Economic recovery leaving Connecticut behind

Eleven years ago this month, the Governor’s Commission for the Economic Diversification of Southeastern Connecticut warned about “reasons for significant concern” in its final report to then Gov. M. Jodi Rell.

The state and local communities needed to start planning for job growth and make it a priority, concluded the report. Dependence on a group of major employers — Electric Boat, Pfizer and the region’s two tribal casinos — was not sufficient to sustain a strong economy, the ad hoc committee concluded.

Its proactive recommendations included better utilization of the trade schools and Three Rivers Community College to train the high-tech workers that future manufacturing operations would demand. It called for infrastructure improvements, recommending expansion of public sewer and water systems outside the urban centers to open up more land for commercial and industrial development.

It suggested creation of a free or low-priced shuttle system that would move visitors between the region’s tourist attractions and the casinos, helping to enhance the region’s attraction to vacationers.

Very little happened. The trade schools and community colleges are doing a better job of providing training for the 21st century job market. A federal matching grant is being used to upgrade railroad tracks to accommodate newer and heavier freight trains, improving service from New London’s port north through Norwich, eventually linking with improved rail lines in Massachusetts northward.

But whether it was cost, complacency, or an emphasis on conservation over development in local conservation and development plans, there seemed to be no urgency or sense of collective mission in pursuing most of the recommendations and addressing the region’s weaknesses when it came to job growth.

In May 2008, less than two years after Rell received that report, the Norwich-New London-Westerly labor market provided 139,200 jobs. As of November, the job number has dropped to 127,900. While the intervening recession, which hit Connecticut shortly after that May 2008 jobs’ report, damaged the local labor market, the greater concern is that the state and region has been left behind in the subsequent recovery.

The November labor report showed the local labor market lost 1,100 jobs this year, the largest decline among the six state labor markets. The state, meanwhile, has lost 15,300 jobs since June. In an interview with The Day, Don Klepper-Smith, chief economist and director of research for DataCore Partners LLC, described Connecticut as “lying at the edge of recession.”

While the state’s November unemployment number of 4.6 percent is only up one-tenth of a percentage point, the jobs’ numbers show an economy moving in the wrong direction.

Making things more alarming is that these struggles come at a time when the region should be riding some significant tail winds. With the acceleration of submarine construction, Electric Boat has seen substantial job growth.

Meanwhile, the national economy is humming along, adding 228,000 jobs in November, while the unemployment rate remains at a 17-year low of 4.1 percent. The economy grew 3.3 percent in the most recent quarter, the best since 2014.

Rell formed the ad hoc committee that produced the 2006 report after the state came perilously close to seeing the Naval Submarine Base in Groton close. Local business and political leaders ultimately persuaded an oversight committee to remove the base from the Pentagon’s closure list.

In forming the committee, the Republican governor said the region’s economy needed greater diversity, but her administration never aggressively pursued its recommendations. Ironically, the committee’s greatest success was not pushing economic diversity, but persuading the state to invest in steps that should help keep the sub base off future closure reports.

Now Connecticut awaits the work of another committee — the Commission on Fiscal Stability and Economic Growth — that is scheduled to deliver recommendations to the legislature March 1.

Fiscal stability and economic growth are connected. A state with annual budgetary problems, and with them the potential for increases in taxes and fees, is not an attractive place for business investment. Yet at the same time that Connecticut is trying to stabilize the budget and taxes, it has to find a way to invest in its transportation infrastructure.

And as noted in a prior editorial, Connecticut finds itself at a disadvantage in attracting high-tech industries, which are trending to large metropolitan areas that offer an environment attractive to the young professionals staffing these industries. Connecticut has no large cities, providing instead a suburban lifestyle less enticing to a new generation.

In 2006, despite a warning, Connecticut chose business as usual. It can’t afford that attitude anymore.

 

The editorial board is composed of the publisher and four journalists of varied editing and reporting backgrounds. The board's discussions and information gained from its meetings with political, civic, and business leaders drive the institutional voice of The Day, as expressed in its editorials. The editorial department operates separately from the newsroom.

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