New Jersey’s gains in the private sector stalled in April amid a dismal nationwide jobs report and national labor shortage, wiping out several months of progress coming out of the pandemic, according to data released May 20 from the state Labor Department.
The state added just 3,500 private sector jobs in April, compared to the 20,800 jobs added in March, according to the New Jersey Department of Labor & Workforce Development. For April, the state unemployment rate was 7.5%, compared to 7.6% in March, 7.8% in February and January, and 7.7% in December.
Economists and public officials expected the nation to add more than 1 million new jobs in the private sector: instead they added just 266,000 people to the labor force. Businesses across the nation – and in New Jersey – have struggled to hire workers as they ramp up their reopenings.
Business advocates and conservative lawmakers pin the blame on the $300 per week federal unemployment bonuses for enticing people to stay home rather than get back to work.
“Most employers report that their staff will not return to work while they have the option to remain on unemployment,” said Dana Lancellotti, president and chief executive officer of the New Jersey Restaurant and Hospitality Association. “The incentive to return to a job when many are making the same or even more to remain home just doesn’t make sense.”
But labor advocates and unions contend that paltry wages and unsafe working conditions have made many Americans averse to returning to those same workplaces.
Kevin Brown, New Jersey state director for 32BJ SEIU, which represents thousands of service workers in the state, contended that a lack of worker safety during the pandemic is to blame for keeping people home.
“Employers cut corners where they can, and while they may provide some PPE [personal protective equipment], it may not be enough or with adequate frequency,” he said in an email. “There is a labor shortage because some employers are not even paying standard wage, taking away benefits. People can’t work in those conditions.
Low-wage jobs like in retail, leisure and hospitality have been especially hit by this phenomenon. But nonetheless, federal and state labor data showed that leisure and hospitality made up 3,000 of those new jobs in April.
“Many contend that the extra $300 in unemployment benefits have been an important factor keeping workers from accepting one of the many job openings,” said Charles Steindel, a former state economist, in a May 20 statement from the conservative think tank Garden State Initiative.
Undoubtedly this has been an element at work, but it’s also the case that leisure and hospitality, the one sector that has shown recent strength, mainly offers fairly low-paying positions.”
State leaders are eyeing how to alleviate the labor shortage, but Gov. Phil Murphy has indicated he has no appetite to end the federal $300 weekly relief.
“Is there some amount of this related to folks still getting their benefits? That is quite possible. I continue to believe the overwhelming amount of folks who are getting benefits are desperately in need of those benefits,” Murphy said at a May 10 press conference.
The benefits expire in September unless Congress and the White House opt to renew them. But Michele Siekerka, who heads the New Jersey Business & Industry Association, said that businesses run the risk of missing out on the mass influx of summer tourism dollars if they cannot get enough workers.
Lawmakers are proposing a series of tax credits to help businesses absorb some of the costs with hiring, including wage increases that might need to be offered in order to hire back the workforce.