When It Comes to Employment, NJ’s COVID Recovery Lags the Rest of the Nation

The US Bureau of Labor Statistics came out with its most recent state employment data and unfortunately New Jersey continues to lag the rest of the nation when it comes to umemployment and a shrinking labor force.

The overall unemployment rate for the nation was 6.1% in April 2021, but in NJ, it was 7.5%.  Only California (8.3%), Connecticut (8.1%), Hawaii (8.5%), Nevada (8%), New Mexico (8.2%) and New York (8.2%) were worse.

Hawaii and Nevada are particularly dependent on tourism, which crashed during the pandemic, but it is the case that four of the other underperforming states also rank as the bottom four states when it comes to high-taxes and poor businesses climates.  Using the Tax Foundation’s 2021 State Business Tax Climate Index, NJ comes in 50th, CA 49th, NY 48th and CT 47th.  The correlation is striking.

As would be expected, the size of the labor forces in these states also shrunk, meaning that fewer people were working or looking for work.  NJ again was an underperformer.  Since March 2020, NJ’s labor force decreased by -3.6% (that’s 163,000 fewer people in the labor force), with only CT seeing a worse decline (-8.6%).  The other states were: CA -1.9%, HI -2.6%, NM -0.6%, NV -2.1% and NY -0.7%.  Note that even tourism-dependent HI and NV have fared better than NJ.

It also happens to be true that ALL of the states with the highest unemployment rates are, like NJ, deep “blue” states with all branches of government controlled by Democrats.  Coincidence? Perhaps.

But we know that last year Gov. Murphy raised taxes on both corporations and the wealthy, as demanded by his public union pals, who always want higher taxes to fund more government spending on them.  And Murphy is happy to oblige with his ever-expanding budgets.  The hard economic data shows that Murphy’s tax policies are good for the special interests that support him politically but bad for the rest of the state.