Jobs, Cities, Shopping: 6 Ways Economy is Changing NJ
Amid one of the longest economic expansions in the history of the United States, the New Jersey economy is being reshaped in significant ways.
“We have six fundamental disruptions that are changing the structure of the state economy,” said James Hughes, an economics professor and former dean of the Edward J. Boustein School of Planning and Public Policy at Rutgers University.
The first disruption, according to Hughes, is the changing of the demographic guard.
“The fabled baby boom generation is starting to fade away and millennials are moving in,” he said.
Hughes noted that well into the early 21st Century, baby boomers were the demographic that shaped the economy.
“What the baby boom wanted, the baby boom got. But millennials now rule," he said.
“Corporate America is in desperate need of next-generation digital talent, and that’s millennials. And they are a much more urban-centric generation.’
The second disruption, says Hughes, is advancing digital information technology.
In 1995, when Pentium computers emerged, the internet became a force. And then in 2007 the smart phone was born, and the nature of work changed.
The third disruption can be described as the transformation of the office eco-system.
Hughes noted that in the 1980s and '90s, suburban offices ruled and corporations isolated themselves in silos. But these days, “corporations really want to be in urban locations where their employees can interact with academic superstars and other like-minded folks, and hopefully that will generate new, creative ideas.”
He said this has led to the fourth disruption: The slowdown of suburbanization.
Hughes pointed out we had rampant growth of the suburbanization from 1950 until 2000, but what we’ve seen over the past decade is "shrinkage in areas that are most distant from New York City and the Hudson River waterfront.”
“Corporations that once wanted to be in the suburbs now want to be in urban areas.”
A fifth economic disruption, according to Hughes, is the rise of e-commerce and the collapse of retail.
“Half of American households are now subscribers to Amazon Prime, so we’re seeing closing of major retail stores.”
Hughes noted in malls and shopping centers across the state we’re seeing fewer apparel shops and more food, fitness and fun locations.
He said the positive flip to this trend is more distribution and fulfillment centers led by Amazon.
“New Jersey’s geography has made us the third largest warehouse distribution fulfillment center market in the country. So while there are fewer retail jobs, there are more fulfillment distribution jobs.”
The sixth disruption is our changing living environments.
“Home ownership was once the unrelenting American dream, that’s no longer the case. What we’re seeing is a predominance of rental housing being built in New Jersey. This is totally different. We are now a rental generation.”
Hughes noted whenever we have this kind of change there are positives and there are negatives.
“Fulfillment jobs are probably much better than retail jobs with a better career trajectory. One is shrinking, the other is growing. But overall the trend is positive,” he said.
On the flip side, he said many suburban office buildings in the state continue to lose tenants, “while offices located in 24-7 live-work-play environments are thriving.”