Job Numbers Provide Sobering Backdrop to Labor Day

By Hank Kalet, NJ Spotlight

Malik Muhammad stands at the front of a small classroom in the New Brunswick One-Stop Career Center explaining the various skills that students will learn in the coming weeks as part of the Jersey Job Club.

The students, 11 men and women who have lost their jobs, sit taking notes. Some ask questions, concerned that their experience may not be sellable in the current job market. Some are concerned about their education; others ask questions about whether the skills they learned in their previous jobs will be transferrable.

But all of them are looking for help finding a new job at a time when both the national and state unemployment rates remain at generational highs and population growth has created more job-seekers for each job opening.

While New Jersey has replaced nearly all of the jobs lost during the first few months of the recession, population growth means that the state has about 60,000 more workers than jobs. This has created an employers' market and is creating a downward pressure on wages, analysts say.

Running the Numbers

The July jobs report -- the last one released before Labor Day -- showed a loss of jobs and an increase in the state unemployment rate to 9.8 percent, which is now the fourth highest in the nation. The losses followed two months of solid growth, according to the state Department of Labor and Workforce Development. The department said in an August 16 press release that preliminary figures showed a loss of 12,000 non-farm jobs in July, though the number of jobs grew by 45,500 over the last year. Labor officials said that the previous two months -- 22,600 jobs added in May and June -- showed the largest two-month gain in 12 years.

Overall, there were 4,143,411 people working in the state in July, compared with 4,286,959 in February 2008, the high-point for New Jersey employment.

State officials' however, are optimistic about the employment numbers, saying the long-term trends are favorable.

“The national economy has been sluggish and, realistically, we can’t be exempt,” Charles Steindel, chief economist for the state Department of Treasury, said in a press release. “Given the national softness and the strength of our job gains in May and June some fallback was likely,”

He said that the state’s “labor force participation rate and the percentage of our population who are employed remain above the national averages” with jobs being added in nine of the past 12 months.

“We anticipate that job growth should resume and start to put some downward pressure on unemployment,” he said.

Not as Optimistic

Analysts, however, are not as optimistic. While the new jobs are a good sign, the state unemployment rate remains among the highest in the nation, with a job deficit caused in part by the shedding of public workers by state, county and local governments.

Doug Hall, director of the Economic Analysis and Research Network, a national network that reviews state economic data, agreed that there have been positive shifts in the state in recent months, even though the “unemployment rate is going in wrong direction.” EARN is affiliated with the liberal Economic Policy Institute in Washington.

The increased rate, he said, could be caused by a growing optimism among the unemployed who may have resumed job searches after having dropped out of the labor force. That has the initial effect of “bumping up the unemployment rate.”

“In some ways, you can say that this is sort of good news disguised as bad news,” he said.

At the same time, he said, there are troubling indicators in the numbers. The state’s population growth has been strong over the last several years, far outpacing the growth in jobs. That means that the new jobs have barely offset the losses experienced in 2008 and 2009.

“New Jersey has been making slow but steady progress for about 18 months, since mid to late November 2010,” he said. “At the same time the population has grown enough that, to address population growth, the state would have had to create another 55-60,000 jobs.”

Overall, he said, the state is facing a jobs deficit -- the number lost during the recession plus the number of jobs needed to address the larger labor force -- of 341,400 jobs. When recession started in 2008, the state unemployment rate was 4.6 percent. The 5.2-percentage-point increase is well above the national percentage-point increase of 3.7 points and trails only Nevada.

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