Investments Generate a Multitude of Local Jobs, Income, GDP and Tax Benefits
Trenton, NJ, April 17, 2009 — A new report that demonstrates the economic impacts — both direct and indirect — of the capital construction investment made by New Jersey’s biopharmaceutical and medical technology industry was released today by the HealthCare Institute of New Jersey (HINJ) and the Pharmaceutical Research and Manufacturers of America (PhRMA). In 2008, the industry invested nearly $1.5 billion in capital construction.
Among the chief findings:
- New Jersey-based biopharmaceutical and medical technology companies make substantial investments each year in the construction of new buildings and the renovation and maintenance of existing buildings; and
- These investments have far-reaching impacts on the entire state and generate direct and indirect economic impacts for New Jersey, including the creation of jobs, income for employees, and state and local taxes paid by the workers and businesses involved in these projects. These investments are of particular benefit to local communities.
The HealthCare Institute of New Jersey (HINJ) and the Pharmaceutical Research and Manufacturers of America (PhRMA), in collaboration with the Heldrich Center for Workforce Development and the Center for Urban Policy Research at Rutgers University, recently completed an analysis of construction activity in the industry to ascertain what the direct and indirect impacts of the expenditures are on the state. The report, for the first time, also calculates local impacts by New Jersey congressional districts, as well as by the 21 counties.
“The industry’s investment in new and existing buildings is having a significant economic impact throughout Central New Jersey,” observed Professor Michael Lahr of Rutgers’ Center for Urban Policy Research. “This is especially true of Middlesex, Somerset and Union counties, where the majority of pharmaceutical industry’s construction and renovation work in the state tends to be concentrated.”
“This report provides more proof that smart investments in health care are good for the economy and good for the health care system,” said Congressman Frank Pallone, who is a key player on health care in Congress. “The immediate benefits produce jobs and an economic ripple effect that is desperately needed as we work our way out of the recession and long-term benefits go to a pharmaceutical and bio-tech industry that is so important to New Jersey. This also shows that we can improve the economy at the same time we enhance the health care system.”
One important driver of the state’s economy is the capital construction activity generated by New Jersey’s biopharmaceutical and medical technology industry. Over the past decade, the industry has been a leader in capital construction and in 2008, announced it would invest $1.46 billion dollars on new construction and on renovation and maintenance of existing HINJ member company facilities.
“These construction investments support thousands of well-paying jobs in New Jersey in a wide variety of industries, including construction, manufacturing and retail,” added Dr. Aaron Fichtner, Director of Research and Evaluation at the university’s Heldrich Center for Workforce Development. “Jobs created in the construction industry average $64,000 per year, higher than the state’s average of $57,000.”
Using a state of the art economic model to estimate construction activity impacts, researchers at Rutgers University were able to quantify what the expenditures on capital construction generate in the form of employment, income, gross domestic product (GDP) and state and local revenues.
Other findings of the report include:
- The $1.46 billion in investment generated a total of 12,536 jobs. More than 45% of these jobs were in construction while the remaining jobs were in industries that support those construction projects, including manufacturing, and wholesale and retail trade.
- Jobs supported by these investments tend to pay well. The jobs in the construction industry had average wages of $64,000, higher than the overall state average income of $57,000.
- These projects generated a total of $36.6 million in state taxes and $40.1 million in local taxes.
- The construction investments (and their economic impact) are concentrated in three Congressional Districts (6, 7, and 11) and in three counties (Middlesex, Union, and Somerset).
According to HINJ President Bob Franks, “New Jersey’s biopharmaceutical and medical technology industry is the state’s economic engine and for the past seven years, the leading sector in creating capital construction jobs. Local economies rely on — and benefit from — the job creation impacts of this activity. This new report categorically proves that.”
New Jersey’s pharmaceutical and medical technology industry remains a leading economic sector with an estimated economic impact of more that $27 billion on New Jersey’s economy. The number of New Jersey’s biotechnology and life sciences companies are growing rapidly with the number of startup, small, mid-size and fully integrated companies nearly tripling in the past decade. Last year, New Jersey’s biopharmaceutical and medical technology industry invested a record $7.9 billion in R&D activity in the Garden State, a $400 million increase over the previous year.
About the HealthCare Institute of New Jersey (HINJ)
The HealthCare Institute of New Jersey (HINJ) is a trade association for the research-based pharmaceutical and medical technology industry in New Jersey. Founded in 1997, the Institute serves as a unified voice for the industry and seeks to build awareness of this industry’s impact on New Jersey’s quality of life and economic well-being. There are currently 30 members of the HealthCare Institute of New Jersey.
About PhRMA
The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading pharmaceutical research and biotechnology companies, which are devoted to inventing medicines that allow patients to live longer, healthier, and more productive lives. PhRMA companies are leading the way in the search for new cures. PhRMA members alone invested an estimated $50.3 billion in 2008 in discovering and developing new medicines. Industry-wide research and investment reached a record $65.2 billion in 2008.
About the Heldrich Center
The John J. Heldrich Center for Workforce Development is located at the Edward J. Bloustein School of Planning and Public Policy, at Rutgers, the State University of New Jersey. It is a university-based research and policy center dedicated to raising the effectiveness of the American workplace by strengthening workforce education, placement and training programs and policies. The Center’s efforts concentrate on both nurturing concrete innovations in workforce practices, as well as addressing broad-scale economic policy changes that ensure Americans receive the education and training they need to be productive and prosperous in the knowledge economy of the 21st century.
The Center provides an independent source of analysis for reform and innovation in policy-making and employs cutting-edge research and evaluation projects to identify best practices in workforce development and employment and workplace policy. It is also engaged in significant partnerships with the private sector to design effective education and training programs and is committed to assisting job seekers and workers attain the information, education, and skills training they need to move up the economic ladder.