It is challenging to reconcile the contrast of New Jersey's torrid job expansion in the 1990s with its insipid economic growth in the 2000s. However, the current state administration and leaders in the legislature are making some important inroads that provide reason for optimism.
The 1990s was a decade during which we believed that it was acceptable to create wealth, and that working hard and being successful was a virtue. Then came the 2000s. It became perfectly acceptable and expected of our political leaders to rail against the wealthy and to impose ever increasing regulatory burdens on businesses. It was the decade of the corporate business tax surcharge; it was an Orwellian world in which couples making $500,000 a year or a single person making $250,000 a year were deemed appropriate targets of a "millionaire's tax."
But then we had to live with the consequences of these populist policies. From January 2002 through January 2010, New Jersey's economy lost 188,500 private-sector jobs. That amounted to 5.6 percent of the private-sector workforce. Only five states – Mississippi, Indiana, Illinois, Ohio and Michigan – fared worse than New Jersey during that period.
It was in this cauldron that Chris Christie became governor, that Senator Stephen Sweeney became Senate president and that Sheila Oliver became Assembly speaker. When these leaders took their oaths of office, they faced an $11 billion budget deficit. The state was hemorrhaging jobs, we had a regulatory and tax system that discouraged investment, and we were experiencing an out-migration of our wealthiest citizens.
The governor and the legislature had to contend with the challenge of reversing a poor business climate and staunching wealth out-migration. They had to create faith in the state as an investment destination. They had to generate sufficient economic growth to provide employment for our citizens and tax revenue to stabilize the state's precarious fiscal position. They have been accomplishing these goals through tax policy reform, an extremely responsive economic development team, job creation incentives, regulatory reform, public/private partnerships and personal engagement in marketing the state to business leaders globally.
Since bottoming out in February 2010, New Jersey's economy has added 127,800 private-sector jobs. Further, New Jersey has continued to make improvement in the eyes of executives of the state's major employers – both as a place to do business and expand operations, according to the results of the 2013 "C-Suite Survey" of Garden State's major employers.
The findings of the Rutgers-conducted poll show that 25 percent of respondents said New Jersey is a good-to-excellent place in which to do business, up from 23 percent last year, 15 percent in 2011 and 12 percent in the 2010 survey (which was conducted in the fourth quarter of 2009, before Governor Christie took office). Twenty-eight percent said New Jersey is a good-to-excellent place in which to expand their businesses, up from 24 percent last year, 17 percent in 2011 and 11 percent in the 2010 survey.
The creation of wealth, employment and economic opportunity is of vital importance to every citizen in this state. The Center on Wealth and Philanthropy at Boston College published a paper entitled, "Migration of Wealth in New Jersey and the Impact on Wealth and Philanthropy."
The authors reported that from 1999 through 2003, there was a net influx of $98 billion in household wealth into New Jersey. In the subsequent five years, from 2004 through 2008, New Jersey experienced a near total reversal of the flow. The result was a shift from a net inflow of $98 billion to a net outflow of $70 billion. This represented a total decline in wealth of $168 billion.
Why is wealth migration and wealth creation important to all citizens? According to Federal Reserve Data, about 9 percent of U.S. households have at least $1 million in net worth. That 9 percent makes the majority of charitable contributions, own the majority of equity in unincorporated and closely held businesses, and has a disproportionately large share of investable assets. In other words, these individuals are the source of wealth creation for all members of society.
As the Boston College study states, "[Ninety percent of the nation's] millionaires acquired their wealth in their own lifetimes through business, investment, or service as corporate executives rather than through inheritance. The majority became wealthy through growing their own business or investing in businesses of others. They tend to be entrepreneurial and agents of economic expansion."
Wealth in our country, therefore, is not largely about hereditary prosperity. Rather, it is about the realization of the American Dream. That's why the latest jobs numbers and the results of the C-Suite Survey are so important. These facts, figures and opinions help government, trade associations, academic institutions and all stakeholders in New Jersey measure the progress we are making in our collective efforts to improve our business climate. To quote Mahatma Gandi, "The future depends on what you do today."