Connecticut is one of just three states where workforce has contracted since the Great Recession

2019-07-26 | Howard County Times

July 26-- Jul. 26--As one of just three states with a workforce that's gotten smaller since before the start of the Great Recession a decade ago, Connecticut is complicating efforts by Carolyn Martin-Taylor to find work in marketing and financial education.

Armed with an education in business management, marketing experience and optimism, the South Windsor resident attended a recent Meriden job fair for tradespeople considering a career in teaching.

"I go to all these different places," Martin-Taylor said. "I have an outgoing personality. Someone is going to hire me."

In 14 states, including neighboring Massachusetts and New York, employers hired so rapidly that the percentage increase in jobs since the employment peak before the slide into the recession was in the double digits, according to the U.S. Bureau of Labor Statistics. Employment growth ranged from about 23% in Utah to nearly 11% in Georgia and Massachusetts.

More modest job growth was the rule in 31 states, where the labor force expanded by between 1.5% and 9.9%. And in New Mexico and Mississippi, employment grew by a fraction of a percent.

Nationally, the workforce has grown by 9%, up by nearly 13 million jobs, since its pre-recession peak in January 2008.

But Connecticut's workforce shrank since employment peaked at 1.72 million in March 2008, just as the impact of the recession was taking hold. Now at 1.69 million, the workforce is down by nearly 25,000 jobs, a drop of 1.5%. It's joined by West Virginia and Wyoming, where the labor force also contracted since their peak levels before the recession.

Unemployment of 3.7% is the lowest in Connecticut since March 2002. The problem isn't that workers can't find a job, but they're working several jobs to make ends meet, working part-time while looking for a full-time gig or settling for a second-choice job until they find what they really want.

Martin-Taylor, for example, has worked as a long-term substitute teacher.

"You've got to do something," she said.

The impact of a labor force incapable of expanding is felt most obviously by workers looking for better opportunities. But a sputtering labor force ripples throughout Connecticut: the economy is growing more slowly than the U.S. as a whole, residential real estate is struggling to recover from the recession, tax revenue is uneven, neighboring states are magnets for new business and the state's weak performance monopolizes political debate.

Economist Don Klepper-Smith said Connecticut is "being bypassed" as the rest of the U.S. pumps out new jobs.

"Even in our best sectors we were falling behind," he said.

The state's two economic mainstays, the finance and insurance industry and manufacturing, "took some of the biggest hits" in the Great Recession and the economic downturn of the early 1990s, said Andy Condon, research director at the state Department of Labor. Combined, they lost nearly 42,000 jobs in the past 11 years.

The private sector has regained all jobs lost since before the start of the recession and added some, but government in Connecticut at all levels, including the two tribal casinos that are included as government entities, have pared employment. As of June, the labor force, weighed down by government cuts partly in response to falling tax revenue, has regained just 79.3% of jobs since the recession.

"The lack of a full recovery is clearly due to state and local government employment," Condon said. "In most cases that's deliberate."

Even without that, however, "we'd still be slower compared to Massachusetts and New York," he said.

Senate Majority Leader Bob Duff, D-Norwalk, said employment trends are headed in the right direction.

"On the public sector we're shrinking and the private sector is growing," he said.

But the loss of jobs in the public sector is taking a toll. Paul Sarrazin knows firsthand about job cuts in automotive repair education at schools in central Connecticut. A teacher with 31 years of experience, the Berlin resident is wary of more to come and has been scouting new teaching prospects.

"It's disheartening to me," he said at the Meriden job fair. "The big question is why are these schools cutting programs?"

Despite the smaller workforce, Connecticut is benefiting from a boom in manufacturing as the state's aerospace and defense conglomerates and their supply chain hire workers to make components for airlines, fighter jet engines, submarines and helicopters.

And the educational and health services sector has posted impressive employment gains, growing steadily even during the recession.

Still, Democrats who dominate the legislature and have won the past three elections for governor are on the defensive as employment growth stalls.

Klepper-Smith, economic adviser to Republican Gov. M. Jodi Rell, blamed Democrats who run the General Assembly and Democratic Gov. Ned Lamont and his predecessor, Gov. Dannel P. Malloy, for making a priority of "preserving state jobs and protecting the unions."

"Connecticut is competing against states whose No. 1 priority is job creation and maximizing economic growth," he said.

Duff said the legislature is spending on priorities such as higher education, affordable housing and transportation, which are key to drawing employers to Connecticut and hiring workers.

He also said that by approving a state budget before the start of the state's fiscal year July 1, the legislature and Lamont addressed a complaint by business that state budgeting has been unpredictable and haphazard, hampering business planning around taxes and fees.

"Over time we've provided certainty," Duff said. "It sends a clear message we're doing things differently and doing what we need to get the most out of our tax dollars."

Condon said Connecticut's slow population growth also has contributed to weak employment gains. If the workforce is to grow, workers who have left the state or exited the labor force would need to return, he said.

"We may see that happen," Condon said. "Our wages are high, but they're not growing all that fast. It would entice people if they grew faster."

David Lehman, state commissioner of economic development, said a "real long-term growth plan" is needed for Connecticut's cities. For example, New Haven and the immediate area surrounding it can compete on cost, and efforts should focus on doubling the city's population over 20 years. At a 3.5% rate of compound growth, "it's something we need to aspire to," he said.

"The economy's performance over the past 10 years has not been adequate," Lehman said. "But the future is not indicative of the past."

The pace of growth in the labor force is a factor in economic strength, income tax revenue for government to pay for everything from schools to roads and consumer spending that accounts for 70% of the economy. And because workers typically relocate to seek work or accept job offers, a strong labor force helps boost home sales and prices.

Connecticut lags in all four areas, with economic growth in 2018 at 1%, about one-third the national expansion of 2.9 percent.

Connecticut may not likely return soon to its March 2008 employment peak. At the rate of growth in the labor force since January 2010 when the number of jobs hit bottom, the state may not regain all 24,900 jobs lost until early 2022.

And if a recession pummels the economy -- a possibility after a record 10-year expansion -- the goal will be pushed further into the future.

In the meantime, workers face another problem as they seek the best available jobs.

"Connecticut is a very expensive state," Martin-Taylor said.

Stephen Singer can be reached at ssinger@courant.com.