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N.J.’s Vanished Public Jobs Squelching Recovery, Study Says

Oct. 3 (Bloomberg) -- New Jersey’s economic recovery is hindered by the elimination of 61,200 local and state government jobs and Republican Governor Chris Christie’s spending cuts, according to a report issued today.

The 2011 average unemployment rate of 9.3 percent would have been 8 percent with those public positions untouched, according to the study by New Jersey Policy Perspective, a nonprofit that analyzes issues affecting residents with low-to-moderate incomes.

“Cuts to the public sector make New Jersey a less attractive state for businesses to locate because they want good schools and safe communities,” the group said in the study. “Eliminating public jobs also contributes to the shrinking of New Jersey’s middle class and increasing income inequality.”

During and since the 18-month recession that ended in June 2009, governments across the nation cut jobs as tax revenue fell. The number of public jobs in 2011 shrank by 1.3 percent, about 280,000 positions, according to data from the U.S. Department of Commerce. More than half those positions were with local and state governments.

’Partisan Blather’

Policy Perspective, based in Trenton, “aims to help develop sound, progressive policies to provide New Jersey with a strong fiscal foundation and an equitable way of raising the money the state needs,” according to its website. The organization’s president, Gordon MacInnes, is a former Democratic lawmaker.

“This is partisan blather, based on a stunningly unrealistic world view that all things can be solved by bloated, ever-expanding state and local government and all the costs that come with it,” Michael Drewniak, a spokesman for Christie, said of the study in an e-mail.

Drewniak cited a May study by the New Jersey Chamber of Commerce that found more optimism about the state’s business climate than a year earlier. A June report by the New Jersey League of Municipalities Educational Foundation found that the state’s 2011 private job growth was more than triple 2010’s. Nationally for the same period, growth was less than double.

Christie, 50, a first-term Republican who took office in January 2010, reduced spending, cut aid to municipalities and schools and signed a law limiting annual property-tax increases to 2 percent.

Wounded Feelings

Government job losses that began with the recession in December 2007 continued through 2011, totaling 61,200, the report said.

The study seized on Christie’s “public criticism” of teachers and other workers, saying it increases low morale and the deterioration of services.

Drewniak said the report lacked any reference to a 70 percent rise in property taxes for 10 years before Christie’s inauguration. Democrats controlled the governor’s office during that period. The tax increases were driven by a 68 percent rise in local government spending.

Christie, who favors tax cuts to drive job growth, failed to win the Democratic-controlled Legislature’s approval for one for the current fiscal year.

More or Less

Thirty states that increased spending since the start of the recession fared better economically than the 20 that cut, according to a June 21 study by the Center for American Progress, a Washington-based non-profit whose research areas include the federal budget, the economy and poverty.

Private employment in the expenditure-cutting states “fell faster on average and further than states that increased spending,” study author Adam S. Hersch wrote.

“By 2011 the rate of private job losses in cutting states was 50 percent larger than that in expanding states, relative to their pre-recession private employment levels,” Hersch wrote.

New York, among the 30 that increased spending, had 9.1 unemployment in August. Pennsylvania, with 8.1 percent unemployment, and Connecticut, with a 9 percent jobless rate, reduced spending.

New Jersey has the fourth-highest jobless rate in the U.S. The August tally, 9.9 percent, was the state’s worst in 35 years. The national rate was 8.1 percent that month.

“The trend in unemployment is beyond dispute,” wrote Raymond Castro, a senior policy analyst.

Government jobs returned to New Jersey after past recessions, the study said. This time, their failure to reappear is stopping companies from hiring, too, the report said.

To contact the reporter on this story: Elise Young in Trenton at eyoung30@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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