Unemployment – In National Scale from Best to Worst: New Jersey is # 38

Unemployment Rates for States.

As unemployment took a dip nationally to 8.3% last week, New Jersey remains mired at 9.0% –  that is 0.7% higher than the national average and # 38 in the list of all 50 states offered by the U.S. Department of Labor, Bureau of Labor Statistics.

All the states that surround us geographically score better than New Jersey. We are worse off than Maryland, Delaware, Pennsylvania, New York, and Connecticut.

Governor Christie has been very apt to point out to one of the main reasons why the above statistics are so dismal: The state is unfriendly to businesses – those are the employers – because taxes are too high and that is because government spends too much.

But he has been disingenuous as to why it is so: Government spends too much on itself rather than on New Jersey. Look at our roads and bridges. Look at our Public Pension System. Look at our Unemployment Insurance Fund. When he addresses the issue of cutting spending, it is always that part of spending that improves the lives of most New Jersians that he wants to cut; never the sacrosanct political apparatus of agencies and more agencies filled with political hacks that produce nothing.

The press just reported a few days ago that he had appointed some 50 loyalists to positions in the Port Authority of NY and NJ and while some democrats criticised him, they also sought to appoint their own allies to the agency. Incidentally, I do believe that New Jersey must abandon the custom of having independent agencies for tending to roads and bridges. We must transfer all the productive employees to the DOT, adopting their union contracts if they are unionized, and fire the political hacks. And we must strengthen Civil Service Laws to prevent future abuses.

We may also add a second reason for the economic malaise in New Jersey – not mentioned by the governor explicitly but implicit in his proposed 10% tax cut: The extraordinary size of  government makes life in New Jersey very expensive and therefore the aggregate demand in the New Jersey economy is below that of its neighbors. His proposed 10% cut however will not alleviate that situation. Aggregate demand does not respond well to tax cuts executed in a linear fashion.

The dilemma for the governor – or for any politician of either party for that matter – is that to truly cut spending in New Jersey they will have to dismantle the very system that keeps them is their positions of power and privilege, elected term after term, smothering all opposition in insidious ways disguised as laws.

So if unemployment falls in New Jersey too in the coming weeks, we may credit two things: the ingenuity of New Jersey in spite of all the odds or that economy improvements across the state lines are sunbathing the New Jersey economy. But the hands of the governor are tied by the  same strings that placed him in office.