TRENTON – Economists said New Jersey’s slow but steady post-recession recovery will continue to hit hardest the middle class, and especially those whose job skills are obsolete in a global, computer-based economy.
In addition, the experts said that super storm Sandy, which devastated much of New Jersey’s shore, will hurt New Jersey in the short-term, particularly in terms of property and sales tax revenues, but also will create opportunities as the state rebuilds.
These outlooks were offered Tuesday during the second annual Garden State Economic Forum held at the N.J. State Museum.
Economists Joseph Seneca of Rutgers University and John Silvia of Wells Fargo offered a wide-ranging overview of the state’s economy since the downturn hit in 2008.
The state was on pace to add 37,000 private-sector jobs through September, but Sandy will temper that estimate, Seneca told an audience of state officials and businesspeople.
The state has regained 84,900 private-sector jobs since February 2010, Seneca said. In order for the state to reach its January 2008 peak of 3.44 million jobs, it needs to add 163,000 private-sector jobs.
That would take over three years if the state added about 50,000 a year, and about 6 and a half years if it added 25,000 a year. That goal is reachable, the economists indicated.
But how Sandy will affect those outlooks is uncertain.
In addition to losses in capital stock and overall business activity, there will be reduced property assessments in New Jersey.
“Expect property tax collection rates to fall with implications for local budgets,” Seneca said.
Also, the hit that the Shore businesses took will extend beyond next year and possibly last into 2014 before a recovery is seen, they said.
However, there will be opportunity in the aftermath of Sandy in terms of repairs, and especially in the burgeoning new so-called “prepper’’ economy, in which people accept that major weather events are routine, not unusual, and consequently choose to be in a constant state of preparedness by always stocking up on batteries, generators, and other essential disaster-recovery supplies.
But don’t expect those generators to be made in New Jersey, the experts said.
New Jersey has a “structural unemployment” problem with its work force that existed even before Sandy struck.
There is a disconnect between what skills jobless people have and what skills are needed.
“We don’t have enough computer literacy,” Silvia said. “If you are graduating high school and don’t have Microsoft Office (skills) I can’t put you in Wendy’s to run a cash register.”
The middle class will continue to feel the brunt of the downturn, he indicated.
“Real disposable income is down,’’ Silvia said. “Look at JC Penney, one of the classic middle-income stores, and look at the struggles they have had.
“People who don’t have the skills to compete in the 21st century … they’re frustrated, they’re angry.”
In an age when 10,000 baby boomers retire every day and want Social Security, Medicare and Medicaid protected, “You can’t have 47 percent of society not paying taxes, you gotta pay something,’’ Silvia said, adding that the middle-income group has shown the least amount of progress since 1984. “No wonder they’re angry,” he said.
Some of the other speakers scheduled at the summit included Tracye McDaniel, president of the non-profit Choose New Jersey; Andrew Haughwout, vice president at the Federal Reserve Bank of New York; and Richard Bagger, senior vice president of Celgene and former chief of staff to Governor Chris Christie.