The latest unemployment numbers are due out this week. Throughout the recovery from the Great Recession, New Jersey’s unemployment rate has remained steadily higher than the national unemployment rate, as well as our neighbors’.

What gives?

To put New Jersey's numbers in perspective, Star-Ledger editorial writer Jim Namiotka spoke with Rutgers University economist Joseph J. Seneca. This is an edited transcript of their conversation:

Q. Let's put New Jersey's unemployment rate in context…



A. Both the nation and New Jersey have just come through an extremely harsh recession that has taken a deep toll on employment; thus, all eyes are focused on regaining those lost jobs. For perspective, in the Great Recession, the United States lost more than 8.7 million jobs, both private and public — a loss of 6.3 percent.

If you look at only the private sector, from December 2007 to February 2010, the nation lost more than 8.8 million private-sector jobs, a decline of 7.6 percent.

From January 2008 to February 2010, New Jersey’s private-sector losses totaled 248,600 jobs. That’s a 7.2 percent loss, slightly below the 7.6 national decline.

These are harsh job losses; no region across the country was immune. In the recovery, the nation’s GDP has increased by 3.5 percent, indicating that the country is producing more now than it did before the recession began.

However, total employment is still more than 2.5 million jobs below where it was in December 2007. That means that, nationally, we’re producing more than we did before the recession, but we’re doing it with many fewer people employed.

Q. New Jersey's unemployment rate is stuck around 9 percent, much higher than its neighbors and the national unemployment rate. What's going on?



A. There are two surveys that are used each month to measure labor market conditions — the payroll survey and the household survey. The payroll survey measures full-time workers, part-time workers, private- and public-sector workers.

During the recovery, through the latest payroll survey data, New Jersey has added 127,800 private-sector jobs — a little over 51 percent of the private-sector jobs lost during the downturn.

That’s steady improvement. From December 2011 to December 2012, we added 59,100 private-sector jobs. And in the first quarter this year, we added 13,200 private-sector jobs, on pace for 53,000 jobs for 2013. Gains are also beginning to appear in public-sector jobs.

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The household survey determines the unemployment rate. It’s a much smaller sample and more volatile.

For the first quarter of this year, there were 15,300 jobs (private- and public-sector) added in New Jersey.

But the household survey shows a gain of only 2,000 jobs over the same time, and a sizable decline in the labor force, with 25,000 fewer people in New Jersey seeking work. So you have the unemployment rate going down from 9.5 percent in December 2012 to 9 percent in March 2013, but it’s mostly going down for the wrong reason — because the labor force fell.

The difference between the national unemployment rate and New Jersey is because we have higher labor force participation rates in New Jersey — proportionately more people looking for work, with not as many discouraged workers.

Q. Why is New York's unemployment rate so much lower?



A. As of March 2013, New York had gained 438,700 private-sector jobs, and it has recovered 135.3 percent of its Great Recession losses. It ranks fifth among all states in job recovery.

Q. Why?



New York received federal aid for key financial industries, which probably reduced losses . Then there’s New York City — the tourism destination capital of the world, both for tourists from the United States and abroad, with enormous effects on jobs in leisure, hospitality and entertainment.

Q. In the decade before Gov. Christie took office, New Jersey saw no growth in private-sector jobs. That wasn't sustainable. Is that hurting the state today?



A. Even in the good years of the last decade, New Jersey’s private sector employment grew around 2 percent, while the national rate was around 6 percent. We became less competitive. We had large increases in public-sector employment and property taxes rose faster than income and several state tax rates were raised. Even in the good years, we still had to raise taxes. That’s a bad sign.

The weakness in the economy was masked by the booming stock market and housing market. But the underlying employment growth numbers were very tepid.

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Q. Will Trenton's property or income tax cut proposals create jobs?



A. The tax cut discussion is becoming part of the political process this year. I think it’s prudent to see what happens with the April tax collections, and even then to remain cautious.

Corporate profits are strong, the stock market is booming, and housing prices are finally starting to increase.

As the political season unfolds, available tax resources will become clearer.

Q. What about corporate tax incentives? We spend millions to keep companies from moving. Is it money well spent?



A. This is a perennial and vexing question for economists. We wrestle with it with all kinds of studies.

Everybody would be better off if no state did it, but no state is going to step forward and say we’re not doing it because it puts that state at a significant competitive disadvantage. New Jersey has to have to a competitive, accountable, and effective incentive package.

Q. What are creative states doing that New Jersey should be doing, too?



You need long-term, sustained policies that improve the infrastructure of the state — that includes fiber optics, telecommunication, and transportation in all its modes, you need significant investments in the research capacities of the universities, particularly in the life sciences, engineering, and computer technology, so they can attract federal dollars and become clusters that attract private investment, and you need support for building workforce skills at all levels.

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