Population trend is state's loss

By James W. Hughes

and Joseph J. Seneca

New Jersey's economy is slow-growing, but it continues to generate extraordinarily high incomes. In 2005, New Jersey had the highest median household income among the 50 states.

If New Jersey were a country, it would be the wealthiest on earth, followed by Luxembourg.

Unfortunately, this rosy picture has a blemish: We also rank No. 1 in median housing costs.

While our median income is 27 percent higher than the national median, our housing costs are 52 percent higher. So much of our income advantage is needed to cover our higher housing costs, and we really aren't as well off as the income statistics suggest.

Unaffordable housing and other high costs of living are driving people out of the state in alarming numbers.

Our population is growing slowly - and we are facing potential population losses - because of what the Census Bureau calls "net internal out-migration."

Simply put, more people are moving from New Jersey to other parts of the country than are moving into the state from the rest of the country. And the exodus is accelerating.

In 2002, 23,704 more people moved from New Jersey to other states than moved into it from other states. The loss grew to 33,225 in 2003, 45,045 in 2004, 56,989 in 2005, and 72,547 last year. At this rate, the state will have a net internal-migration loss of more than 100,000 people by 2009.

Currently, New Jersey's population is increasing - slightly - only because births exceed deaths and because of international immigration.

Between 2005 and 2006, the state's population grew only 0.2 percent, putting New Jersey among the 10 slowest-growing states.

Also, New Jersey just lost its 10th place in total population to North Carolina. Between 2000 and 2006, North Carolina gained 807,000 people, nearly triple the increase of New Jersey (310,000 people).

Moreover, yearly population gains in New Jersey have been declining since 2002.

The state grew by 79,104 people in 2002, 63,144 in 2003, 56,467 in 2004, 32,759 in 2005, and 21,410 in 2006. Extrapolating this trend results in population shrinkage in 2008.

For many New Jerseyans, slower growth or a population decline may seem attractive, given the state's congestion and crowding.

We are the most densely populated state - 1,165 people per square mile. To quote Yogi Berra, "Nobody goes there anymore; it's too crowded." We are denser than Japan (835 people per square mile) and India (914 per square mile).

But slow growth or a decline of population has ominous economic and tax-revenue implications. It can severely affect growth in consumer spending and tax revenue.

The factors contributing to this, in addition to housing affordability, are high taxes of all types, the loss of high-paying science and technology jobs, and weak overall job growth - even as competitor states, such as North Carolina, Virginia and Maryland, offer more economic opportunities.

Population losses, in turn, impact labor supply. Jobs cannot be created without skilled people to fill them and affordable homes for people to live in.

There are no easy prescriptions for these demographic trends.

Crafting simultaneous and interrelated policies to address housing affordability, protect our high quality of life and the environment, and improve the cost-competitiveness of our economy are key to making tomorrow's New Jersey attractive enough for people to stay here and for our business community to invest here.