This post will look at New Jersey's private-sector job picture on the county level, for a more granular look that reveals more of the complexity of our economy and the economy of our "economic neighborhood" of Delaware, eastern Pennsylvania, downstate New York, and southwest Connecticut.
When the media and political organizations discuss job growth in New Jersey, the analysis and argument almost always focuses on the state of
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| This graph from the New Jersey Policy Perspective is too blunt to be helpful, nor is it even 100% accurate that NJ lags PA. See below for a more nuanced take. Source. |
That state-level analysis has its place, but state-level analysis conceals that large portions of an apparently stagnant state are actually thriving and vice versa, ie, that large portions of a state whose growth is strong are actually stagnant or in decline.
In my opinion, the state-level comparisons that the New Jersey Policy Perspective uses obscure more than they reveal and their real purpose is to diminish Chris Christie, not shed light on NJ and local economic conditions. The success of New York State in the last 7-8 years has nothing to do with Andrew Cuomo but everything to do with New York City already being the country's economic and cultural capital, and a huge tourist attraction to boot.
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The source of my data is the Bureau of Labor Statistics's "Quarterly Census of Employment and Wages." Look under "County High-Level" if you want to verify anything here.
My comparison is Q1 of 2010 to March of 2017. I used Q1 of 2010 because that is when Chris Christie became governor and is near the bottom of the Great Recession.
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Job Gains/Losses, Absolute Numbers
As you can see, New York (Manhattan), Kings (Brooklyn), and Queens are significantly ahead of all other counties.
Combined, those three counties alone have enjoyed more than half of the New Jersey & Neighborhood job growth.
In fact, Manhattan's job growth of 335,000 is 100,000 more than all of New Jersey combined.
- New York State Job Growth is Really New York City Job Growth
New York State's job growth is extremely concentrated in New York City as well, with 73% of New York State's new private sector jobs being created in the Five Boroughs, even though they only have 43% of New York State's population. 40% of new jobs are in Manhattan alone, even though Manhattan has only 8% of New York State's population. - Hudson is the Strongest in New Jersey, but is not Dominant like Manhattan/NYC
Although Hudson County is the only New Jersey county to outperform the country, with 15.9% job growth, New Jersey's job growth is not as concentrated in Hudson as New York State's is in New York City or Manhattan.
Hudson County has 7.5% of New Jersey's population, but only gained 13.6% of New Jersey's new private sector jobs. This is impressive, but it is also less than Brooklyn's share of new NYS jobs, which is 17%.
Please notice the national average (in orange), is now included. - Reports of Exurban Death are Greatly Exaggerated
Although we hear a lot about how the suburbs are less appealing to people and businesses, several outer-suburban, automobile-dependent counties in New Jersey actually did ok. Somerset gained 12.8%. Middlesex gained 12.7%. Morris gained 7.3%. Ocean gained 10.9%, and Mercer gained 9.9%. Gloucester gained 9.3%.
Those gains are nothing to write home about, but it's better than what happened with New Jersey's denser, inner suburban counties. Essex gained only 2.2%, Bergen gained 4.4%. Union lost -1.4%. Passaic lost 1.2%.
They aren't dense, inner suburbs, but Hunterdon County only gained 3.6% and Warren County lost 4.3%. - Although train-line suburbs like Glen Ridge, Millburn, Montclair, South Orange, and Maplewood, have New Jersey's hottest real estate markets, their local job pictures are in the doldrums. Strong train-line real estate markets are not powered by New Jersey-employed buyers.
Although we hear quite a bit about an American Urban Renaissance a look at Philadelphia adds a critical nuance.
The New Jersey consequence of Philadelphia having modest economic growth is that proximity to Philadelphia isn't an asset like proximity to New York City is.
It's also curious that Rockland and Orange County's job growth are so much better than suburban counties on the New Jersey Long Island, and Westchester. The New Jersey Policy Perspective likes to attribute New Jersey's problems to an underinvestment in public transportation, as if contemporary and future NJTransit problems could have caused a statewide economic stagnation that began in 1997, but Rockland and Orange County get rail transit from... New Jersey Transit.
Could the growth be from Rockland and Orange counties's demographics?
Is there a Haredi Effect?
Ok, I'm going out on a limb here, so this is tentative, but does the growth of Haredi communities improve jobs growth?
Mostly the causality is economy growth causes population growth, but it's not a one-way causation and there is a countereffect in which population growth itself can drive economic growth and jobs.
As this 2015 report from the Urban Action Agenda on the Hudson Valley documented:
- The Urban Boom is Missing the City of Brotherly Love
Philadelphia County, while it was in fourth place for total jobs gained, actually has underperformed the
nation. Although Philadelphia's 44,000 new private sector jobs is impressive in light of Philadelphia's previous four decades, it is only a job growth rate of 8.5%, a figure significantly below the national average of 13.4%.
Philly: Doing Ok, but Not Booming
On the other hand, Philadelphia's recent gain is better than or the same as its own collar counties. Bucks County only gained 5.7%. Montgomery only gained 6.4%. Camden, over in NJ, only gained 6.7%. Delaware County only did slightly better than Philly, at an 8.9% gain.
The New Jersey consequence of Philadelphia having modest economic growth is that proximity to Philadelphia isn't an asset like proximity to New York City is.
- New York's Suburban Counties Underperformed the Country, but Outperformed Other Suburbs Suburban New York is lagging the nation, but holding its own. Suffolk (+8.4%), Nassau (+7.8%), and Westchester (+7.0%) lagged the nation, but as developed, mature economies you would expect that. Rockland actually slightly beat the national average with 13.6% jobs gain. Orange County isn't really suburban, but, for what it's worth, it had a strong 12.2% job growth too. Putnam County (not graphed and not really suburban either), only gained 6%.
Northeast New Jersey's economic performance is terrible. As mentioned before, Essex gained only 2.2%, Bergen gained 4.4%. Union lost 1.4%. Passaic lost 1.2%. Sussex lost 0.6%. More distant counties in NJ like Middlesex and Somerset did better, but they are not really in NYC's orbit in the same way.
Although NJ's suburbs did the worst, suburban Philadelphia and suburban Connecticut didn't do well either. As mentioned above, Bucks County and Montgomery County in PA only gained 5.7% and 6.4%, respectively. Connecticut did worse than that, with Fairfield County and New Haven County only gaining 4.9% and 5.2%, respectively.
It's also curious that Rockland and Orange County's job growth are so much better than suburban counties on the New Jersey Long Island, and Westchester. The New Jersey Policy Perspective likes to attribute New Jersey's problems to an underinvestment in public transportation, as if contemporary and future NJTransit problems could have caused a statewide economic stagnation that began in 1997, but Rockland and Orange County get rail transit from... New Jersey Transit.
Could the growth be from Rockland and Orange counties's demographics?
Is there a Haredi Effect?
Ok, I'm going out on a limb here, so this is tentative, but does the growth of Haredi communities improve jobs growth?
Mostly the causality is economy growth causes population growth, but it's not a one-way causation and there is a countereffect in which population growth itself can drive economic growth and jobs.
- Ocean County is home to Lakewood, New Jersey's fastest growing town. Ocean County's job
growth is 10.9%, and is fourth best in New Jersey, after Hudson, Somerset, and Middlesex and significantly better than its neighbors. Monmouth is only at 6.9% growth. Burlington is only at 7.8%. Atlantic was at a 11.4% loss.
Job Bringers?
Lakewood has gained over 26,000 people since the bottom of the recession. Presumably most of the new population is children, but Ocean County's job gain is actually only 13,000. It's likely a large portion of that growth is in Lakewood or from Lakewood consumers.
As this 2015 report from the Urban Action Agenda on the Hudson Valley documented:
The greatest numerical increase in the Hudson Valley over the 13-year period was in the Town of Ramapo (Rockland County), with a 19,431 person increase. Ramapo's total population in 2013 - 128,336 - includes the population of the villages within its boundary, including New Square, Kaser and Spring Valley. Thus their rapid growth contributes to Ramapo's booming population. Of the five municipalities that saw 45% or more population growth, three (Kiryas Joel, New Square and Kaser) are almost entirely Hasidic or Jewish Orthodox communities.
To demonstrate the influence of these villages on overall county growth, if Kiryas Joel were factored out during the 2000-2013 period, Orange County's growth rate would drop from 9.5% to 7.6%. Kiryas Joel accounted for 23% of the county's total population growth during the time period. In Rockland County, if Kaser and New Square's growth were factored out over the 2000-2013 time period, the county's growth rate would drop from 9.9% to 8.7%.
- Atlantic City's Implosion Has Hurt, but without It, New Jersey's Growth Would Still LagAtlantic County lost 11.4% of its private sector jobs, but Atlantic County is small, so that 11.4% loss is only 12,782 private sector jobs.
From Q1 2010 to 2017, New Jersey only gained 220,000 private sector jobs, so even in a hypothetical scenario where Atlantic City didn't lose any private sector jobs or gained 12,782 jobs, New Jersey's economic performance would still lag the nation. If, hypothetically, Atlantic County gained 12,782 jobs, NJ's private sector job growth would only be 7.2% instead of 7.0%.
The same effect of smallness goes for Cape May County. Cape May lost 19.6% of its private sector jobs, but that's only 6,127 jobs.
This is a Better Look at NJ's Comparative Job Growth
I disaggregated North and South Jersey here, but if they were combined, it would be clearer that NJ is ahead of Pennsylvania since most of NJ's population is in North Jersey.
New Jersey's job performance is often ranked below Pennsylvania's (like the NJPP's example in the top of this post), but that is only when you compare from the bottom of each state's respective jobs nadir.
When you compare from most common points of time, like I did by using Q1 of 2010, New Jersey's job performance is actually better.
Excluding New York City, New Jersey actually outperformed the rest of New York State.
Can New Jersey Be Saved?
The tremendous job growth in New York City might lead people to dream that New Jersey's salvation is to build that Gateway Tunnel so that New Jerseyans can get to jobs in New York; or, New Yorkers can move to New Jersey.
Phil Murphy says this sort of thing, but I'll use a quote from Justin Fox, my favorite econ writer, who suggests the key to saving to NJ is to build a tunnel:
OK, providing reliable access to New York City is a good way to keep New Jersey's workforce employed, but unfortunately it's no way to keep New Jersey's Treasury filled, since anyone who works in New York State pays income taxes to Albany, even if he lives in another state.
Indeed. New Jerseyans pay more than $3.1 billion a year in New York State taxes, versus only $616 million that New York residents pay to Trenton.
New Jersey could build the Gateway Tunnel and double capacity to New York City for commuters, but it would do little directly for New Jersey's Treasury and funding for our neglected public services and pensions.
I worry that policy-makers are too quick to write off suburbia and exurbia, but a pathway forward for New Jersey might be to invest in strengthening Hudson County's role as New York City's "Sixth Boro." This might have to include offering tax incentives to businesses willing to come to Hudson County in order to build up a denser mass of business activity.
Ironically, the state, under Phil Murphy, may be about to embark on a multi-billion dollar tunnel project that, in fact, only takes people under Hudson County on their way to Manhattan, not to New Jersey at all.
Regardless of the path forward for New Jersey, I don't think Christie deserves all of the blame for our problems. As shown above, the job growth in our part of the country is heavily concentrated in New York City alone. Philadelphia, its suburbs, all of downstate New York, and all of Connecticut have also lagged the nation.
Although Christie has made many mistakes, New Jersey is up against powerful macroeconomic forces that are not his making.
Let's keep that in context.
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| "South Jersey" is Atlantic, Burlington, Camden, Cumberland, Cape May, Gloucester, Monmouth, Ocean, and Salem. |
I disaggregated North and South Jersey here, but if they were combined, it would be clearer that NJ is ahead of Pennsylvania since most of NJ's population is in North Jersey.
New Jersey's job performance is often ranked below Pennsylvania's (like the NJPP's example in the top of this post), but that is only when you compare from the bottom of each state's respective jobs nadir.
When you compare from most common points of time, like I did by using Q1 of 2010, New Jersey's job performance is actually better.
Excluding New York City, New Jersey actually outperformed the rest of New York State.
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Can New Jersey Be Saved?
The tremendous job growth in New York City might lead people to dream that New Jersey's salvation is to build that Gateway Tunnel so that New Jerseyans can get to jobs in New York; or, New Yorkers can move to New Jersey.
Phil Murphy says this sort of thing, but I'll use a quote from Justin Fox, my favorite econ writer, who suggests the key to saving to NJ is to build a tunnel:
I have no idea what combination of roads and trains and bike lanes and hyperloops postsuburban New Jersey will need to thrive, but I'm guessing that good connections to resurgent New York City will be really important. So it can't have helped that two of the signature actions of Chris Christie's governorship -- killing a plan to dig a new rail tunnel to Manhattan in 2010 and causing a horrific traffic jam at the George Washington Bridge in 2013 -- have involved cutting his state off from the city. Blame him for that, definitely.
OK, providing reliable access to New York City is a good way to keep New Jersey's workforce employed, but unfortunately it's no way to keep New Jersey's Treasury filled, since anyone who works in New York State pays income taxes to Albany, even if he lives in another state.
Indeed. New Jerseyans pay more than $3.1 billion a year in New York State taxes, versus only $616 million that New York residents pay to Trenton.
The New Jersey share of New York's total personal income taxes stands out even in the context of the larger state's enormous tax base: for example, the income taxes paid by New Jersey commuters equaled the total income tax owed by 1.3 million workers and small-business owners in the 17-county Western New York region, including metropolitan Buffalo-Niagara Falls and Rochester.
New Jersey generated more New York State income tax than the 1.1 million filers living in Brooklyn -- more, for that matter, than any New York City borough except Manhattan.
New Jersey could build the Gateway Tunnel and double capacity to New York City for commuters, but it would do little directly for New Jersey's Treasury and funding for our neglected public services and pensions.
I worry that policy-makers are too quick to write off suburbia and exurbia, but a pathway forward for New Jersey might be to invest in strengthening Hudson County's role as New York City's "Sixth Boro." This might have to include offering tax incentives to businesses willing to come to Hudson County in order to build up a denser mass of business activity.
Ironically, the state, under Phil Murphy, may be about to embark on a multi-billion dollar tunnel project that, in fact, only takes people under Hudson County on their way to Manhattan, not to New Jersey at all.
Regardless of the path forward for New Jersey, I don't think Christie deserves all of the blame for our problems. As shown above, the job growth in our part of the country is heavily concentrated in New York City alone. Philadelphia, its suburbs, all of downstate New York, and all of Connecticut have also lagged the nation.
Although Christie has made many mistakes, New Jersey is up against powerful macroeconomic forces that are not his making.
Let's keep that in context.
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- Biggest Real Estate Gains, Losses in NJ
- Divergent Fates of NJ's Big Cities
- NJ Lags the Nation in (Almost) Every Economic Category
