Government job cuts hurt Connecticut’s economy

According to the latest Connecticut Workforce Annual Report from policy research group Connecticut Voices for Children.

The progressive think tank’s 2022 State of Connecticut Labor found that while the United States has fully recovered all jobs lost during the 2020 pandemic recession, Connecticut is not expected to reach that threshold until June of the year. next.

The researchers attributed the slowdown in job growth largely to a decline, since the Great Recession, in public sector employment in state and local government. They also highlighted new findings showing that unemployment among Connecticut’s black and Latino residents remains high and wages for these groups are disproportionately low. Both of these factors could hold back labor force growth and economic expansion, the researchers say.

“The state’s precarious position on job and pay equity is something we should pay close attention to,” said Emily Byrne, executive director of Connecticut Voices for Children.

“Job growth is a major component of broader economic growth, which is a major source of tax base growth,” the report said. “Compared to the United States, Connecticut’s slower employment recovery is contributing to a slower economic recovery.”

The group recommended various policies aimed at closing wage and employment gaps, such as expanding affordable childcare, providing stable hours through “fair work week” legislation , the limitation of so-called “non-competition” agreements that can prevent low-wage workers from seeking higher pay. with competing employers and further raise the minimum wage.

Connecticut Voices also called for more hiring in public sector jobs, which have a higher rate of union representation and a lower level of wage inequality in the sector.

“Similar to the recovery from the recent recession, the loss of public sector jobs slowed Connecticut’s recovery from the Great Recession,” said Patrick O’Brien, the organization’s director of research and policy. Public sector jobs, which include those in education, corrections, hospitals, courts and other government operations, have shrunk by 29,500 since the Great Recession, O’Brien said.

“One of the ways we think government can address this most directly is to basically fund these public sector jobs, which are going to raise wages for low- and middle-wage workers,” O’Brien said. This will increase the purchasing power of these workers, which will boost the private sector, he said. “These things are related.”

Chris DiPentima, president of the Connecticut Business & Industry Association, said he agreed with the report’s assessment of labor market gaps, which he attributed to mostly flat population growth after the Great Recession. . According to him, increases in corporate and personal taxes during this period made the state less affordable and people chose to live elsewhere.

But DiPentima sees the decline in public sector employment, “through retirements, modernization and efficiency,” as a positive development since the Great Recession.

“There are certainly areas in the public sector that have shortages that need to be filled,” he said, citing corrections and transportation, “but the majority have been able to retire employees and put put systems in place…that deliver services to Connecticut residents more efficiently and with fewer staff.

“We don’t need a bigger government,” he said.

A bright spot in this year’s report was data showing that average wages for low- and middle-income residents are growing faster than in the past. Although inequality persists in Connecticut, it has narrowed slightly over the past two years due to mandatory minimum wage increases and stronger demand for workers.

Connecticut’s annual adjustments to the minimum wage, which will increase again to $15 an hour next June, have improved fairness, O’Brien said. The wage gap between white workers and workers of color is narrowest in the lowest wage bracket because the minimum wage “sets a floor for all workers,” he said.

But, he added, “it is important to realize that we still have a very high level of wage inequality. … It’s a break from the trend of the last 40 years.

As such, Connecticut Voices recommended continuing to raise the minimum wage and – in order to offset rising inflation – annually adjusting the income taxes of those earning the minimum wage so that they do not end up paying a higher percentage of taxes every year.

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