Stories about economic progress, or lack thereof, often tend toward one of two extremes: boom or bust. This week, for example, the Times of Trenton ran a banner headline about job loss in Mercer County, which may or may not result from a merger between Bristol-Myers Squibb and a French company, Sanofi, Aventis, that may or may not take place much later this year. And on page 12 of this issue, U.S. 1 takes a look at the health of the large pharmaceutical companies.
Once a year we at U.S. 1 also try to take a dispassionate, long-term look at our region’s progress. While our region’s news continues to be mostly good (see page 15), a business organization’s view of the statewide picture is more bleak:
To the Editor:
NJBIA Director Asks — What Progress?
Employment growth slowed to a crawl in 2006. For the full year, the state’s private-sector employers created only 15,900 new jobs, a gain of just one half percent.
This makes 2006 the second weakest year for job growth in 30 years, apart from periods of outright recession. And the current rate of growth is one third of that seen in the nation as a whole.
Unfortunately, weak job growth has been the rule, not the exception, over the last several years. In a normal economic expansion, New Jersey can expect to add about 40,000 new private-sector jobs annually. In the expansions of the 1980s and 1990s, we enjoyed a gain of about 70,000 jobs a year. Today we’re not even close. Why aren’t we creating more jobs, and what can be done about it?
Years of misguided state policies have raised the cost of doing business here and harmed New Jersey’s economic competitiveness. To counter this trend, the state must keep job-growth policies at the top of its agenda.
A quickly expanding economy produces new jobs and tax revenues that can support state government — lessening the need for tax hikes. Conversely, a slow growing or stagnant economy can prolong state budget deficits and create pressure for higher taxes, particularly if government fails to cut costs. Unfortunately, we find ourselves in the latter situation.
Due to high taxes and other high costs of doing business, New Jersey is now far less competitive than it used to be. Only 17 percent of employers responding to NJBIA’s 2007 Business Outlook Survey said New Jersey is a good place for business expansion, the lowest percentage in the survey’s history. Survey respondents also identified the overall cost of doing business in New Jersey as one of their worst problems, just behind the two top problems, health insurance costs and property taxes.
New Jersey also ranks near the bottom of most national surveys that measure how attractive the 50 states are to employers. The Small Business and Entrepreneurship Council, in its small-business survival index, ranks New Jersey dead last among the 50 states for its policies supporting small business.
Whether you look at the cost of health insurance, energy, or taxes, New Jersey finds itself near the top of every cost-of-business index. Just as it is expensive to live in New Jersey, so, too, it is expensive to operate a business here. It stands to reason that businesses are more likely to locate in other states.
Fortunately, Governor Corzine has made economic growth one of his highest priorities. With the establishment of an Office of Economic Growth and the release of his Economic Growth Strategy, the Governor has demonstrated his awareness of the need to adopt well-defined goals and plans to encourage job creation.
But the state must become more business friendly. This means lowering the cost of health insurance, energy and taxes, decreasing regulatory burdens, and generally adopting a better attitude toward the state’s employers.
The major omission in the Governor’s Economic Growth Strategy is its failure to identify the state’s manufacturing industries as a sector that deserves state attention and assistance. This sector of the state economy still supports, directly and indirectly, about half a million jobs that pay good wages and benefits. It is also of the utmost importance that New Jersey lawmakers resist proposals that would impose costly new rules and mandates on employers.
New Jersey must change its reputation and focus on policies that will help bring new jobs to this state and retain the jobs we have now. Otherwise, employers will continue to take sorely needed jobs to other states where the cost of doing business is lower and the attitude toward business is friendlier.
President, New Jersey Business & Industry Association
Bristol-Myers Squibb is building a large scale biologics manufacturing facility in Devens, Massachusetts, not a generic manufacturing plant in upstate New York, as was incorrectly stated in the January 24 article on the sale of four B-MS buildings in the Route 1 corridor.
New York had been among the states competing for the Massachusetts facility. In Syracuse, New York, B-MS had converted a former penicillin-making facility to manufacture biologics on a small scale.