New Jersey

“A valley of humility between two mountains of conceit”: That was how Benjamin Franklin described New Jersey, which even in colonial days was overshadowed by New York City and Philadelphia. New Jersey was named by King James II, then Duke of York, for the Channel Island on which he was sheltered during the English Civil War. New Jersey was plagued in its early years by rival claims from its neighbors and, still defensive in the 1980s, went to the U.S. Supreme Court to argue that it and not New York owns the Statue of Liberty and Ellis Island. New Jersey eventually got most of the islands’ acreage, but New York got the immigrant museum and Great Hall, which are built on fill land. New Jersey, though, has much to say for itself. It is “a sort of laboratory in which the best blood is prepared for other communities to thrive on,” Woodrow Wilson said when he was governor, just a tad defensively.

From its modest beginnings, New Jersey grew in the 20th century to become one of America’s powerhouse states. Its economy transitioned from a reliance on vegetable farming—hence the name the Garden State—to cutting-edge technology. Thomas Edison churned out inventions in his laboratory at Menlo Park and gave birth to General Electric and Bell Labs. On open fields near large labor pools, U.S. automakers built assembly plants in the years after World War II, and the container port on the New Jersey side of New York harbor overshadowed the crumbling, racketeer-plagued docks of Manhattan and Brooklyn. The pharmaceutical industry came to be concentrated here, housing the headquarters of Merck; Johnson & Johnson; Bristol-Myers Squibb; Novartis; and Schering-Plough. Connected to Wall Street by Hudson tubes and ferries, New Jersey became the home of finance professionals and their back offices as well. This economy has given the state a high-income, well-educated workforce and a prosperous middle class, with a relatively high concentration of scientists and engineers. New Jersey has long had the highest or second-highest median household income of any state, although it trails others in per capita income and wealth. This state is the home not only of high-income Ph.D.s but also of The Sopranos.

Physically, New Jersey has been transformed. The oil tank farms and swamplands of the Meadowlands have become sports palaces and office complexes. The Singer factory in Elizabeth, the Western Electric factory in Kearny, the Ford Motor plant in Mahwah, and the Shulton plant in Clifton are all gone, replaced by shopping centers and hotels and other development. The General Motors plant in Linden, the state’s last auto plant, closed in 2005. The intersection of Interstates 78 and 287 has become a major shopping and office-edge city. U.S. 1 north from Princeton to North Brunswick has become one of the nation’s high-tech centers. Casting off its suburban image, New Jersey has developed an identity of its own. It is the home of big-league football, basketball, and hockey franchises and of the world’s longest expanses of boardwalk, on the Jersey Shore from Cape May to Sandy Hook. New Jersey is also the East Coast’s premier gambling getaway. Atlantic City, an hour from Philadelphia and two hours from Manhattan, had gambling revenues in 2006 of $5.5 billion, a close second behind the Las Vegas Strip’s $6.7 billion.

Within New Jersey’s close boundaries is great diversity: geographically, from beaches to mountains; demographically, from old Quaker stock to new Hispanic arrivals; economically, from inner-city slums to hunt-country mansions. Although New York writers are inclined to look on New Jersey as a land of 1940s diners and 1970s shopping malls, the state much more closely resembles the rest of America than does Manhattan, although drivers will find some peculiarities: horizontal traffic lights, jughandle intersections (to make a left turn, you exit to the right and then cross over after the light has changed), and a ban on self-service gas stations. The Jersey City row houses one encounters on emerging from the Holland Tunnel give way within a few miles to the skyscrapers of Newark and its new performing arts center. Farther out are comfortably packed middle-income suburbs and the horse country around Far Hills, the university town of Princeton, old industrial cities such as Paterson and Trenton, and dozens of suburban towns and small factory cities where people work and raise families over generations. Among them are commuter towns such as Middletown, whose commuter trails lead to Lower Manhattan. (Middletown lost dozens of residents on September 11.)

Regardless of which state holds legal title to Ellis Island, New Jersey has long been a magnet for immigrants. In its post-World War II years of rapid growth, the state was a quilt pattern of WASPs, Irish, Italians, Jews, and Hungarians (the nation’s largest concentration of the latter was in Middlesex County). Small-town-like suburbs centered on Dutch Reform or Episcopal churches became heavily Catholic or Jewish. Immigrant growth is concentrated in North and Central Jersey, within range of New York City. South Jersey (as in adjacent Philadelphia) has few immigrant communities. Overall in 2007, the state’s population was 13% African-American, 16% Hispanic, and 7% Asian. One-third of New Jersey schoolchildren had immigrant parents. Hudson County, the land along the ridge opposite Manhattan, was the home of hundreds of thousands of Irish, Italian, Polish and Jewish immigrants in the early 20th century, and it is now more than 40% Hispanic, a grouping that includes Cubans, Puerto Ricans, Dominicans and Mexicans. Immigrants are also plentiful in the small middle-American towns of Bergen County: Filipinos in Bergenfield, Guatemalans in Fairview, Koreans in Leonia, Indians in Lodi, and Chinese in Palisades Park. The old cities of Elizabeth and Paterson are half Hispanic and nearly one-quarter of the residents of the area from Woodbridge to New Brunswick in Middlesex County are Asian. Newark still has a black majority, but it includes many of the Brazilians in the Ironbound district.

For all its strengths, New Jersey has faced difficulties in the new century. Population growth has slowed to a crawl, with only very small patches of suburban boom and of growth in gated, adult-only communities. Immigrant inflow from 2000 to 2008 was 4.8% of the 2000 population, but there was an even higher nonimmigrant outflow. Only Ocean County, with its retirement communities, and Gloucester County, on the New Jersey Turnpike outside of Philadelphia, attracted significant numbers of nonimmigrant new residents. New Jersey’s emblematic private sector firms have found themselves in trouble. Lucent, the successor to Bell Labs, was burned in the high tech bust and was acquired in 2006 by the French firm Alcatel, which soon cut thousands of jobs. The pharmaceutical firms, battered by class-action lawsuits, the threat of drug reimportation, and the difficulty of developing and getting approval for new blockbuster drugs, have seen their business model founder. Merck, Bristol-Myers Squibb, Schering-Plough, Pfizer, and Ortho Biotech have cut their New Jersey payrolls. The state had 20% of U.S. pharmaceutical jobs in 1990 but only 13% by 2008. Two New Jersey industries that once seemed launched on eternal growth trajectories found themselves in trouble in 2008. Gambling revenues fell steeply in Atlantic City, and casino owners were actively fighting a state proposal to ban smoking, which they said would drive away more customers. Banks and financial service firms in distress cut back sharply both on Wall Street and New Jersey back-office jobs. Unemployment rose from 4.2% in February 2007 to 8.3% in March 2009. Experts predicted that the state would end up with a zero increase in private-sector jobs in the decade. New Jersey did reap some gain from a 20% tax credit for moviemakers, but the results, at least in The Wrestler, were less than flattering to the state’s image.

State government has played a role in building New Jersey’s identity, but it also has placed heavy burdens on its private sector. In the 1970s, Democratic Gov. Brendan Byrne started the Meadowlands sports complex and legalized casino gambling in Atlantic City. He also pushed through an income tax in a state that, until that point, had far lower taxes than New York. Gov. Tom Kean in the 1980s reformed education and promoted the state shamelessly (“New Jersey and you: perfect together”). The revolt against Democratic Gov. Jim Florio’s tax increase in 1990 was led by the first all-New Jersey talk radio station and took on national significance with his defeat by Republican Christine Todd Whitman in 1993—a harbinger, as it turned out, of the big Republican congressional victories in 1994. In the 1990s, crime and welfare rolls dropped, but auto insurance and property taxes remained the highest in the nation. Health insurance premiums skyrocketed 71% from 2000 to ’07, thanks to state mandates requiring all policies to cover all manner of treatments. Property taxes kept rising, and the Legislature increased the sales tax in 2006. When he came to power that year, Gov. Jon Corzine pledged to support all-day kindergarten and community health clinics; he also backed the rehabilitation of Port Newark and low-interest loans for first-time homebuyers. Corzine’s proposal to lease the Turnpike and raise tolls for the first time in years would have eliminated one of New Jersey’s few bargains. The state Legislature voted to spend $270 million on embryonic-stem-cell research, not normally a state government function, and to require sharp decreases in carbon emissions, and hence higher electricity rates, in the near future.

New Jersey leaned Republican for many years. But it has become a Democratic bastion because of a growing immigrant population and the presence of many affluent suburbanites who reject conservative stands on cultural issues. No Republican has won 50% of the state vote for president or for governor since presidential candidate George H.W. Bush in 1988 and gubernatorial candidate Thomas Kean in 1985. No Republican has been elected to the U.S. Senate since Clifford Case in 1972. Starting in 2000, New Jersey has voted between 53% and 57% Democratic and between 42% and 46% Republican for president, senator, and governor. On a map showing election results by city and township, Democrats carry the spine of the state, on either side of the Metroliner route and through the South Jersey suburbs of Philadelphia. Republicans carry the outliers, most of the Jersey Shore on the east, and the affluent suburban and exurban areas on the northwest. The Democrats’ margins have been augmented by the steady absorption of immigrants and the outflow of modest-income Americans from the formerly middle-class suburbs within close range of the Metroliner spine. In early 2009, with polls showing Corzine running behind potential Republican challengers in the November 2010 election, the Democratic string seemed threatened. But in a state where 12% of the voters are African-American, 9% Latino, and 4% Asian, Republicans need to get about 60% of the votes from whites to win.

A number of factors have helped Democrats. Corzine, who amassed a $300 million fortune when Goldman Sachs went public in the 1990s, spent more than $100 million on his races for senator in 2000 and for governor in 2005, and he has generously subsidized other Democratic campaigns in between. New Jersey is the second-most expensive political state in the nation because candidates have to buy ads in the New York and Philadelphia media markets. Second, New Jersey’s high-earning, relatively well-educated voters tend not to vote in often crucial primaries—some 47% are not registered in either party—and those who do vote tend to defer to the choices of county and city political machines, which are of varying degrees of competence and cronyism. For candidates in both parties, it is a great advantage to have the designation of the local county party on the primary ballot. A 1993 campaign finance law also increased the power of parties and its leaders—it allows county parties to accept contributions 18 times as large as what candidates can receive; party chairmen, as a result, increasingly raise money and dole it out to favored candidates. These chairmen in turn sometimes control local government and possess the power to dole out contracts—the Jersey term is “pay to play.” Corzine has given hundreds of thousands of dollars to county Democratic machines, which has enabled him to wield the power once held by the party bosses of yore.

A third factor has been the readiness of Democrats to pitch losers aside, and the willingness of the legal and political establishments to go along. In September 2002, Democratic Sen. Robert Torricelli, plagued by scandal, dropped out of his race for re-election. In a bipartisan decision, the state Supreme Court upheld the right of Democrats to substitute on the ballot former Sen. Frank Lautenberg (whose relations with Torricelli were famously acerbic). In August 2004, Democratic Gov. Jim McGreevey, already in trouble because of his ties to later-convicted fundraiser Charles Kushner, announced that he would resign on November 15; this was prompted by the revelation that he had appointed a gay lover as his homeland-security adviser. McGreevey’s delayed announcement prevented a special election, which a Republican might have won. Democratic Senate President Richard Codey stepped in as acting governor, and he considered running for a full term in November. But Corzine, with his capacity to spend unlimited amounts of money, was able to muscle Codey aside and seize the gubernatorial nomination, which proved to be tantamount to election.

The outlook for New Jersey in election year 2009 seems bound to be determined by the voters’ choice between two competing visions. One view is that state government has ambitiously and courageously set out to solve major societal problems, using the resources of a bounteously prosperous society, and should remain poised to resume doing so when the inevitable economic recovery occurs. Another view is that state government has been draining the life out of a productive private sector to the point that people and production are migrating elsewhere. Those two views will be tested in 2009 and the years ahead.