Two years from now, Connecticut will have a new governor to grapple with old challenges: cutting expenditures and finding new revenues to balance the budget. But positioning the state to benefit from a global economy based on innovation, collaboration and automation is the key to reviving Connecticut’s vitality. It behooves voters to recognize the structural changes in the way people work and live, as we seek a new executive to lead state government.
While there has been a meaningful recovery, job creation is one of the key challenges we face. Connecticut’s unemployment rate in March was 4.8%, up from the low point of this cycle (4.4% in December), but still significantly lower than the peak rate of 9.2% — just before Dan Malloy was first elected governor in 2010.
Employment gains since the great recession have been steady, but not sufficiently robust. In the past six years, private-sector employers have boosted payrolls by 75,000, and government has shed 10,000 positions; so the net gain is 65,000. Jobs in the private sector total 1.43 million, only 40,000 lower than the nearly identical “twin peaks” seen in 2000 and 2008.
But keen-eyed observers will notice that private payrolls in the U.S. overall were nearly +4% higher in 2008 than 2000 (as opposed to flat in Connecticut), and now are +6.5% higher than in 2008, while here they are still -3% lower. If Connecticut had merely matched the nationwide gain since 2008, there would be 135,000 more jobs in the state, tripling the jump we’ve experienced.
Republicans like to blame the slow recovery entirely on Malloy. But job creation has been a problem for the past quarter century. Consider that from 1939 until 1991, total payrolls increased at a trend rate of +1.9% per year, compounded. But since 1991, the trend growth has declined to +0.2% … practically no growth at all!
An aging demographic plays a role in slow employment growth. Two of every nine residents are aged 60 or older; this ratio has jumped significantly in the past ten years. Growth in Connecticut’s workforce (total of employed, plus unemployed and actively looking for work) shows the same pattern: trend growth of +1.5% in the 15 years prior to 1991, and only one-third of one percent since!
The loss of manufacturing jobs is a national issue, and not one that affects only the Midwestern “Rust Belt.” Manufacturing accounts for 9.3% of total employment in Connecticut, but that proportion has fallen by half since 1991. Even so, our dependence on manufacturing jobs remains higher in Connecticut than in the U.S. overall. Declines in procurement for national defense equipment are expected to be reversed; this should help boost employment in this sector.
Making Connecticut a more attractive place for R&D, entrepreneurship and high-tech industry (providing both goods and services) requires additional investment in our cities, our transportation infrastructure and our universities.
It’s never too early or too late to do what needs to be done.
The Ridgefield Democratic Town Committee provides this column.