Connecticut Jobs Decline
Posted on February 10, 2010
The report begins by grimly stating, there is no jobs recovery in sight. Assuming national growth trails off from the unsustainable 5.7% of the fourth quarter, Connecticut continues to lose jobs through 2011; the rate of loss simply slows from the predicted rate in the previous CCEA Outlook.
The stateâ€™s economy has undergone a critical structural change as the degree of outsourcingâ€”whether to other states or abroadâ€”has grown quickly for more than a decade; the result is that even strong growth in total output may not translate into rapid improvement in employment. The effect shows in a pattern of progressively slowed jobs recovery.
Before 1990, Connecticutâ€™s economy recovered jobs lost in recessions in ten months or less; recovery took 23 months and then 39 months in the last two recessions. Unless the state adopts policies and makes strategic investments to change this progressively deteriorating pattern, a jobs recovery may never arrive.
â€œThe degree of outsourcing, whether to other states or abroad, has grown quickly for more than a decade,â€ the outlook states. â€œThe result is that even strong growth in total output may not translate into rapid improvement in employment.â€
Outsourcing has moved large numbers of high-skill, high-wage manufacturing and financial services jobs out of Connecticut with low-wage jobs in hotels, casinos, food service and health care making up a growing percentage of the market.
Absent new strategies aimed at attracting and creating new businesses, the jobs market will continue to underperform.
â€œThe government investments must be more than countercyclical Band-Aids,â€ the report says. â€œThey should frame a facilitating business environment and create forward-looking infrastructure to generate long-term job growth, productivity gains and a transition to the increasingly electricity-dependent and knowledge economy.â€
According to NorwichBulletin.com, the reportâ€™s good news is that the rate of job losses is expected to be slower than previous forecasts, UConn said. But the losses could continue into 2012 if business output drops.
â€œUnless the state adopts policies and makes strategic investments to change this progressively deteriorating pattern, a jobs recovery may never arrive,â€ the report says.
State governmentâ€™s financial problems are among things blocking reforms, UConn said.
â€œAt the very time that is hardest to take steps central to driving a fundamental structural change … is exactly when … it is most needed.â€