Jones Lang LaSalle


N.J.'s job gains didn't keep up with nation's

Employers struggled as costs rose
Posted by the Asbury Park Press on 01/19/06
BY MICHAEL L. DIAMOND BUSINESS WRITER

New Jersey gained 37,200 jobs last year, the state Department of Labor and Workforce Development said Wednesday in a report that showed the state's labor market didn't keep pace with the rest of the country.

Experts and employers said the final job figures are a sign that companies struggled with rising health care costs, higher energy expenses and interest rates, and the other costs of doing business in New Jersey.

Companies "are spending money. However, they're taking a lot closer look at the value that they expect to get for the money they put out," said Richard Dominguez, 63, who owns WSI Internet Consulting & Education in Ocean Township. He said he hopes his company's revenue will grow enough to allow him to add his first employee later this year.

The year-end jobs report showed New Jersey's labor market grew by 0.9 percent in 2005, while the U.S. labor market grew by 1.5 percent. The state's job growth also was down from 46,300 jobs in 2004.

The labor report for December, also released Wednesday, showed New Jersey added 2,600 jobs in the last month of the year. The state's unemployment rate rose to 4.7 percent from 4.6 percent in November. By comparison, the United States added 108,000 jobs in December, and its unemployment rate fell to 4.9 percent from 5 percent in Novem-ber. Because New Jersey represents about 3 percent of the U.S. labor market, it should have added 3,240 jobs.

The number of jobs is taken from a survey of employers' payrolls; the unemployment rate is taken from a survey of residents.

And the two don't necessarily move in the same direction. Economists give more credence to the payroll survey, which has a wider reach.

The report came one day after Gov. Corzine warned in his inaugural address that the state is losing high-paying jobs and replacing them with lower-paying jobs. If the trend continues, it means the state will collect less tax revenue.

"This indicates high-end corporate America is directing its hiring and expansion principally outside of New Jersey," said James W. Hughes, an economist and dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. He noted last year's job growth was less than half the number of jobs typically created during economic expansions.
One positive note: The private sector added 35,400 jobs last year, up from 31,300 in 2004, Hughes said.

Business groups chalked up the sluggish growth to the uncertainty employers face when trying to get a handle on their expenses.

Last year, for example, the cost of energy soared. The cost of health insurance rose by a double-digit percentage. And the cost of operating a business in New Jersey remains among the highest in the nation, said Philip Kirschner, president of the New Jersey Business and Industry Association, the state's largest business lobby group.

"It seems like consumer demand goes up and goes down," Kirschner said. "It does not track up and up each month, which would give employers confidence they can hire workers and have the work to sustain them."