The economic recovery is underway, but unemployment in New Jersey remains higher than the national average. Dean of the Edward Bloustein School at Rutgers University James Hughes told NJ Today Managing Editor Mike Schneider that the state is moving in the right direction and that he was relieved by the latest jobs numbers released.
The picture was better today with the jobs numbers, which Hughes sees as positive. “Last month looked like it was a disaster. We had a huge loss in private sector jobs but it only lasted a month,” he said. “They were all revised.” Revisions to released numbers are important, according to Hughes, because the data has been erratic in the past several years.
The trend is promising, Hughes said. He explained that 117,000 jobs were lost in 2009. In 2010, there was stability and modest growth of 10,000 jobs. In 2011, jobs grew by 33,000. Based on the first eight months of this year, Hughes said it’s likely there will be 45,000 to 50,000 additional jobs added in 2012. “So we’re moving in the right direction but we still have a deep hole to climb out of,” he said.
The rise in the unemployment rate can’t be blamed on more people looking for work this time, according to Hughes. “When you look at the components it basically was a labor force that didn’t grow, unemployment went up, employment went down,” he said.
Hughes pointed out that there is sometimes a disconnect between the unemployment rate and the number of created jobs. “That’s not just New Jersey,” he said. “Everybody knows New York City has been doing extraordinarily well in terms of payroll employment but their unemployment rate has jumped into the double digits and they can’t explain it.”
Slow economic recovery should have been expected, according to Hughes. “Economic historians have shown that deep financial crises — and we went through a deep financial crisis — is always followed by very slow, long, painful recoveries,” he said. “Households were left in financial conditions that were very, very unfavorable. They had too much debt. Now they’re de-leveraging, working off the debt and there’s nothing that’s going to solve that but time.”
According to Hughes, New Jersey has kept pace with the country this year. “We probably got our fair share of growth in August, our share of the national growth,” he said. “But nothing for both guns blazing economic growth.”
Some sectors are doing better than others, according to Hughes, including the professional and technical services sector and health care sector. Investment in education in the state is also crucial to recover, he said.
Swiss drugmaker Roche said Wednesday it plans to open a major clinical research center in New York City, passing on New Jersey’s push for the facility to be located adjacent to Robert Wood Johnson Hospital in New Brunswick.
Hughes said New Jersey doesn’t currently have very large centers of excellence in higher education in the life sciences. That is important for the pharmaceutical industry. “They tend to be clustering toward the national giants so San Diego, the Bay Area, Cambridge, Mass. — their high quality education facilities and institutions,” he said.
When asked if the Garden State should be pursuing the life sciences, Hughes said, “Absolutely. We should’ve been doing it over the past 20 years.”