NJ unemployment falls to 7.6% as more people quit looking for work

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The New Jersey unemployment rate fell between November and December amid the COVID-19 recession, as more people have simply opted to stop looking for work.

In November 2020, the state’s unemployment rate was 10.2%, but it fell to 7.6% the next month, mainly “due to New Jersey residents leaving the labor force rather than finding employment,” according to a Jan. 21 statement from the New Jersey Department of Labor and Workforce Development.

That means those people are no longer calculated into the state unemployment rate, which has long been the source of criticism for how government officials come up with the monthly number.

All told, nearly 2 million New Jerseyans have filed for unemployment since March because of the pandemic and received more than $21 billion in federal and state jobless relief.

In order to contain the spread of the virus, Gov. Phil Murphy ordered mass closures of businesses where people congregate: theaters, restaurants and bars, gyms, salons, malls and casinos.

Those businesses were allowed to reopen over the summer, but with intense capacity restrictions. Murphy warned that amid a second wave, he has no intention of loosening those restrictions in the near future.

While those closures helped to curb the spread of the virus, they triggered an all-time record-high unemployment rate of 16.8% in June. Widespread vaccinations against COVID-19 – 4.7 million New Jerseyans by summer 2021 – is key to building herd immunity and lifting those restrictions.

“When workers become discouraged and stop looking for employment, they leave the labor force,” reads a post from the Washington D.C. think tank the Economic Policy Institute. “It is common in economic downturns for the labor force to decrease (or increase more slowly than usual) in size as many give up on finding work and are therefore no longer counted as officially unemployed.”

Nicole Rodriguez, research director with the progressive think tank New Jersey Policy Perspective, called the trend a “really bad sign.”

Yana Rodgers, an economist and faculty director at the Rutgers Center for Women and Work, agreed that such a factor is certainly at play.

“But the bigger story is people – and especially women – needing to stay home to take care of younger children, do homeschooling, and provide care for elderly and disabled family members,” she added in an email.

She pointed to the hardest hit sector between December 2019 and December last year – leisure and hospitality – which saw a decrease of 8,900 job positions year over year according to state labor data.

“Women are disproportionately represented among workers in these industries with the most unemployment,” reads a December report from the Center.

They made up the majority of workers in two of three industries with the highest unemployment between January and August 2020: food service, and health care and social assistance, according to the report. Retail trade was also hit the worst during those eight months, the report found.

This week, the labor department sent out two rounds of federal unemployment relief at once, $600 total to 550,000 New Jerseyans, after a week of delays due to technical problems. And under the federal COVID-19 relief package signed on Dec. 27, supplemental payments of $300 will automatically be sent to anyone receiving unemployment between Jan. 2 and March 13, down from the original $600 that expired in July.

Looking ahead, President Joe Biden hopes to put through a $1.9 trillion stimulus package with $400 of weekly unemployment relief through September.