New Jersey economy surges, but people are still anxious State races aheadto establish sustainable new pattern of growth


MORRISTOWN, N.J. -- Five years after the end of the deep, punishing recession of the late 1980s and early 1990s, New Jersey's economy stands on the brink, finally, of full recovery.

Fueled by industries such as consulting and law, accounting and telecommunications, the state has raced ahead of New York and Connecticut and, economists say, has achieved a sustainable new pattern of growth. As of August, it had regained all but 3 percent of the jobs lost in the downturn.

New Jersey's resurgence, economists say, owes much to its economic diversity. Going into the 1990s, the state was far less dependent on military manufacturing, for example, than Connecticut or Long Island, where the end of the cold war laid whole industries to waste. Many of New Jersey's largest corporations did not contract with the same severity as did those in New York and Connecticut in the waves of early 1990s downsizing.

And the recession, while far worse here than in the rest of the country, was also milder than in New York City, which lost 10 percent of its jobs and has gained only 40 percent of them back, or Connecticut, which also lost 10 percent and has recaptured about 66 percent.

"We have emerged in a very enviable position," said Joseph J. Seneca, an economist at Rutgers University and the chairman of the New Jersey Council of Economic Advisors, which reports on the economy to the state government. "I see steady, modest growth for the rest of the decade."

Business people also credit Gov. Christine Todd Whitman with making the state more business friendly, by providing help to companies and making the state bureaucracy easier to deal with. But she is apparently not getting the same credit from voters. The political maxim that an incumbent always benefits from a growing economy is being challenged, with polls showing anxiety among voters about their place in the new prosperity.

'Things have changed'

"Things have changed, people have changed - in the 1990s, decision making and spending are more tempered," said Bob Lowenstein, the owner of Jodo Gifts, an institution here on the Morristown green since before World War II. Lowenstein, standing outside his shop on a recent warm day, paused for perhaps the fifth or sixth time to say hello to friends or customers passing by.

"In the 1980s, you didn't have to work so hard," he said. "It was all more free flowing."

Economists agree that New Jersey's economy, from its corporate boardrooms to its smallest towns, does move to different rhythms in the late 1990s and that any analysis of strength is inevitably followed by a string of caveats.

The state lost about the same percentage of its jobs as the rest of the region - 7.1 percent of its total job base disappeared from to 1992, compared with about 7 percent in New York and 10.2 percent in Connecticut.

But it recovered differently, and suffered less from the corporate job cutting that plagued its neighbors. From 1991 to 1996, New Jersey actually gained jobs in companies with more than 1,000 employees. New York and Connecticut both lost heavily.

At the same time, the state's population growth has stagnated. Its cost advantage over New York City, long a great trump card in the region, has narrowed. Once a center of heavy industry, the state now has fewer manufacturing jobs than at any time since the eve of World War I. The cities and rural southern areas have been left behind. And while New Jersey may be a standout performer locally, the rest of the United States has moved ahead much faster. Most places made up the jobs lost in the recession years ago.

In her speeches and commercials, Governor Whitman has made the economy a cornerstone of her campaign for re-election, stressing repeatedly how much things have improved and how much promise the economy holds out for the future.

"The message is that New Jersey is stronger economically than it was four years ago, with far more jobs and lower taxes and a future that holds great promise and opportunity for all New Jerseyans," she said in a statement. "Jersey has come a long way."

Her opponent, State Senator James E. McGreevey, said that the state's job gains, a total that includes many low-wage jobs, must be measured against what has been lost, particularly in manufacturing.

"New Jersey will not retain its strategic position as a world-class economy by permitting its manufacturing base to hemorrhage while replacing it with food stores," McGreevey said.

People like Lowenstein, the card store owner, say it is easy to see places where the state's bounty has not penetrated, or where things have actually gotten worse in the 1990s.

All he has to do is look down the block from his store. Four major businesses in prime locations facing the green have closed in the past few years. Barnes & Noble got rid of its smaller stores to focus on superstores. Macy's closed what it called "underperforming assets." A clothier based in Boston returned there. Shoetown went out of business.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.