The economy of a country or a state determines the level of living standards of its residents. If the economy is growing, then the living standards of the residents automatically improve. Economic growth translates to increased GDP hence, enough capital to support the development projects of a state or a country. Economic development is facilitated by increased output and availability of ready market to consume the products produced. Low business development in New Jersey has led to low job opportunities since only a few new firms are being developed yet the population of skilled labor is increasing (McKinsey Global Institute 2014). For the economy of a country/state to grow, there must be the availability of enough labor force, enough capital, and availability of raw materials. New Jersey is endowed with all these elements, but it still lags behind in terms of economic development. Availability of many skilled people and fewer job opportunities is one factor that has limited economic growth in New Jersey. Availability of income, wages and wealth are the major contributors of quality life (Sloane 2015). Therefore, when the rate of unemployment is high, the level of poverty is likely to be high. The purpose of this study is to discuss economic growth, poverty, unemployment, and jobs in New Jersey.
New Jersey has a dense population of educated people hence, a good place to conduct business. The state is endowed with many natural resources, and its strategic position acts as an attraction for investors. Despite many factors favoring New Jersey as a business hub, few firms have developed new businesses in the last ten years. This is because of the business barriers inform of complex regulations hindering the growth of new businesses. For economic development to be achieved, a state must provide enough employment opportunities for its residents. A state should also create a conducive environment so that entrepreneurs can be encouraged to start new businesses. New Jersey has lagged behind in terms of providing a conducive business environment that supports development of start-up businesses. The high rate of unemployment and insufficient job opportunities has promoted high poverty levels in New Jersey.
Economic growth of a country is very important for the wellbeing of its citizens. A stable and growing economy promotes increased employment opportunities hence, increased reduced poverty levels in a state. Economic growth is characterized by increased job opportunities, increased GDP, increased market for locally produced goods and increase in the levels of investments in a country. Availability of many industries and businesses help to boost economic growth. The effects of the economic recession are still evident in New Jersey almost eight years after the recession. The struggling economy of New Jersey is evidenced by the following economic factors low GDP, stagnant household median income and low employment growth rate. From 2005 to 2016, the States GDP grew by 0.3% while the national GDP advanced by 1.4 %, the total employment in New Jersey has remained stagnant from 2005 to 2016, and median household income in New Jersey has remained stagnant while other states are enjoying great growth (Duvall et al. 2017). All these factors indicate that the economic situation of New Jersey has not recovered from the effects of the recession. New Jersey is the eighth lowest growing state in terms employment opportunities (Whiten 2016). This is an indication that the Economy of New Jersey is growing slowly as compared to the other states. Though the recession affected all the States in the US, most States have recovered from the economic effects of the recession.
Several factors have limited economic growth of New Jersey. These factors include a low rate of start-up businesses to increase the level of employment. In the US, young and fast growing Companies are the major contributors of employment opportunities for the US citizens. In New Jersey, only 5% of firms with about five hundred employees are less than ten years old (US Census Bureau 2016). This is an indication that the business environment does not favor growth and development of new businesses. Lack of conducive environment for investment has made New Jersey lag behind in terms of economic development. Startup firms offer great employment opportunities; the low growth rate of new business has affected the employment opportunities available for the residents of New Jersey. Increased employment opportunities translate to increased levels of living standards hence reduced poverty levels.
New Jersey is located in a strategic position that is good for business. Geographic location can act as a great economic booster due to proximity to ready markets for locally produced goods and favorable conditions to conduct business hence, increased investments. New Jersey hosts the 3rd largest port in terms of volume in the US. This port allows easier transport of goods in and out of the country. This is a good opportunity that can be utilized to boost the economic growth of New Jersey. New Jersey is located in the northeast center corridor. The northeast corridor offers ready and reliable market since it is densely populated. The corridor offers New Jersey robust innovations and reliable supply chains. Availability of market is one factor that can help a state to increase its GDP through business transactions. Despite the strategic position of New Jersey in terms of business, it has continued to lag behind in economic growth. The low business investment rate has been contributed by the high cost of doing business. New Jersey is ranked 42nd out of 50 states in terms of business friendliness (Duvall et al. 2017). This is because of the complex business regulations that make it difficult for investors to start businesses in New Jersey.
Another factor that has affected economic growth in New Jersey is the aging transportation infrastructure system. The transport infrastructure systems limit economic growth of New Jersey due to the high rate of traffic congestion. The traffic congestion and poor transport infrastructures cost New Jersey motorists about $5 .2 billion a year (American Society of Civil Engineers 2016). Lack of effective and efficient transportation infrastructures discourage investors from developing new businesses in New Jersey. Good transportation systems facilitate improved supply chains hence, improved business transactions. Since the transport infrastructure system has not been advanced to cope with the increased technological advances, the attractiveness of New Jersey to new investors has remained low. The aging transport systems increase the cost of doing business by dragging productivity and delivery of products. A growing economy is characterized by a robust growth of new businesses and increased innovations in the transport sector.
New Jersey experiences low economic growth rate due to low employment opportunities for the residents. New Jersey prides on high levels of educated workforce. About 37% of New Jersey populations have a college degree compared to the 30% of the US population with college degrees (Duvall et al. 2017). New Jersey is ranked among the States with a high population of skilled labor, in fact only four other States that are above New Jersey in terms of skilled labor (American Community survey 2016). This high level of skilled labor requires many employment opportunities in order to create chances for the residents to be employed. Due to the low level of business development, this increasing skilled labor workforce is rendered unemployed. Lack of employment opportunities has facilitated increased poverty levels since the residents have no source of income.
The low economic growth rate has continued to increase poverty rates in New Jersey. Since the end of the great recession in 2008, New Jersey has continued to experience high levels of poverty (US Census Bureau 2016). The low employment rate has continued to increase poverty levels in New Jersey. Despite the high level of skilled labor in New Jersey, few firms exist to provide adequate employment opportunities. Poverty levels have been accelerated by inequality in wealth distribution. New Jersey is one of the States that have the highest gap between the richest and the poorest residents. This imbalance has facilitated increased poverty levels since the rich continue to be rich while the poor continue to suffer from poverty. The economy of a state is controlled by the rich who own factors of production. This is high gap between the rich and the poor means that the economy of New Jersey is controlled by the rich people. Wealth imbalance deprives some residents a chance to grow economically.
The high rate of unemployment has facilitated increased poverty levels in New Jersey. As of May 2017, New Jersey had an unemployment rate of 4.1% (New Jersey Department of Labor and Workforce Development 2017). Though this rate is slightly lower than the national threshold rate of unemployment, it is still a high rate compared to the dense population of New Jersey and the fact that most residents are highly skilled. Unemployment levels increase poverty since people cannot access income to support themselves financially. About 37% of household in New Jersey earn incomes that are too low to support their families. The rate of employment is increasing at a very low rate in New Jersey as compared to other states in the US (Justin Fox 2016). The low rate of employment has facilitated high levels of unemployment since many residents are educated, and the job opportunities are limited.
Economic development of a state/country is very essential in ensuring the well-being of its residents. If the economic situation is growing significantly, then the living standards of the resident population increase. New Jersey has suffered a low economic growth since the recession period. However, many states in the US that were equally affected by the recession have bridged the economic gap and are now enjoying a robust economic growth. Therefore, strategies should be put in place to ensure that the economic growth of New Jersey is achieved. Due to the struggling economy, New Jersey has not been able to create enough job opportunities for its residents. The complex business regulations have promoted high rates of unemployment. This is because entrepreneurs shy away from developing new business in New Jersey that will boost job opportunities. Start-up business offers many job opportunities hence, boosting the economic growth of a country/state. Low business development has accelerated the unemployment rates. Lack of proper transport system is another factor that has limited economic growth of New Jersey. Poor transport infrastructures that promote high traffic congestion discourage development of new businesses. Congestion leads to poor supply chains hence delays in delivery of products and raw materials. This makes the cost of production high hence, discouraging business investments. Low levels of economic development have led to low levels of employment hence increased levels of poverty in New Jersey.
- American Community Survey: “Educational Attainment,” 2015
- American Society of Civil Engineers: “Report Card for New Jersey’s Infrastructure,” (2016)
- Duvall, T. Kerlin, M. Ramos, P. Surak, Z. and Kuiken, S. “Reseeding the Garden State’s economic growth: A vision for New Jersey,” (2017)
- Jon Whiten: “October Jobs Numbers: The Slog Continues,” New Jersey Policy Perspective, November 21, 2016
- Justin Fox: “Connecticut and New Jersey: Rich States, Poor Economies,” Bloomberg View, January 14, 2016.
- McKinsey Global Institute: “A blueprint for addressing the global affordable housing challenge,” October 2014.
- New Jersey Department of Labor and Workforce Development: Table I: Major Indicators of Labor Market Activity for New Jersey, May 2017. June 15, 2017.
- Sloane, K. “Economic indicators and quality of life in Southern New Jersey.” Galloway, NJ: Stockton University. (2015)
- U.S. Census Bureau. “American Community Survey data” (2016)