In the previous diary on NJ JOBS we examined the wrong track approach which emphasizes reducing government, budgets, and debt. By putting people back to work, however, the state can regain tax revenues needed to reduce indebtedness and replenish our unemployment, transportation, and pension/health funds. More important, it brings a measure of relief, security and optimism, sorely lacking now, to people who want to hold on to their home, put food on their table, pay bills, and reduce their reliance on government support. The argument should not be, as Christie says, over jobs for the private sector vs. the public sector because both are essential to our economy and our well-being.
Our state government, famous for imposing objectives on organizations it funds, could set its own objective for lowering unemployment. A decrease of just 1%, from 9.5% to 8.5%, in the unemployment rate would add about 45,000 new jobs for those who are now struggling. At an average salary of $25,000 it would add over $1 billion to our economy, part of which would go to taxes, strengthening the state’s revenues. A substantial reduction in unemployment to 5% or 6% is a longer term objective which entails retooling education, innovation and automation for new jobs replacing those which are no longer needed and in which we are no longer competitive. A state goal of 1% or 2% is not an impossible dream.
Some ideas which would strengthen jobs, the economy and tax revenues and cost the state nothing, but which our current governor would reject outright, include legalizing same-sex marriage and marijuana. Increasing the tax rate for millionaires, anathema to Christie, remains sensible. Funding family planning clinics is a common sense health policy and also brings in about 9 federal dollars to our economy and more jobs for each dollar the state spends. Christie’s selective decisions to refuse federal funds is ideological pettiness and injurious to the state.
One important area in which to foment new job opportunities is manufacturing. Growth of the N. J. labor force is inextricably entwined with the ability of industry to grow new business models. Just North Jersey alone, which boasted 156,000 factory workers two decades ago now has below 60,000. As Rep. Rush Holt (D-12th) succinctly stated at a Rutgers manufacturing forum, “In Washington, recently we’ve been having a lot of distractions, but revitalizing manufacturing should have been the main interest all along.” Such can be said about our state as well. In a still-operating Totowa factory recently visited by Rep. Bill Pascrell (D-8th), little appeared high-tech. Some of the machines go back to the 1940s. One set of machine benches was computerized, with small monitors from the 1980s.
Our President today visited nearby Paterson, once a thriving industrial center, but beset by horrific floods and a decimated manufacturing base. Many factories have closed and others like the one in Totowa have outdated equipment and can not compete in terms of labor and raw material costs with factories oversees. New Jersey proudly announced last month that it had reached a U.S. solar-energy milestone – more than 10,000 solar installations statewide, second behind only California. The milestone, however, is in installing not manufacturing the panels. Paterson Mayor Jeffrey Jones is set to confer in October with Chinese manufacturers about using the city’s abandoned shop floors for building solar panels. Combining now a foreign manufacturer who wants to set up a facility in the U.S. with ongoing and strengthened American solar panel research and job retraining are steps in the direction of job creation.
In helping industry cope with its problems sometimes our state government has reserved its largesse for the larger, splashy companies at the expense of smaller firms which also need assistance in these changing times. In February, the New Jersey Economic Development Authority approved $41.2 million in tax credits to Campbell Soup for investing $52 million in an upgrade of its headquarters which the company said would generate about 100 new jobs in Camden. Now Campbell has reduced its staff instead, and the EDA will re-evaluate the credits. About 80% of New Jersey’s 11,000 manufacturers employ 50 or fewer workers. However, much of the research and development is conducted by these smaller firms as they refine, improve, and modernize their systems. Within the manufacturing sector, as with other sectors, the key is correctly targeting tax cuts, incentives or loans to firms which have the best prospects for spurring job opportunities. Smaller firms can often be more agile and aggressive.
There will be more on putting people back to work in the next installment of NJ JOBS.