Real reason GE left is more troubling
In January 2016, Connecticut received the jarring news that General Electric Co. was moving its headquarters from Fairfield to Boston. Fiscal conservatives and many in the business community pointed to it as a watershed moment, proving that Connecticut’s high taxes, recently boosted to address budgetary problems, and an unfriendly regulatory climate were driving employers out of the state.
Patrick Gleason, writing for Forbes, summed up this prevailing wisdom.
“It is obvious a state’s business tax climate is in bad shape when it chases away a major employer to a neighboring state whose longtime nickname has been Taxachusetts. Yet this is where Connecticut now finds itself,” wrote Gleason. “General Electric’s January 14 announcement that it is relocating its global headquarters from Fairfield, Conn. to Boston, Mass. is the latest example of how tax policy, and the electoral outcomes that direct it, are critical to a state’s economic health and competitiveness.”
Except that it wasn’t about that at all.
Unfortunately, what it was about should be of even greater concern to Connecticut because, unlike tax policy, it cannot be changed.
In a recent interview with Wall Street Journal Reporter Thomas Gryta, GE’s Chief Financial Officer Jeffrey Bornstein said the reason the company is fleeing Fairfield and Connecticut is that it is boring and unappealing to young entrepreneurs and tech savvy members of the millennial generation. And since by 2020 millennials born between 1980 and 2000 will make up half the global population, that’s not good news for Connecticut.
“There wasn’t a huge ecosystem around the company. We lived on a very beautiful property in Fairfield, but very isolated,” Bornstein told Gryta. “For younger folks, maybe not the most dynamic place in the world.”
GE will be hiring thousands of software programmers and placing them in a Boston office space that “will be very modern, green and open,” Bornstein said. “Millennials, this is the kind of environment they want to work in. Young talent today want to be in a vibrant, open, interactive, high-tech, fun kind of space.”
And that wasn’t GE in Fairfield.
“If you saw where we were in Fairfield County, it was a morgue. Very little activity. I hated it,” he said. “(In Boston) I can walk out my door and visit four startups. In Fairfield, I couldn’t even walk out my door and get a sandwich.”
Boston is the ultimate college town — MIT, Northeastern, Harvard, Boston College, Boston University — providing “tactical depth and talent.”
Bornstein makes no mention of taxes. Though Boston did provide an incentive package valued at as much as $145 million, other factors took priority. “Boston didn’t offer the most money,” he told the WSJ. “Not even close.”
An analysis by the CBRE research group found that the most highly educated millennials prefer to live in cities. They spend half their income on living, as in living it up — eating out, travel, entertainment, shopping — residing in apartments and not saving up for a house in the suburbs. That’s so 20th century, and so Connecticut.
Connecticut is the land of suburbs. Even its cities aren’t terribly big. Stamford and New Haven, the kind of places that might attract young people, have 128,000 and 130,000 people, respectively. New Haven has Yale, but that is not the confluence of colleges seen in a place such as Boston.
And CBRE found this new generation doesn’t like to commute — 30 minutes at most — more bad news for Connecticut’s suburbs of New York City.
Connecticut might just have to wait for a subsequent generation that wants that house in the suburbs to raise kids. As for now, it doesn’t have much to offer the GEs of the world looking for young talent.
Paul Choiniere is the editorial page editor.
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