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Fact check: Phil Murphy and Kim Guadagno on New Jersey's economy

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Phil Murphy and Kim Guadagno

October 30, 2017
By Sara Reynolds

In the first debate of the New Jersey gubernatorial campaign, candidates Phil Murphy (D) and Lt. Gov. Kim Guadagno (R) addressed the state’s economy. Guadagno claimed, "There are more people working here on average than ever in the history of the state of New Jersey." Murphy claimed that "the labor market participation is at a 10-year low," and "we have fewer small businesses in New Jersey than the day that [Guadagno] and Governor Christie took over leadership in the state."[1]

Are the candidates’ competing claims about the economy accurate?

The results are mixed.

Guadagno is correct that there are more people working in the state than ever before (4.1 million). However, the aggregate number of employed residents doesn’t account for changes in population over time. By that calculation, 45.8 percent of New Jersey’s population was employed in September 2017, down from the peak of 48.5 percent in June 1989 and December 1999.[2][3][4][5][6]

Murphy is correct that New Jersey's labor force participation rate is at a 10-year low. That is, 63.3 percent of the population was either employed or actively seeking work in August 2017 compared to the 10-year peak of 67.5 percent in May and June 2009.[7][8]

Murphy is incorrect in claiming that there are fewer small businesses in the state than in 2010, when Christie and Guadagno took office. According to data from the Small Business Administration, the number of small businesses in New Jersey increased 8.3 percent between 2010 and 2015, from 795,258 to 861,373.[9][10][11] Additionally, the number of new small businesses annually increased 7 percent between 2010 and 2016, from 25,077 to 26,837.[12] Murphy did not respond to Ballotpedia's request for comment.

Background

New Jersey will hold a gubernatorial election on November 7, 2017. (A primary election was held on June 6.)

Democratic candidate Phil Murphy served as the Obama administration's ambassador to Germany from 2009 to 2013, and he was the finance chairman of the Democratic National Committee from 2006 to 2009. He held various positions at Goldman Sachs from 1982 to 2006, including head of the German Region, president of Goldman Sachs Asia, and global co-head of the Investment Management Division.[13]

Republican candidate Kim Guadagno has served a dual role as New Jersey’s lieutenant governor and secretary of state since 2010. She was the Monmouth County sheriff from 2007 to 2010, a Monmouth Beach commissioner from 2005 to 2007, and the deputy chief of the corruption unit for the U.S. Attorney's Office for the district of New Jersey from 1990 to 1998.[14]

Issues in the race include education funding, state budgeting and state government management, transportation, and the economy. According to Murphy's campaign website, Murphy proposed establishing a state bank to invest in New Jersey's small businesses, infrastructure, students, and communities.[15] He would also provide assistance and incentives to new small businesses.[16] On her campaign website, Guadagno proposed cutting regulations, lowering taxes, and expanding and diversifying the tourism industry to grow the economy.[17]

Employment

New Jersey's employed population reached 4.1 million in 2017.[3]

As noted above, the aggregate number of employed people does not account for changes in population over time.

New Jersey's annual population peaked in 2017 at 9 million, when 45.8 percent of the population was employed (as of September 2017). Between 1939 and 2017, the state's employment-population ratio peaked in June 1989 and December 1999 at 48.5 percent (when the population reached 7.7 million and 8.1 million, respectively).[18][19][6][3][2][4]

Nationwide, the population also peaked in 2017 at 326.9 million, and 44.9 percent of the population was employed. The national employment-population ratio peaked in December 1999 at 48.0 percent, when the population was 272.7 million.[20][21][22]

New Jersey's unemployment rate in September 2017 was 4.8 percent.[23] The national unemployment rate was 4.2 percent.[24]

Labor force participation rate

New Jersey's labor force participation rate hit a 10-year low in August 2017, at 63.3 percent.[7][25] That was lower than the lowest rate of the last recession, when New Jersey's labor force participation stood at 66.7 percent (December 2007).[7]

The national labor force participation rate hit its lowest point in 10 years—62.4 percent—in September 2015. That, too, was lower than the worst rate of the recession—65.6 percent in March 2009.[26]

Small businesses

The U.S. Small Business Administration defines a small business as having fewer than 500 employees.[9] When Christie and Guadagno took office in 2010, there were 795,258 small businesses.[9]

In 2015, the most recent year for which data is available, New Jersey had 861,373 small businesses, an 8.3 percent increase from 2010.[10][11] This is consistent with national trends, which saw an 8.6 percent increase in small businesses in the same period, from 27.8 million in 2010 to 30.2 million in 2015.[27][10][11]

The number of new small businesses annually in New Jersey increased 7 percent between 2010 and 2016 (the most recent data available), from 25,077 to 26,837. However, the number of new small businesses in the state peaked in 2015 at 28,977.[12] Nationally, the number of new small businesses increased 18.2 percent in the same period, from 809,000 to 956,000.[28]

Conclusion

In a New Jersey gubernatorial debate, candidate Kim Guadagno (R) claimed, "There are more people working here on average than ever in the history of the state of New Jersey." Candidate Phil Murphy (D) claimed that "the labor market participation is at a 10-year low," and "we have fewer small businesses in New Jersey than the day that you and Governor Christie took over leadership in the state."[1]

Guadagno is correct about the aggregate number of people working, but that doesn’t account for changes in population.[2] Murphy is correct that New Jersey's labor force participation rate is at a 10-year low.[7] He is incorrect that the state has fewer small businesses than in 2010, when Christie and Guadagno took office.[9][10][11][12]

See also

Sources and Notes

  1. ↑ 1.0 1.1 C-SPAN, "New Jersey Gubernatorial Debate," October 10, 2017 31:46
  2. ↑ 2.0 2.1 2.2 Federal Reserve Bank of St. Louis, "All Employees: Total Nonfarm in New Jersey," updated October 20, 2017
  3. ↑ 3.0 3.1 3.2 Federal Reserve Bank of St. Louis, "All Employees: Total Nonfarm in New Jersey (seasonally adjusted)," updated October 20, 2017
  4. ↑ 4.0 4.1 Federal Reserve Bank of St. Louis, "Resident Population in New Jersey," updated January 20, 2017
  5. ↑ United States Census Bureau, "Annual Estimates of the Resident Population for the United States, Regions, States, and Puerto Rico: April 1, 2010 to July 1, 2016 (NST-EST2016-01)," accessed October 25, 2017
  6. ↑ 6.0 6.1 World Population Review, "New Jersey Population 2017," October 20, 2017
  7. ↑ 7.0 7.1 7.2 7.3 United States Department of Labor, Bureau of Labor Statistics, "Statewide Data: Employment status of the civilian noninstitutional population, seasonally adjusted," accessed October 16, 2017
  8. ↑ The National Bureau of Economic Research dates the 2008 financial crisis from December 2007 to June 2009. To account for the effects of the recession, Ballotpedia examined data from 2007 to 2009 separately from data for 2010 to the present. The National Bureau of Economic Research, "US Business Cycle Expansions and Contractions," accessed October 16, 2017
  9. ↑ 9.0 9.1 9.2 9.3 United States Small Business Administration, "Small Business Profile: New Jersey 2012," February 2013
  10. ↑ 10.0 10.1 10.2 10.3 United States Census Bureau, "2015 SUSB Annual Data Tables by Establishment Industry: U.S. & states, totals," September 2017
  11. ↑ 11.0 11.1 11.2 11.3 United States Census Bureau, "Geographic Area Series: Nonemployer Statistics by Legal Form of Organization for the U.S. and States: 2015," May 25, 2017
  12. ↑ 12.0 12.1 12.2 United States Department of Labor, Bureau of Labor Statistics, "Private sector establishment births and deaths, seasonally adjusted, New Jersey," accessed October 17, 2017
  13. ↑ AllGov, "Ambassador to Germany: Who is Philip Murphy?" July 4, 2010
  14. ↑ State of New Jersey, "Lt. Governor and Secretary of State Kim Guadagno," accessed August 21, 2017
  15. ↑ Phil Murphy 2017 campaign website, "A Public Bank – Investing in New Jersey Not Wall Street," accessed October 19, 2017
  16. ↑ Phil Murphy 2017 campaign website, "Getting New Jersey Right – The Murphy Economic Agenda," accessed October 19, 2017
  17. ↑ Kim Guadagno 2017 campaign website, "Growing New Jersey Jobs," accessed October 19, 2017
  18. ↑ The earliest data Ballotpedia found on employment-population ratio dated to 1939.
  19. ↑ Ballotpedia calculated the employment-population ratio using population data from the Federal Reserve Bank of St. Louis, the U.S. Census Bureau, and World Population Review.
  20. ↑ World Population Review, "United States Population 2017," October 20, 2017
  21. ↑ Federal Reserve Bank of St. Louis, "All Employees: Total Nonfarm Payrolls," updated October 6, 2017
  22. ↑ Federal Reserve Bank of St. Louis, "National Population," updated November 18, 2015
  23. ↑ Federal Reserve Bank of St. Louis, "Unemployment Rate in New Jersey," updated October 20, 2017
  24. ↑ Federal Reserve Bank of St. Louis, "Civilian Unemployment Rate," updated October 6, 2017
  25. ↑ The term labor force participation rate refers to the number of people who are employed or actively seeking employment. United States Department of Labor, Bureau of Labor Statistics, "How the Government Measures Unemployment," accessed October 16, 2017
  26. ↑ United States Department of Labor, Bureau of Labor Statistics, "Labor Force Statistics from the Current Population Survey (seasonally adjusted)," accessed October 16, 2017
  27. ↑ United States Small Business Administration, "Small Business Profile: United States, 2012," February 2013
  28. ↑ United States Department of Labor, Bureau of Labor Statistics, "Private sector establishment births and deaths, seasonally adjusted, Total Private," accessed October 17, 2017
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