New Jersey's job market is stronger than widely perceived, the
top economist for the Christie administration told business leaders
in Hasbrouck Heights on Tuesday, saying that solid employment
advances have been masked by the relatively high jobless rate and
assumptions about the salaries the new jobs command.
The state began adding jobs in mid-2011, but "nobody seemed aware of it" due to the attention paid to the state's unemployment rate, which remains higher than the national rate, said Charles Steindel, chief economist for the Treasury Department.
Others who spoke at the economic forum sponsored by the Paramus- based Commerce and Industry Association of New Jersey were less optimistic, noting that New Jersey's job growth lags behind New York City's, nationwide income is weakly rising, and new hires are often in lower-paying sectors.
The state jobless rate, which peaked at 9.7 percent last July, stood at 8.7 percent in April, compared with the national rate of 7.6 percent. Steindel said that diverted attention, for instance, from the addition of 60,000 private-sector jobs in the state in the 12 months ending in April.
That was the highest number of new private-sector jobs since 2000, if well below the 100,000 created in 1999.
Steindel added that the job gains also have been obscured by assumptions that the new jobs are low-paying ones. That, he said, is sometimes the assumption when the gains come in traditionally low- paying sectors such as retail, health care and leisure and hospitality.
Yet a recent report put out by the U.S. Bureau of Labor Statistics showed that the average weekly wage in New Jersey increased by 2.2 percent from March 2012 to March 2013. Steindel called that figure "one of the fastest-growing" in the country.
"There is a tendency to say, 'Well, this sector is a low-wage sector, this is where the jobs are growing and therefore it's all low-wage jobs,' " he said. "The answer is, jobs aren't uniform across a sector. We really don't know."
Alexander Heil, chief economist for the Port Authority of New York and New Jersey, said that it's clear from data on the New York area that some higher-paying sectors have done more poorly in recent months than those that pay less.
"Since the recession, the composition of jobs coming back is different than that which was lost," he said. The New York region is a good example, he said, noting that New York City's "record job growth" in recent months has occurred not in the well-paid financial sector, which has been flat, but in sectors such as health care, education and tourism, in which "you get industries that are lower- paid."
"I think there is evidence to suggest that we're now looking at wages, in total, [that] are stagnant, they haven't moved up," he said.
Patrick O'Keefe, director of economic research for accounting firm CohnReznick of New York, made a similar point, citing after- tax income data for the nation. Although income rose by $1.3 trillion, or 4 percent, between December 2007, when the recession began, and April 2013, almost half of the gain was due to "income transfers - Social Security, Medicare, Medicaid, private pensions," he said.
"Less than one-third of it is attributable to increased wage and salary disbursements," he said, adding that before the recession, those disbursements accounted for more than 60 percent of the income. That's one reason for the slow economic pickup, he said.
"When you put it altogether," he said, "we are not getting that income effect, which would then complete the virtuous cycle and lead to increased demand."
(c) 2013 Record, The; Bergen County, N.J.. Provided by ProQuest LLC. All rights Reserved.
Most Popular Stories
- Bently Creates Alabama Small Business Commission
- Is Alibaba's IPO Price a Fairytale?
- Kardashian: Kanye Never Told Fan in Wheelchair to Stand Up
- Los Angeles Angels Clinch Playoff Spot
- U.S. Producer Prices Held Steady in August
- When to Say No to Investors, Yes to Mentors
- U.S. Tobacco Growers Lose Last of Price Supports
- Scottish Leaders Scramble for Votes on Independence
- Sanctions Push Russian Ruble to Historic Low
- ISIS Grew Strong as al-Qaida Weakened