NJ is returning to pre-pandemic employment rates, but underlying factors are unclear

When analyzing what’s behind the economic benefits, it’s hard to pinpoint one particular policy that could be responsible for the turnaround.

By Matt Skoufalos | November 22, 2022

US BLS Unemployment, Pre and Post Pandemic. Credit: U.S. Bureau of Labor Statistics.

After charting historic unemployment during the early stages of the novel coronavirus (COVID-19) pandemic, unemployment in South Jersey reached an all-time low in late September 2022, signaling to some local leaders that regional economy is recovering.

Unemployment in New Jersey peaked in May 2020 with a high of 15.8 percent, or 724,973 people, according to data from the U.S. Bureau of Labor Statistics (BLS).

From April to August 2020, New Jersey’s unemployment rate hovered in the double digits before finally falling to 8.3 percent (379,740 people) in September 2020.

By September 2022, they had dropped to 3.3 percent (154,119 people), a level unseen since March 2020 (154,311 people), and just a hair away from the historic lows of 3.2 percent from April to June 2019 (148,806 to 150,606 people).

Statewide, 21 individual counties outperformed the national average in percentage terms as of September 2022, with an unemployment rate of 3 percent or lower. Among them was Camden County, where only about 8,300 people (3.0 percent) of a labor force of 270,700 were unemployed that month.

Camden County state officials were quick to tout those returns Tuesday, citing the “lowest unemployment rates in record-keeping history” for both Camden County and Camden City.

“According to the state’s LWD report dated Nov. 2, Camden City’s unemployment rate fell to 5.5 percent, while the county’s fell to 3 percent in September 2022,” the county government wrote in a statement. “In July 2020, during the height of the pandemic, the unemployment rate was 22 percent for the city and 16.2 percent for the county.”

Camden County commissioner-director Lou Cappelli cited about $40 million in state and federal aid for business owners as essential to keeping workers employed during the worst of the pandemic.

“Without that help, we wouldn’t be looking at the unemployment numbers as we have them now,” Cappelli said. “That was crucial to keep businesses alive. Those companies are not only alive, they are also expanding.”

The commissioner said some 40 businesses in Camden County expanded in the past year, including healthcare facilities such as Jefferson, Virtua and Cooper; however, he added that he believes “it’s your mom-and-pop small businesses that have led the way.”

Cappelli also cited a strong local workforce as critical to high local employment rates and future planned economic growth. He said additional investment in job training is also needed to continue to provide the workers local businesses need to continue growing.

Protesters gathered at the Holtec International campus in 2018 to address the CEO’s comments about the city’s workforce. Credits: Matt Skoufalos.

“We will continue to do what we can to help small businesses in Camden County,” Cappelli said.

“We will do our best to attract new businesses here and others to expand.”

The commissioner-director said he also anticipates “some upcoming developments that will lower this rate even further,” including two projects in Camden City and another in the county.

“The fact that we have a good workforce is certainly one of the reasons why unemployment rates have fallen so drastically,” Cappelli said.

“Camden County is a good place to work and live,” he said. “We have great amenities to encourage people to stay here.”

While the unemployment forecast shows a state en route to economic recovery, Peter Chen, senior policy analyst with New Jersey Policy Perspective of Trenton, said it’s important not to assume that the numbers reflect individual policy actions.

To begin with, Chen pointed out that New Jersey was one of the states hardest hit by job losses during the pandemic, “so a lot of recovery was needed.”

“Sometimes it feels like we’re looking through the mirror and people have forgotten that the pandemic was an economic disaster on par with the biggest economic disaster you can imagine,” he said. “It hit globalized economies like New York and Philadelphia really hard, and we’ve been fighting the fallout for a long time.”

Overall, employment is increasing throughout New Jersey, Chen said, particularly in terms of demand for wage workers, “especially low-wage workers, who have long needed a boost,” he said.

“Nationally, we’ve seen a lot of job growth and unemployment in general fall as more people look for work and jobs pay more,” Chen said. “I certainly think New Jersey has caught up with and surpassed other states in its unemployment rate in recent years, which is more on track with historical trends.”

However, Chen also said those gains were largely due to federal stimulus packages and COVID-19 relief measures that have now been exhausted. The next challenge for the state and national economy will be to cope with “the effects of real income on purchasing power,” he said.

Total nonfarm employment, 2020-2022. Credit: U.S. Bureau of Labor Statistics.

“Most of the [American] The money from the bailout that went to municipalities went to closing gaps in tax revenues and payroll, trying to make sure people were still in work,” Chen said.

“That’s good. That was a huge problem during the Great Recession.

“But since most people also did the same thing, it’s hard to point that out and say, ‘We improved our unemployment numbers because we spent it,'” Chen said.

“Strengthening state and local employment was extremely important; moving forward, states and municipalities will have to work harder to retain the employees they have.

“Without more nuanced research and investigation into the root cause of some of the changes in unemployment, especially when you think about a city like Camden, it’s very hard to say whether or not a particular set of development priorities made the difference.” he said.

Another complicating factor Chen pointed out is the origin of the month-over-month BLS data, which are the results of data surveys of both households and small businesses. While mostly in agreement, the declining response rates are starting to show some gaps between the two, leading him to question the accuracy of the data.

“Month-to-month data is very noisy,” Chen said. “The error bars in these calculations can be large, especially when you zoom in on increasingly smaller data sets. I’d be careful about using monthly fluctuations in the unemployment rate, especially for small regions, to tell us what’s happening.

Unemployment rates “are the aftereffects” of economic policies, including relief packages, Chen said, which is why he was hesitant to conclude that any post-COVID economic development policies are directly responsible for improvements in unemployment rates.

“Declining unemployment rates, especially for a community like Camden City that has been going through very tough times economically, is good,” he said. “But to say that the decline is specifically related to an economic development policy is very difficult without additional information.

Peter Chen, senior policy analyst at Trenton-based New Jersey Policy Perspective. Credit: NJPP.

“All this stuff is subject to state-level and larger-level macroeconomic forces, so it’s very hard to say that one state-level or local-level strategy is responsible,” Chen said.

“Ever since [unemployment] before everyone goes down, there may be broader factors at play.

Camden City resident Ronsha Dickerson said the jobs report is encouraging but not necessarily in line with conditions in her community.

Dickerson is an organizer of the Camden We Choose coalition, which this year successfully lobbied for a measure requiring Camden City employers to disclose how many local residents they employ.

She said the jobs most available to young people in the city are “low-pay jobs in sanitation or cleaning.”

“It feels good to hear we’re in a better place,” said Dickerson. “However, when I’m in the community, the jobs offered don’t seem to match what we should be getting paid.”

Without job-specific training, Dickerson said Camden residents won’t be able to take full advantage of the city’s job opportunities regardless of local business expansion.

“There’s no harm in having all these people come to Camden and say they want to create opportunities,” Dickerson said. “Until we see the companies here in our high schools helping seniors come out and say, ‘We’ve got great jobs, stay in this town, we’ll hire you,’ the people of Camden won’t get jobs that will make them will help them survive in the city they live in.”

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