Thus is not only the old industries that have fled. We are losing the high-tech sector too. It was once considered the core of our post-industrial economy; not any longer: 50% of the projected job creation in the U.S will be health related by 2018. That is an scary prospect.
Asian governments, notably but not only China, are providing all kinds of incentives for American capital to migrate. Add to that lower labor costs and a well educated work force. The Obama administration, to its credit, is trying too but it is falling short in almost every element. Above all, the administration is not even attempting to correct the tax laws to make capital flight less profitable.
Federal taxation policy encourages capital migration and that is not going to change any time soon because those benefiting from the current capital flight also control the government. Our corporate and even popular culture tends to be permissive in that regard as well. Steve Jobs was and still is considered a hero by many but he moved every single manufacturing facility of Apple Inc. to Asia, leaving a trail of unemployed Americans behind him. He is just one case.
Recognizing that New Jersey has limited capabilities to stop that tide when the federal government is pushing on the other side in opposite direction, I am confident that we can do a great deal to improve the situation here.
1. In education: Beginning with longer school periods, days, and years, more ambitious state-wide curriculum and creating or expanding polytechnic schools for those kids that are not bound for the typical college education. In the case of those students who deliberately and consistently sabotage the classroom, expulsion from the conventional public school system must be the ultimate option – but that option must be available. The issue of having a competent, well educated work force is vital.
2. In Taxation: I have already presented this issue in my economic program: We must reward investors who put their money in New Jersey while the normal tax rate for dividends will be much higher. We are not punishing those who invest overseas; we are rewarding those that invest at home.
3. Either we make all corporate tax zero state-wide, or we have at zero in some portions of the state preferred for industrial activity and slightly above zero elsewhere. But we must understand that money is the only talk that corporations listen to and that we can not force them to relocate here. We must persuade them. When we think of a corporation we must remember that description of the Terminator in the first movie of the same title: “They feel no pain or fear or pity or remorse.”
4. We must look long-term in infrastructure and renewable energy because those two factors will be decisive well after I am gone. New Jersey must excel in both to attract capital.
There is much more to be added to this topic but I will stop here today. I am pleased the the number of new unemployment claims fell to 352,000 nationwide this week – the lowest since 2008. Let’s hope that is a trend.