Finding a path to restoring good jobs in Connecticut
Yet another report confirms the unsettling reality that Connecticut has grown poorer with high-paying jobs exiting the state, replaced by lower-paying jobs. This time the assessment comes from the progressive, New Haven-based public policy research group, Connecticut Voices for Children.
About half the jobs created since the Great Recession ended are in low-wage service and retail industries, according to Voices for Children.
The report also notes the recession only exaggerated a trend already in place when economic disaster struck. Going back 15 years, the report found that the share of Connecticut jobs in high-wage industries has dropped by 13 percent, while jobs in low-wage industries increased by 20 percent.
A combination of technological advances, which allow businesses to get more work done with fewer humans, and jobs moved out of state or overseas, hit workers at some Connecticut industries particularly hard, including in the manufacturing, insurance and professional services fields.
Voices for Children also points to reductions in the government workforce.
Since 2008, Connecticut has shed 14,000 jobs in the public sector, the vast majority providing solid, middle-class jobs.
In presenting his austerity budget proposal to the legislature back in February, Gov. Dannel P. Malloy made some of the same points about the changing nature of Connecticut’s workforce.
From March 2008 to February 2010, Connecticut lost 54,000 jobs paying more than $80,000 annually, 25,000 jobs paying between $50,000 to $80,000, and 40,000 jobs paying less than $50,000, according to data provided at the time by Office of Policy and Management Secretary Ben Barnes.
From February 2010 through the end of last year, Connecticut recovered only 8,200 of those high-paying jobs, while mid-wage jobs grew by 37,000. Meanwhile, the state added 61,500 jobs in lower-wage industries.
This trend is not unique to Connecticut. It has fueled much of the anger in the American electorate, successfully exploited by Donald Trump in his improbable run for the presidency. But the shift has been particularly large and rapid here.
It sets off a downward cycle that Connecticut has to reverse. Lower wages mean less consumer spending, which serves as a drag on recovery. It also means reduced tax revenues, which can only be offset by reductions in government spending or increases in taxes, both damaging.
Cut public sector jobs and there are less people with buying power. Reduce human services programs and the plight of the poor grows more dire.
Raise state taxes on a struggling middle class and send more of them into poverty. Tax the richest and risk seeing them move to more tax-friendly pastures, dropping state revenues and aggravating, rather than fixing, the budget problem.
Among the solutions proposed by Voices for Children is raising the state minimum wage to $15 an hour. It is a simple solution, but not a good one. It could well solidify the state’s position as hostile of business and reduce job opportunities. The state’s minimum wage is among the highest in the nation at $9.60 and set to rise to $10.10 in January. The level of Connecticut’s minimum wage is not the problem, or the solution.
Rebuilding well-paying jobs in the state will take time and a strategy. The growth in defense jobs, particularly in this region at Electric Boat, will help.
So too will continuing the initiative to rebuild and improve the state transportation system, creating construction jobs in the short term and providing the modern infrastructure necessary to build the economy in the long term. Tolls will be necessary to at least partly subsidize that effort.
Connecticut has to find a path to fiscal stability. The constant budgetary crises, the downgrading of the state’s credit rating and the ever-present threat of new and higher business taxes are a deterrent to business growth.
Carefully selected and calculated business incentives can grow better jobs by playing to the state’s strengths. These include its finance industry, supporting the growth of subcontractors feeding into the defense industry, and encouraging the expansion of biotech research.
Connecticut has much going for it, including good schools, its location between major metropolitan areas, its natural shoreline beauty and programs that have maintained open space and farms.
The task is not easy and politics can get in the way, but there is a path to again attracting business and well-paying jobs to Connecticut.
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