The Changing Employment Landscape – New Jersey Business Magazine

General Business

The record unemployment rate caused by the pandemic began to recede in 2021, but new hurdles continued to challenge New Jersey’s economic recovery.

By Kyle Sullender, Executive Director, Focus NJ May 2, 2022

Unemployment: Although unemployment in New Jersey remained stubbornly high for much of the year compared to most other states, progress was evident in the final months of 2021.

From January to June, New Jersey’s unemployment rate fell just 0.2 percentage points (from 7.3% to 7.1%, respectively). Workers fared better in the second half of the year, however, as the state’s unemployment rate fell 2 percentage points to 5.1% in December.

Workforce: Although larger than in the months following the outbreak of COVID-19, New Jersey’s labor force (the number of people working or actively seeking work) remained significantly lower in 2021 than it was. two years ago.

In December, New Jersey’s labor force consisted of about 4.63 million residents ages 16 and older, down about 2% from the 4.73 million residents who were working or seeking labor in January 2020 before the pandemic fueled unemployment. Similarly, the share of the population engaged in the labor force (the activity rate) remained 1.6 percentage points lower in December 2021 than it was before the pandemic (62.6%).

Resignations: One of the most discussed trends in 2021 has been the emergence of the “great resignation”. According to the Bureau of Labor Statistics (BLS), the number of Americans quitting their jobs hit an all-time high in November 2021.

New Jersey, like most northeastern states, also saw an increase in quits, but less pronounced than the rest of the country, according to BLS state-level surveys. New Jersey’s average dropout rate throughout 2021 was approximately 2.4%, compared to the national average of 2.7%.

With around 291,000 job openings in December, it’s no surprise New Jersey workers feel confident about changing jobs, and the need to compete for talent may have pushed up wages and contributed to sideline the workers. Yet, whether due to retirement, new caregiving responsibilities, or COVID-19 fears, as the Federal Reserve recently suggested, bringing additional workers back into the workforce will be critical to meet demand in several key industries. 

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