and wanted to be closer to its customers in the Northeast.
But more typical of the firms adding jobs in New Jersey last year, according to the report, were:
The Palace at Somerset Park.
Lowe's in Eatontown, with about 150 jobs.
Ruby Tuesday restaurant in Neptune, with 100 jobs.
Whole Foods Market in Middletown, with 200 jobs.
Hotels and restaurants alone accounted for more than 11,000 of the added jobs last year.
The downside is that the average pay for this type of service jobs ranges from $20,000 to $28,000, compared with $58,000 for professional and business services and $75,000 for finance, two categories that have boosted the state's economy in years past.
David Crane, director of labor- market and demographic research for the labor department, said one reason northern New Jersey has lagged southern New Jersey is its dependence on the financial-services industry. Also, there is more land in the less congested southern counties, he said.
Still, as the books closed on the year 2005, there were some encouraging signs.
Private industry created all but 1,800 of the added jobs last year. In 2004, by contrast, private industry created about 31,000 jobs while government accounted for about 15,000 jobs.
David Schwab may be reached at dschwab@starledger.com or (973) 392-5835.
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