Commissioner Kroll said work-force training is critical to New Jersey's future economic growth, and he outlined his plan to spend State training dollars more effectively. The Department of Labor (DOL) will undergo a major reorganization this year to consolidate training programs that are currently scattered across 24 separate government offices.

The Commissioner observed that up-to-date skills training is the key to economic success, not only for companies but for individual workers as well. While New Jersey spends $12 billion each year on K-12 education and $2 billion on higher education, only $400 million is available to train adult workers. Because no more than 25 percent of the State's workforce has a four-year college degree, many of New Jersey's 4 million workers rely on training programs to sharpen their skills. Kroll believes the reorganized Department of Labor & Workforce Development will be able to use its $400 million in training funds more effectively.

DOL is also helping employers in other ways:

Expanded Literacy Training-More than 12,000 workers have received $4.4 million worth of training to improve their basic literacy skills on the job. This instruction can lead to improved productivity and safety in the workplace. The Department has also increased the number of literacy training centers statewide from seven to 38.

Improved Employer Access to Training Grants- More than $34 million in customized training grants have been distributed to employers in recent years. This money can be used to train workers on computers and new equipment, build literacy skills, or even teach employees how to comply with ISO quality standards. The customized training program is also an effective economic development tool, helping to attract and retain jobs in New Jersey.

Continuing Education for Apprentices-Industries that have employees engaged in professional apprenticeship programs may find it easier to promote advanced education under a plan by the NJ Institute of Technology, Rutgers University and the county colleges to grant course credit for apprenticeship training.

Filling Jobs in the Future-The Department of Labor and the State Employment & Training Commission are working with Rutgers University on a project to identify the skills workers will need to qualify for new jobs in New Jersey's fastest-growing industry sectors. The idea is to work closely with employers to understand where job openings are most likely to occur and make sure that workers, schools and trainers know in advance which skills will be needed to fill those positions.

Commissioner Kroll concluded his remarks by urging employers to participate in workforce development efforts in their regions. Business participation in county Workforce Investment Boards is an important way for employers to keep schools and government officials aware of rapid changes in on-the-job skills.

Meeting attendees also received information on a wide range of DOL employer services:

Safety Consultations-This free service is very popular with NJBIA member companies. The program helps employers to identify workplace hazards and train employees to avoid costly injuries before an OSHA violation occurs.

Unemployment and Disability Insurance-DOL's Employer Handbook is a useful guide to processing claims by ill or unemployed workers.

Wage & Hour Publications- Information is available on everything from overtime rules and record-keeping to working papers for teenagers and prevailing wage rates. For more details, visit the Department's Web sites at www.wnjpin.net and www.nj.gov/labor.

The New Jersey Council of County Colleges was also on hand to announce a new consortium to help employers train their employees. Interested companies can learn more at www.njtraining.org or 800-821-NOTE.

Paid Family Leave is the Top Workplace Issue in 2004
Labor and employment issues have been a source of controversy in recent sessions of the State Legislature. The 2004-2005 session that began in January will be no different.

At the top of the list is the Governor's paid family leave proposal requiring employers to offer working parents 16 hours of additional paid time off each year. A bill may be introduced in late February. While details of the bill are not known for certain, expect the final legislation to be an unprecedented employer mandate.

Governor James E. McGreevey dubbed the proposal Kids' Time, but it is apparently not just for kids anymore. Some legislators want to entitle any employee who has worked for an employer at least 12 months to 16 hours of paid leave to assist any member of the immediate family, not just children in school. Family emergencies and parent-teacher conferences would be covered.

It is unclear if businesses with fewer than 50 employees will be exempt, as they are under the unpaid leave mandates. It is also not clear if companies of any size will get credit for paid time off they already offer.

If enacted, New Jersey's paid leave mandate would be the only one of its kind in the United States. Even the few states that require employers to offer time off for school conferences do so through unpaid leave time. The bill would also make unprecedented changes to New Jersey's wage and hour laws. Currently, the amount of paid time off an employee receives for vacations, sick leave and personal time is at the exclusive discretion of the employer. This proposal threatens to impose a one-size-fits-all policy on workplaces as diverse as hospitals, factories, social services, utilities, and retailers. This micromanagement of employer policies is offensive and will further damage the business climate.

Beyond the Governor's proposal, other paid leave bills have been reintroduced. A-1892 (Oliver) would enact a new Temporary Disability Insurance payroll tax to fund paid leaves of up to eight weeks each year. A-173 (Oliver) draws on both Unemployment Insurance contributions and a Temporary Disability Insurance payroll tax to underwrite annual leaves of up to 12 weeks. Since employers with two or more employees contribute to the Unemployment Insurance and Temporary Disability Insurance programs, even the smallest New Jersey companies would be affected.

But there's more. A-1495 (Conaway) would grant employees at companies with more than 50 workers 24 hours of paid leave per year for school conferences (on top of existing paid time off). It would be available to parents who believe their children under 18 suffer from "social problems" or "behavioral problems." Since that vague standard could be applied to every teenager in New Jersey, every working parent would eventually qualify! Meanwhile, A-1904 (Oliver) would require employers with 50 or more employees to offer still another 48 hours of job-protected time off so that employees can attend school plays, soccer games and other non-emergency events.

NEW JERSEY EMPLOYMENT WATCH Employment Growth Lags As Economy's Pace Quickens
As New Jersey and the nation head into the most promising year of economic growth since 2000, one cylinder in an otherwise purring engine is still misfiring-job creation.

Even as factory production is picking up and businesses are making long delayed investments in new plants and equipment, employment growth is sputtering. Employers in New Jersey and the nation have shown a reluctance to hire more workers until they can see a sustained pickup in new business. They have been able, at least in the early stages of this expansion, to meet customers' demands by making their shops more productive.

However, a majority of economists, both in the region and the nation, say job growth will assuredly pick up in the first half of 2004 as businesses continue to crank up production in response to rising demand.

With the addition of 29,400 private sector jobs in 2003, New Jersey is certainly ahead of most states. However, a closer look at the employment data shows that the State's employment growth petered out in the second half of the year.

New Jersey's private-sector employers tacked on a miniscule 3,400 jobs between July and December after adding 26,000 jobs in the first half of the year. Employment growth slowed in most sectors. Ironically, the manufacturing sector saw the most improvement in the second half as its job losses slowed to a trickle following three years of dramatic losses.

Although the State's job growth has sputtered, its unemployment rate has fallen steadily. It reached a post-recession low of 5.3 percent in December, down from a six-year high of 6.2 percent in July. The current jobless rate remains well above the February 2001 low of 3.4 percent reached at the end of the last economic expansion.

Taking a look at the details of employment growth in New Jersey, the net addition of 29,400 private sector jobs last year represented a gain of nearly 1 percent. This was a welcome change from a net loss of 14,000 jobs in 2002 and 53,300 in 2001.

Although the gain brought total private-sector employment to 3,395,800 jobs as of December 2003, it still left the State 15,400 jobs shy of the all-time employment record of more than 3.4 million set in June 2001, the month before the recession began.

Regional economists say they are confident that in 2004 New Jersey will easily recoup all of the remaining jobs lost in the recession and then add some. Rutgers University economist Jim Hughes said recently he expects the state to add as many as 70,000 jobs this year.

Most of last year's employment gains came in the State's private-sector service industries, which added 32,300 jobs for a gain of just over 1 percent. Construction employment edged up by 4,100 jobs, for a gain of 2.6 percent.

Manufacturing employment fell by 7,000 jobs, a decline of 2 percent, which was actually a welcome improvement over the loss of 60,400 factory jobs in the previous two years combined. The total recession loss of 67,400 production jobs, a 15 percent retreat, continues a pattern of accelerated losses during recessions. The State's manufacturing employment has remained stable or declined only modestly during periods of rapid economic growth. Since 1979, New Jersey has lost nearly 450,000 factory jobs or about half of its manufacturing employment base.

As shown in the Selected Winners and Losers table below, the bulk of job growth in the State's private service-producing industries has come in education and health services, leisure and hospitality, and financial services, all of which have seen employment rise above pre-recession levels.

Employment in the information services industry, which includes the hard-hit telecom sector, is still 19,200 jobs below its pre-recession peak. Trade, transportation and business and professional services also have yet to recoup all of their recession losses.

The US Economy

Ultimately, the fate of the State economy is tied to the fate of the national economy. Fortunately, the outlook for the national economy is the best it has been in more than three years.

The recent surge in business spending and factory production, coupled with continued strength in consumer spending and housing sales, indicates that a vigorous and sustainable economic expansion is underway, economists say.

A nagging worry, however, is weak to nonexistent employment growth. The nation's private-sector employers collectively added a miniscule 14,000 jobs in 2003. A surge in new jobs in September turned out to be a false start, as only 1,000 jobs were created in December. But many economists are betting the economy will hit its stride this spring and will soon be adding 150,000 jobs a month.

Labor market experts note that the disappointing employment numbers are at odds with other data pointing to a more rapidly expanding labor market. This data includes a decline in the number of people receiving state jobless benefits and a healthy increase in help wanted ads since May. The national unemployment rate also has fallen from a high of 6.4 percent last June to 5.7 percent in December.

One problem with the government's monthly employment survey, especially in the early stages of a recovery, is that it fails to count the jobs created by startups. These startups could be adding tens of thousands of new jobs every month, jobs that ultimately will be counted when the government revises its employment numbers later this year, labor market experts say.

Putting aside the employment puzzle for a moment, virtually all other data points to an economy that is hitting solidly on all cylinders.

After two years of hunkering down to conserve cash, business executives are spending money to build their inventories and upgrade their plants and equipment.

This has been the driving force behind a recent surge in economic output. The economy grew at an 8.2 percent annualized rate in the third quarter of last year and a 4 percent rate in the fourth quarter.

Inventory building has boosted manufacturing activity and output, giving new life to a sector that had been in the doldrums for three years. In December, manufacturing activity grew at its fastest pace in 20 years. For the entire fourth quarter, factory production grew at a 6.6 percent annualized rate, the fastest growth in three and a half years. Spending on high-tech equipment alone rose by 34 percent in the fourth quarter.

Regional surveys by the Federal Reserve Banks of New York and Philadelphia provide ample evidence that New Jersey manufacturers are participating in this upswing. Manufacturing activity in the New York region, which includes North Jersey, rose to a record high in January of this year, following nine months of improvement. Manufacturing activity in the Philadelphia region, which includes South Jersey, hit a ten-year high in January after eight months in positive territory.

The brightening manufacturing picture cannot be taken for granted, however. Cautions Commerce Bank Chief Economist Joel Naroff: "Never underestimate the uncertainties in an economy."

A cheaper dollar and rising global demand have also helped to push the economy into high gear recently. These two factors together have led to a 40 percent increase in exports since last August.

Through all of this, the housing market has remained remarkably strong and resilient. Combined sales of new (1.085 million) and existing homes (6.1 million) rose to a record 7.19 million in 2003.

Underlying the economy's ability to grow are continued low interest rates, which make it cheaper for people to buy houses and businesses to make capital improvements. On January 27, the Federal Reserve kept its short-term interest rate target at a 45-year low of 1%.