Rutgers prof: NJ’s economic hit just beginning, but long run fine
Around one of every seven New Jersey residents covered by unemployment insurance has filed new jobless claims over the past three weeks, a pandemic-induced avalanche that doesn’t appear to be letting up this week.
Jobless claims over the last three weeks in New Jersey have totaled 576,904, according to state Department of Labor and Workforce Development data. Only six states have recorded larger amounts: California, Pennsylvania, Michigan, New York, Texas and Ohio.
Dinesh Iyer, a professor at Rutgers University’s School of Business in Camden, said that while the job-loss bottom can’t be predicted and the economic toll will be lasting, it but will recover – eventually.
“This is I think just the beginning. You’re going to see the fallout from this go on for a little while,” Iyer said. “Even after the last recession, Jersey was one of the states that recovered on a much slower pace as compared to the rest of the country. So our recovery time is also probably going to be longer.”
Iyer said the stimulus efforts from Congress and the Federal Reserve is going to help and needs to be directed towards smaller businesses. He noted all states are enduring similar upheaval, with more than 15 million Americans filing for unemployment in three weeks.
“This is inevitable. Everybody’s going through this,” Iyer said. “It’s not a lack of stability in general. This was caused by an external influence. The long run is fine. I think we’ll all be fine.”
The claims amount to nearly 14.4% of covered employment in New Jersey. Only nine states and territories have seen a larger share file new claims for benefits: Rhode Island, Michigan, Pennsylvania, Nevada, Hawaii, Puerto Rico, New Hampshire, Kentucky, Washington and Louisiana.
Iyer said manufacturers also need significant help because it would be particularly expensive for them to lay off and rehire a technically skilled workforce. They need to keep workers on the payroll if that’s at all possible or face a particularly difficult recovery process.
“Those kinds of things are tough to do when the economy is like this,” he said.
Iyer said companies shouldn’t just try to ride out the interruption in the economy. Not only is there not a clear end date, it’s also impossible to know what changes will be required moving forward.
“Waiting is never a good strategy. I think companies need to move. Take for example, right, today I was just reading a report that Panera was trying to sell groceries,” Iyer said. “Other companies will have to move. Suppliers to restaurant industries have started supplying to individuals now. So companies have to get innovative.”
“The country is entrepreneurial, right? You are going to find people finding ways and means to get around these situations,” he said. “And we’ll survive. It’s just that we’ve got to find a socially distant way to survive.”