TRENTON - As New Jersey lawmakers consider taking over Atlantic City's finances and asking voters to approve casino expansion to the northern part of the state, a new report paints a bleak picture of the ailing resort town's underlying economics.
Job loss is the new normal, the labor force is in "free fall," and the housing market is "moribund," according to a report released last week by the South Jersey Economic Review, published by the William J. Hughes Center for Public Policy at Stockton University.
Driving many of the problems, of course, is the instability of the casino industry, which anchors the local economy. Four of the city's 12 casinos closed in 2014, and some 8,000 people lost their jobs.
Atlantic City and Camden were among just 35 U.S. metropolitan areas that had experienced year-over-year job losses for 24 consecutive months as of November, the most recent month for which data were available, the report says.
Atlantic City has lost 22,000 jobs (20,000 of them in the casino industry) since its employment peak of 153,900 jobs in 2005, a 14 percent decline, according to the report.
Year-over-year employment in the casino industry was down 4,100 jobs in November. The job situation in Atlantic City could get worse. The Legislature is expected to pass a constitutional amendment this year to expand gaming beyond Atlantic City by adding two casinos in North Jersey.
Voters would have to approve the measure. Supporters say a portion of the tax revenue from the new casinos would be sent to Atlantic City to spur nongaming development.
"It's very hard to imagine that all eight properties that are currently operating can somehow continue to move forward given" such expansion, said Oliver Cooke, a Stockton economist and author of the report.
For the regional economy to improve, a new industry would have to take hold, he said. Leveraging the beach isn't necessarily a good bet. "It's a 16-week economy, effectively," Cooke said in an interview Friday. "That's not for lack of trying."
One possible bright spot in the report: Excluding the leisure and hospitality sector, which includes the casino industry, total employment was up 1,400 jobs year-over-year through November.
However, that uptick is mostly due to temporary construction jobs. "The real, long-run effects of these projects will ultimately be measured by their ability to create permanent jobs," Cooke wrote in the report.
Further evidence of the economy's fragility: The metropolitan area's labor force declined by 12,780, or 9 percent, between November 2012 and November 2015, the report says.
That percentage decrease was second only to Pine Bluff, Ark., which experienced a 12.3 percent drop.
Thus, while the unemployment rate is declining (it currently stands at 8.2 percent), that doesn't mean Atlantic City is actually adding jobs.
"The sharp decline in the local labor force reflects some combination of a rise in the number of discouraged workers (who are not counted as members of the labor force and thus are not considered unemployed) and out migration from the area," the report says.
The metro area's population declined last year for the first time since the late 1970s.
Meantime, one in every 261 residential properties in Atlantic County was in some state of foreclosure in December, more than double the statewide rate and nearly five times the national rate, the report says.
Should the state decide to take over the city government, the challenges will go well beyond restructuring debt and closing deficits.
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