BUSINESS & ECONOMY

What do the latest jobs numbers show about NJ’s economy?

BY Rhonda Schaffler, Correspondent |

New Jersey’s unemployment rate is worse than the national average. For more insight on the labor market, Business Correspondent Rhonda Schaffler spoke with Jim Hughes, the dean emeritus at the Bloustein School of Planning and Public Policy at Rutgers University.

Schaffler: Jim, new data out Thursday on the New Jersey labor market shows that we did add new jobs in May and the unemployment rate fell, so those are positives. But the unemployment rate in New Jersey is still higher than the national average. Why do you think the New Jersey job market is lagging behind?

Hughes: Well, our overall job growth has been lagging behind out of the nation as a whole, and we do reflect really the slow growth Northeast region. When we compare ourselves to New York, Pennsylvania, Connecticut and Delaware and the like we stand in the middle of the pack, so we’re really not unusual in there. So slower job growth is one component of it. A second one is really the mismatch between skills required by jobs that are open versus the skills of those that are unemployed. Again, that’s a national phenomenon and we see it here in New Jersey.

Schaffler: One interesting thing that we’ve seen nationally, and in fact a lot of economists are talking about, is something that came out in the so-called JOLT survey from the federal government. It basically looks at job openings and turnover in the labor market. And for the second month in the row, we have more jobs in this country than there are people to fill them. So help us understand why there are so many people who struggle to find work.

Hughes: Yeah that survey is at record levels right now. Nationally, we have more than 6 million unfilled job openings per month, and again, that is a record high. For the first time over the last two months, the number of job openings exceed the number of unemployed in the country, and that is highly, highly unusual. And again, it really emphasizes several factors. One key one is a mismatch between the new jobs that are being created, the new jobs that are open, and what specific education and skill levels those jobs require. And sometimes those that are unemployed came from different industries that are in decline, and right now without advanced work or training they do not have the necessary credentials to fill those jobs. In other cases it’s a voluntary thing where people don’t want to move just for the sake of a job. And that sort of is a different psychology than we had 20, 30 years ago where workers were quite mobile, willing to move, separate themselves from family in order to secure a job, so it is a complex issue but geography is a major factor.

Schaffler: Jim, you mentioned this issue of worker training and it’s an important one. Who’s responsible for retraining workers and how does New Jersey stack up compared to other states? Can we be doing more because clearly we know our unemployment rate is not as good as others.

Hughes: There’s multiple levels of responsibility. I think the New Jersey Department of Labor several years ago changed its name from the Department of Labor to the Department of Labor and Workforce Development, which indicated really a commitment at the state level to pursue workforce development. We also the private sector who has a responsibility there for letting the workforce development system know the types of skills that its new jobs require, so that we can really train people for the jobs that are currently opening.