Private-sector employment was devastated in the last two months of 2008 as New Jersey lost more than 33,000 private-sector jobs in November and December, according to the monthly employment report released today by the NJ Department of Labor and Workforce Development (LWD).

Private-sector employment dropped by 14,600 jobs in December, and revised employment numbers from November showed a loss of 19,100 private-sector jobs, according to the report.  That brings the 2008 year-end total for private-sector job losses to 59,800, the biggest yearly loss in private-sector jobs in New Jersey since the early 1990s. 

The massive job losses in December pushed New Jersey’s unemployment rate up a whopping full percentage point, from 6.1 percent to 7.1 percent.

"Private-sector employment is being devastated by the economic crisis, and we may not have hit bottom yet," NJBIA President Philip Kirschner said.

For December, the service sector dropped 9,600 jobs, construction shed 3,000 jobs and manufacturers lost 1,900 jobs.  For the year, however, manufacturing and construction industries bore the brunt of the recession, each losing more than 5 percent of their work forces over the course of the year.

In addition to concern about the health of the economy, the 2008 unemployment figures bode ill for the health of the State’s Unemployment Insurance (UI) fund, which pays for unemployment insurance benefits for those who get laid off from work.  The balance of the fund has already dropped to the point that it is close to triggering an automatic payroll tax increase of $350 million to $700 million on New Jersey employers.

"A huge payroll tax increase is the last thing New Jersey’s employers and economy can withstand right now," Kirschner said.  "It would effectively be a tax on jobs at a time when employers are struggling to hang on to the workers they have.  Governor Jon Corzine and the Legislature must do everything in their power to avoid a payroll tax increase."