Where is Connecticut's economy headed?
Economist Don Klepper-Smith of DataCore Partners says the Connecticut economy "is not coming back yard by yard, mile by mile; it's coming back inch by inch." And Fred Carstensen, director of the Connecticut Center for Economic Analysis at the University of Connecticut, doesn't see much sense of urgency in Hartford to change the state's trajectory.
They offered these perspectives Thursday in a virtual economic forum held by the Yankee Institute for Public Policy, a free-market think tank with conservative and libertarian backing.
At a separate event in Hartford earlier Thursday morning, Gov. Ned Lamont was naturally more optimistic, saying he's "not putting up the 'Mission accomplished' banner, but I want to say we've made incredible progress" and a lot of companies around the country are taking a second look at Connecticut. He acknowledged the state has been flat with job growth and business starts for the last generation, and "for that I say shame on us."
David Lehman, commissioner of the state Department of Economic and Community Development, said he thinks there's "a lot to be excited about in the state." He noted budget surpluses, upgrades from ratings agencies and how the state leads the country in COVID-19 vaccinations. DECD held the Connecticut Economic Development Summit on Thursday at The Bushnell Performing Arts Center.
Speakers at both forums voiced a shared concern: monopolies.
At the DECD summit, New York University economics professor Paul Romer — Nobel laureate and former chief economist at the World Bank — said Facebook and Google are "eating this economy alive" and "both know more about me than the Stasi knew about people in East Germany, and I don't even have a Facebook account." (The Stasi was a post-World War II secret security agency.)
He bets that "the first real action" on both anti-monopoly efforts and climate change will come at the state level. The gist of Romer's speech was that states are better for handling issues facing the country than the federal government, which he said "has done a really terrible job of managing this (coronavirus) pandemic."
He thinks we should break up the Centers for Disease Control and Prevention and Food and Drug Administration into 50 CDCs and 50 FDAs, and that "not as many people would suffer if one of them failed."
Romer's statements made for an interesting transition into the next talk, which featured U.S. Assistant Secretary of Commerce for Economic Development Alejandra Castillo.
She said that government "is not the solution to everything, but it has a very unique role to play" and the funding coming from the federal government for broadband and infrastructure is "truly going to be transformational."
Entrepreneurs in Connecticut later shared why they moved their businesses to or kept their businesses in the state, and what they want to see the state do better.
Max Kothari, CEO of Express Kitchens, said there should be a separate website that lists all funding sources available. He also wants to see more businesses in Connecticut exporting.
Jennie Ripps, co-founder and CEO of the spiked-tea company Owl's Brew, said when the COVID-19 pandemic hit, she realized life with two little kids wasn't going to work in New York. She moved to Connecticut and her business to Stamford, originally thinking it was going to be temporary but she put down roots.
Gloria Kolb said the ecosystem in the Boston area was "fantastic for medical devices" but she moved to Connecticut for her husband's job, and "we stayed because of the work-life balance. The schools are awesome, the towns are well-run." She is the co-founder and CEO of Elidah Inc., which makes a treatment for women with incontinence.
She has struggled to find electrical engineers, who may graduate from UConn but get a job with a six-figure salary in Silicon Valley, and would love if there was a portal to find workers with high-level expertise.
Yankee Institute forum
In the Yankee Institute forum, U.S. Chamber of Commerce senior economist Curtis Dubay cited workforce shortages as one of three problems that will mute economic growth, along with inflation and supply chain issues.
Still, expecting that the projected 6% economic growth for 2021 will continue into next year, Dubay said he's "pretty optimistic about where the economy is and where it will be going. I think we're in for a prolonged period of really strong growth."
But Klepper-Smith said if he could pick one word specifically about Connecticut, it would be "lackluster," though "the spin doctors have been hard at work coloring the economic data."
He said the latest census data on state-to-state migration is from 2019 and shows net outmigration from Connecticut, and that while data may show people moving into Connecticut in 2020, he doesn't expect that trend to continue in the long run.
Klepper-Smith said while nonfarm jobs increased 9.1% from 2010 to 2020 nationwide, they fell 3.3% in Connecticut, and Carstensen said after 2008, the state lost high-wage jobs and gained low-wage ones.
While Connecticut is in a much better place with jobs than it was at this time last year, Klepper-Smith noted the state is still 104,000 jobs away from its peak in March 2008, before the Great Recession. Carstensen expects it might be 2030 before the state returns to where it was in 2008.
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