Since the beginning of 2010, New Jersey has awarded more than $1 billion in tax subsidies as part of a strategy aimed at jump-starting the state’s economy and putting tens of thousands of people back to work.
Even as Governor Christie pleaded poverty to make deep cuts to essential services like education and health care, the state doled out tax credits and grants to corporations and developers in New Jersey at an unprecedented rate.
Incentives for economic investment were necessary, it was argued, to create a more business-friendly climate that would generate good jobs for New Jerseyans.
Sadly, it hasn’t worked. Not even a little bit.
Employment statewide is down more than 5,000 jobs since the beginning of 2010.
Last month, 3,847,200 people were employed in New Jersey, according to the state Department of Labor and Work Force Development’s monthly non-farm employment report, which is available here. That’s down 5,100 from the 3,852,600 who were employed in January 2010, when the state embarked on probably the most generous business subsidy effort New Jersey has ever seen. (For more, see NJPP’s report A Surge in Subsidies.) It’s also a precipitous drop – 231,700 jobs – from peak employment of 4,078,900 in 2007.
A breakdown of the data shows the state has lost 7,600 manufacturing jobs and 4,500 construction jobs in the private sector since January 2010. They also show the state has lost 24,400 public sector jobs — as teachers, police and other employees were laid off. Those 36,500 lost jobs were offset somewhat by a gain in the service sector of nearly 31,000 jobs.
The decline in employed New Jerseyans might come as a surprise to some who’ve assumed that the economy was improving because the state unemployment rate dropped from 9.8 percent to 9.3 percent during that time. (The U.S. rate, over the same period, has fallen twice as fast, from 10.0 percent to 8.8 percent, according to the U.S. Department of Labor.)
But it turns out the drop in the state unemployment rate is a statistical anomaly because, since January 2010, the state’s labor force — the number of people working plus those looking for work — actually declined to 4,493,000 from 4,522,200 as people moved away or gave up on the hope of finding a job. So the unemployment rate didn’t go down because more people are working; it went down because fewer people are looking.
Seems like there might have been a better way to spend that $1 billion….