People are moving out of New Jersey at a much faster rate than they are moving in and according to several sources, at a faster rate than any other state. You might think that since we are the most densely populated state in the union, that it’s not a bad thing. We all want shorter lines when we get our coffee, and we all hate traffic, but what if this trend continues?
The really bad news is that young, old and the middle are all leaving and for different reasons.
Many of the millenials that we read about are seeking urban, live-work-play environments, but Hoboken and Jersey City seem to be second choice to Brooklyn. Even those who want to stay in New Jersey and work in New York City are driven to communities with easier and more affordable commuting options. New apartment buildings are being built, primarily in Jersey City. Will they be enough to keep the younger end of our workforce in state?
The baby boomers seem to be fleeing as well. The high cost of living, especially as retirement looms, is a deterrent for staying in New Jersey. When you consider the cost and quality of living in North Carolina, Georgia, and Florida, we seem destined to continue to lose those that have lived here for decades, working, raising families and driving our economy.
The cost of labor is driving companies to relocate jobs to less expensive markets. According to the Unites States Bureau of Labor, in 2013, the annual median wage in the United States was $46,440; in New Jersey, it was $52,800 and in Florida it was $41,140. For management jobs, the national median was $110,550; in New Jersey it was $135,130 and in Florida $109,450.
While you might say that it would be great to make more money, if you are the employer, where would you want to increase your workforce? If companies are moving jobs out of state, the workforce will have no choice but to follow.
The current issue of Inc. Magazine features a table depicting the best places to launch a company. The factors it listed are the cost of office space, cost of an apartment, cost of labor, state income tax, cost of Internet service, consumer price index and quality of life. New York City was among the highest cost in all categories, and had the second lowest quality of life (Miami scored lower, but Detroit was slightly higher).
The argument has long been made that we have a talented workforce in New Jersey, which will continue to drive our economic engine. But if that workforce continues to be diluted and our talent seeks a better climate, more favorable taxes and quality of life, what will that mean for the office sector? For our local economy?
The State is doing a great job with Grow New Jersey to incentivize companies to add and keep jobs in New Jersey. Absent those aggressive incentives, I fear that we will continue to lose jobs to other states.
What can we do to stem the tide? I don’t pretend to have the answers. We can’t change the climate, but we can elect leaders who will continue to be business friendly and enact property tax reform. We can invest in our colleges and universities so that the talent stays once they graduate and enter the workforce, and even better, encourage them to start their companies here. And finally, we can continue to build the infrastructure of our cities, including our roadways and train lines, in hopes of creating the next tech hub.
There’s a lot of work to do and as I wrote in my last post, we need leaders with vision to ensure the viability of our local economy in the decades to come.