When Gov. Chris Christie delivered his 2014 budget address last month, he touted the growth of the private sector during his term, to the tune of 103,000 new jobs.
But, as legislative Democrats were quick to point out, there's one number Christie didn't mention: 9.6 percent. That's the state's unemployment rate as of December, and while new numbers are due out today, December's data are significantly worse than the same-month rates of New York (8.2 percent), Pennsylvania (7.9 percent) and the United States as a whole (7.8 percent).
Assemblyman Lou Greenwald (D-Voorhees) called it "sky high," noting it's the fourth highest in the nation. But Charles Steindel, the state's chief economist, argues the jobs number is more important than the unemployment rate.
Though the two data points are released simultaneously, the jobs numbers are based on surveys of employers checked against other data, such as state tax records. The unemployment rate is based on a household survey that uses a sample size Steindel said is too small to be accurate.
The unemployment rate also is based on the size of the labor force — those working or actively seeking work. Steindel said New Jersey's labor force has almost returned to 2009 levels.
"That's the explanation of why the unemployment rate is so high," he said. "The labor force has basically normalized, but the jobs haven't normalized."
He said that also explains why the national unemployment rate has dropped faster than the state rate. He said other figures, like new housing permits and car sales, confirm New Jersey is recovering.
Not everyone agrees.
Gordon MacInnes, president of New Jersey Policy Perspective, said New Jersey still lags its neighbors even if one looks solely at the jobs number. A report out by IHS Global Insight last week found New York already has surpassed its pre-recession employment peak, and Pennsylvania is set to do so early next year. New Jersey isn't expected to do so until 2015.
"There's something wrong here, and if we want to continue a conversation that would suggest we're on the right track, we ought to acknowledge — and the governor ought to acknowledge — that it's a very slow trek," MacInnes said.
Steindel doesn't disagree that the recovery has been slow, but he said it's not the first time New Jersey's suffered a lengthy recovery. The same thing happened in the 1990s, he said.
"It took some years to get back to normal," he said. "That Wall Street bust and housing bust really hit New Jersey really hard."
If New Jersey hopes to hasten its recovery, it will need to stare down steep competition from other states, according to Scott Rothbort, a professor at Seton Hall University's Stillman School of Business. He said one necessary step is to improve the cost of living.
"There's no incentive for people to move to New Jersey, because once they move here, they're hit with huge real estate taxes and huge automobile insurance increases," he said. "It's tremendous."
Rothbort said the state also must improve its transportation infrastructure to make it easier for people to live and work here. But Rothbort said growing jobs is about more than improving quality of life.
"If you're looking to entice corporations to come here, you need to give them some sort of incentives," said Rothbort, who also owns an investment company, Lake-view Asset Management, in Millburn.
David Brogan, first vice president at the New Jersey Business and Industry Association, agreed, citing Pennsylvania — with its low income tax and aggressive business incentives — as a model.
He noted Christie's budget plan doesn't include the 10 percent income tax cut he sought for fiscal 2013 — one reason why "it was so important that (Christie) maintain the bipartisan business tax reforms started in 2012," said Brogan, referring to the governor's decision to continue phasing in a number of tax and regulatory changes in his fiscal 2014 budget plan.
Business incentives do have a place, MacInnes said, but pointed out much of the state's money has gone toward in-state moves, such as grants for Prudential and Goya Foods.
"While the frequency and the magnitude of those incentives have increased under Governor Christie, they are almost exclusively aimed at job retention, not at new jobs," he said.
As for taxes, MacInnes said the $1.5 billion the state would have spent on the income tax cut would be better spent investing directly in the future. For instance, he said, the state should beef up its academic centers to become a more attractive research and development hub for business.
MacInnes sits on the Rutgers University board of governors, but said he was speaking on behalf of NJPP. He called last year's university realignment and the $750 million higher education bond issue a start, but said those measures must be the means, not an end.
Brogan said another issue hopefully will wane in the coming months — economic uncertainty. The national election, Hurricane Sandy, and the federal government's fiscal fistfights have led to hesitation among some businesses.
"As these things get resolved, we're going to see more stability, more certainty, more predictability, and then you're going to see an increase in economic activity," he said.
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