Green shoots

Daniel J. Munoz//April 26, 2021

Green shoots

How New Jersey’s post-COVID rebound is developing

Daniel J. Munoz//April 26, 2021

As the state begins to recover from the COVID-19 economic downturn, the industries hit hardest by the pandemic a year ago seem to be rebounding most quickly. Sectors such leisure and hospitality, and construction have boomed in recent months, posting some of the largest job gains this spring.

“Leisure and hospitality, which of course has been terribly depressed in New Jersey, we saw a pretty healthy increase in March,” said Charles Steindel, the state’s chief economist under former Gov. Chris Christie. Leisure and hospitality includes businesses such as hotels, restaurants, food service, catering and events.

Steindel added that the strongest job growth over the summer and into the fall is likely to occur along the shore. And construction also should recover as buyers with ample spending power set their sights on spacious and socially distanced New Jersey suburbs.

James Hughes, professor and former dean at Rutgers University’s Edward J. Bloustein School of Planning and Public Policy.

“This is really the start of a very strong bounce-back,” said James Hughes, a planning and public policy professor at Rutgers University, and former dean of the Edward J. Bloustein School of Planning and Public Policy. “It’s based on vaccination levels that have taken place, a lot of consumer savings that took place over the past year, increasing demand for people wanting to get out of the house, go to restaurants, travel, go on vacation. All of those factors together are pushing toward … really good numbers.”

Pent up demand also will likely bring in tourists, an influx that will also increase demand for workers. And concerns over whether shore businesses can secure enough J-1 visas – a typical source of labor during the summer months – means businesses may turn to the ordinarily difficult to reach local population.

“All of our schools are in session, so we don’t have a workforce for the pre-seasons or the postseason, pre-Memorial Day or post-Labor Day,” said Michele Siekerka, president and chief executive officer of the New Jersey Business & Industry Association. “We cannot recruit people to work just given school schedules. It’s not like it was two decades ago, where you were working on the boardwalk.”

An April 2020 news release from the New Jersey Department of Labor and Workforce Development showed that in March, when the COVID-19 business restricutions went into effect, the state lost 14,800 jobs in the leisure and hospitality sector, 3,600 jobs in professional and business services, 2,500 jobs in education and health services and 1,000 jobs in financial activities.

Welcome sign of a bar or pub, with reminder to wear mask and observe social distancing. Concept of new normal operations in a bar or restaurant.

All nine major employment sectors saw worsening numbers in April last year, the Labor Department said in May 2020. Leisure and hospitality lost 236,500 jobs; trade, transportation and utilities lost 157,500 jobs; education and health services lost 113,100 jobs; and professional and business services lost 90,100 jobs.

“Other services,” which the federal Bureau of Labor Statistics defines as “equipment and machinery repairing, promoting or administering religious activities, grant-making, advocacy, and providing dry-cleaning and laundry services, personal care services, death care services, pet care services, photofinishing services, temporary parking services, and dating services,” lost 57,200 jobs in New Jersey that month. Construction shed 43,800 jobs; manufacturing lost 33,900 jobs; financial activities lost 12,800 jobs; information services lost 5,100 jobs, and public sector employment levels in the state shrank by 7,600 positions.

All have slowly rebounded. Whereas the state shed 22,300 jobs in the private sector in March 2020 and saw nearly 2.2 million people file for unemployment over the following year, this past March the state added 20,800 jobs in the private sector. The state shed 750,100 jobs in April 2020; jobs data for April 2021 will not be available until mid-May.

The job gains since the start of the year reflect a general increase in the number of openings in the private sector. The state added 900 private sector jobs in January, 10,700 jobs in February and 20,800 jobs in March.

“You like to see 10,000 more every month,” Steindel said. But, he continued, “20,000 in a month by itself means we don’t get back into the previous levels until the middle or latter part of next year. We want to see the numbers in the 50,000 range continuing for a while.”

Greg Lalevee, business manager and general vice president, International Union of Operating Engineers Local 825.

On construction, Steindel said the influx of buyers into the New Jersey residential real estate market increases demand for new projects, along with renovations and upgrades for existing housing stock. And the ambitious offshore wind sector being pushed by Gov. Phil Murphy – as well as potential progress on the Gateway transportation project – could also create construction jobs.

“Infrastructure has always been something where we’ve had tremendous [return on investment], every dollar spent turns to much more than a dollar in the broader economy,” Greg Lalevee, business manager of the International Union of Operating Engineers Local 825, said in an interview. “Anything that the government can put into infrastructure spending is momentum for the entire economy.”

Makada Henry-Nickie, governance fellow, Brookings Institution.

Makada Henry-Nickie, a governance fellow at the center-left Brookings Institution, agreed that infrastructure spending could make a difference. “This is firmly about investing our money in revitalizing our communities that we have talked ad nauseam about … racial equity and inclusion,” she said. “When the rubber hits the road, this is a down payment. This is the kind of scale of the investment it takes.”

Leisure and hospitality added 6,400 new jobs in February, and 5,700 jobs in March. Education and health services added 4,200 jobs; construction added 3,800 jobs; trade, transportation and utilities added 3,300 jobs; manufacturing added 2,100 jobs; information services added 800 new jobs; financial activities added 400 new jobs; and professional and business services added 200 new jobs.

The sector of “other services” shaved off 500 job positions in March, according to labor data.

“While the economy has shown some signs of recovery, we are still far from where we need to be,” said Vineeta Kapahi, an analyst at the left-leaning think tank New Jersey Policy Perspective, in an email.

“In addition, employment patterns are uneven across industries and communities. A strong and inclusive economic recovery will require continued investments in New Jersey’s communities, stronger protections for workers, and increased support for families.”