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-- Economy
* Economy * Employers * Growth Companies * Venture Capital * Labor Unions * Real Estate * Transportation * Health * Law Firms 
-- Overview Since its early colonial settlement, New Jersey's economy has evolved from its first base in farming and trade, to manufacturing and, most recently, to reliance on service and technology-based industries. The influence of private sector business ventures with New Jersey government also long has been controversial. Commencing in the 1830s, the state government's close--and often corrupt--relationship with the Camden and Amboy Railroad, which financed much of the state government's budget through its operations, led to cynics branding New Jersey as "the state of the Camden and Amboy." Toward the end of the century, the state legislature's approval of laws catering to the interests of giant corporate trusts and monopolies to attract them to legally incorporate in the state brought charges by a leading muckraker that New Jersey was a "traitor state." The state's role as a national leader in manufacturing--which evolved after the Civil War with its key location on the central railroad corridor, access to raw materials and a workforce of recent immigrants--began to erode in the latter years of the last century. In the 1970s, particularly after the spike in energy prices following the Arab oil embargo in 1973, New Jersey lost both existing and potential investment as other locations offered advantages in lower-cost labor, real estate, taxes and energy supplies, resulting in the state experiencing its highest levels of unemployment since the Great Depression of the 1930s. More recent economic trends have seen the growth of technology-based manufacturing industries in electronics, computers and medical devices, as well as a shift toward service industries such as finance and health care. In 2020, New Jersey suffered the economic impacts of the COVID-19 Pandemic which led to lockdowns and sharp cutbacks in employment, spending and other activity. -- Gross Domestic Product
New Jersey had the eighth largest economy of the 50 states in 2017, as measured by Gross Domestic Product, the most frequent measure of economic activity which includes wages and salaries, income earned by entrepreneurs and corporations and business taxes that count as a business expense. The state’s current-dollar GDP was $602 billion, and grew 1.7% over the year, lagging the 2.2% increase for the nation as a whole. On a per capita basis, New Jersey had $60,684 in GDP for each person in its population in 2018, the tenth highest of the states led by Massachusetts with $71,456 and compared to the national average of $56,717. * New Jersey Economy at a Glance, Bureau of Labor Statistics, US Department of Labor * Regional Economic Accounts, Bureau of Economic Analysis, US Department of Commerce -- Employment
In 2017, New Jersey's total full and part-time employment was approximately 5.4 million persons. The leading sectors of private employment were trade, transportation and utilities; education and health services; professional and business services; and leisure and hospitality. After lagging the nation and nearby states in employment since the recession which began in 2008, the state's unemployment rate steadily improved into 2019, but sharply declined as businesses closed and laid off thousands as a result of the COVID-19 pandemic. Even before the the COVID-19 reversal, New Jersey's recovery from the recession following the 2008 financial crisis had been affected by contraction in financial services, pharmaceuticals and casino-hotels. In financial services, such major state employers as Merrill Lynch merged with other firms resulting in massive job losses. Pharmaceuticals, a traditional leader in both the locations of executive headquarters and manufacturing facilities, has gone through a period of consolidation and mergers that has reduced employment; New Jersey pharmaceutical manufacturing employment, which accounted for one-fifth of all jobs in the sector in the US at the end of the last century, has declined so that in 2015 it was less than 10% of the jobs in the nation. Casino-hotels have experienced the most dramatic reversals, with direct employment--which once peaked at over 40,000 jobs--was cut by a third over the 2012-2017 period with the closing of four of the City's 12 casinos, resulting in an unemployment rate in Atlantic City in 2016 that was twice the level of that for the state as a whole. The re-opening of two of the closed casinos in 2018--the new Hard Rock and the Ocean Resort--marked a recovery in the Atlantic City employment situation. * New Jersey Economy at a Glance, Bureau of Labor Statistics, US Department of Labor * Bureau of Labor Statistics, US Department of Labor -- Largest industries
The largest sector in New Jersey in 2018 was finance, insurance, real estate, rental, and leasing. This industry accounted for 24.8% of New Jersey GDP, compared to 20% for the nation, and had a 0.8% real decline from 2013. The second largest industry was professional and business services, which accounted for 15.3% of New Jersey GDP, compared to 12% for the US, and had 1.0% real growth. The largest contributor to real GDP growth in New Jersey was nondurable goods manufacturing, with computer and electronic manufacturing comprising approximately one-fourth of all manufacturing output in 2013. * Regional Economic Accounts, Bureau of Economic Analysis, US Department of Commerce -- Personal income
State personal income across all states increased 4.0% at an annual rate in the third quarter of 2018, an acceleration from the 3.4% increase in the second quarter, according to estimates released by the Bureau of Economic Analysis in December 2018. The percent change in personal income across ranged from 6.2% in Nevada and Washington to 2.1% in Missouri, with New Jersey's growth at 4.2%. As with other economic measures, it is expected that there will be significant declines in income during 2020 related to the COVID-19 pandemic. In 2018, New Jersey had a median income for all households of $76,475.per capita personal income of $64,537, which ranked 4th in the United States and was 125% of the national average of $51,640. 2017, Somerset County had the highest per capita income at $96,548; Passaic County was the lowest at $48,152. Nationally, the 2017 PCPI reflected an increase of 4.3% from 2016, above the 2016-2017 national change of 3.6%. Median household income in 2017 was $76,475 in New Jersey, behind only Maryland's $78,91. Overall, American households earned a median income of $57,652 in 2017, up from $55,322 in 2016. according to the US Census Bureau's American Community Survey. New Jersey had the highest concentration of millionaires in 2018 of all 50 states, with 293,992 millionaires comprising 8.95% of its 3.2 million households, ahead of #2 Connecticut (8.89%) and #3 Maryland (8.85%). 8.95% of MILLIONAIRE HOUSEHOLDS: 293,992 TOTAL HOUSEHOLDS: 3,283,467 CONCENTRATION OF MILLIONAIRES: 8.95% MEDIAN INCOME FOR ALL HOUSEHOLDS: $76,475 MEDIAN HOME VALUE: $321,100 As in the nation, the issue of lagging wage growth and income inequality have increasingly become a focus of public policy debate. Nationally, median household in 2016, the most recent data as of March 2019, was about the same as in 2000, a reflection of the lingering effects of the Great Recession and an earlier recession in 2001. The median income of lower-income households in 2016 ($25,624) was less than in 2000 ($26,923). Only the incomes of upper-income households increased from 2000 to 2016, from $183,680 to $187,872. * New Jersey Per Capita Personal Income 1930-2019, Federal Reserve Bank of St. Louis * Bearfacts New Jersey, Bureau of Economic Analysis, US Department of Commerce * Local Area Personal Income, Bureau of Economic Analysis, US Department of Commerce * American Fact Finder, US Census Bureau -- Poverty
In 2017, the national poverty rate was 12.3%, representing 39.7 million people in poverty living below the federal poverty level of $24,000 for a family of four. In New Jersey, the rate was 10%, down from 11.4% in 2013, but still higher than the 8.7% rate in 2004. Poverty levels for minorities are significantly above the state average; about 20% of African-American and Hispanic New Jerseyans live below the federal poverty level. Despite recent progress, Newark, Camden and Paterson remain among the poorest large cities in the nation. Poverty levels were above 50% in Passaic, Lakewood, Paterson, Trenton and Newark. * Income and Poverty in the US 2017, US Census Bureau * American Community Survey 2013-2017, US Census Bureau |
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-- Government subsidies and incentives
New Jersey provides various subsidies and tax credits through several programs, with most of them administered through the state Economic Development Authority created in 1974 by Governor Brendan Byrne. The amount of these subsidies was substantially increased during the Christie Administration; an audit released in January 2019 prepared at the direction of Governor Murphy criticized the lack of oversight of job creation data by the EDA, which has been responsible for nearly $11 billion in grants and tax credits intended to prevent companies from leaving the state or encouraging them to expand. The largest portion of that amount--$3.9 billion--was from Grow NJ, created by a 2013 law under the Christie administration. The report also found little evidence that the incentives had influenced expansion or site decisions and that the program had shifted from its original goal of creating new, permanent jobs to preventing the loss of jobs "at risk" of moving out-of-state. In some cases, the report found that the aid had contributed to companies simply relocating within the state from one town to another. * New Jersey Economic Development Authority * New Jersey Economic Development Authority: A Performance Audit, January 2019, New Jersey State Comptroller Economy * Economy * Employers * Growth Companies * Venture Capital * Labor Unions * Real Estate * Transportation * Health * Law Firms |