If you believe New Jersey’s economy is lagging behind the rest of the nation, you’re not imagining things.
That’s the bad news. The good news, there’s still hope.
The global research and consulting firm McKinsey & Co. recently offered four ideas that could help. First, the facts from the company. From 2005–2015, the nation’s annual gross domestic product growth rate was 1.4 percent, compared to New Jersey’s .3 percent. As for annual employment growth in the same period, the nation was at .6 percent, while the state was a minus .1 percent.
McKinsey would like to see improvements in four areas:
First: Bring in more new businesses, the leading source of new jobs nationally. The firm says only 5 percent of large businesses in the state are 10 years old or younger, compared to 11 percent nationwide.
Second: Improve traffic. According to the firm, traffic congestion costs New Jersey motorists $5.2 billion per year in wasted fuel and lost time, and businesses lose productivity.
Third: Find and keep more middle skill workers through public, private and educational partnerships.
Fourth: McKinsey says the state should focus on attracting young, high-growth companies. On average, states spend 40 cents for every dollar of corporate investment they induce through tax abatements and other incentives. Between 2010 and 2016, New Jersey offered $1.80 in incentives for every dollar of capital spending by the companies it targeted.
The best news: The firm estimates, with some changes, the state might match the U.S. GDP growth rate, and the state’s GDP could be more than $150 billion higher a decade from now, while also creating 250,000 additional jobs. This is a huge election year that, in theory, can reshape state government. Voters should make economic reform a priority, ask the candidates tough questions and hold the winners accountable. There’s no reason New Jersey’s economy should continue to lag behind the nation’s.