Connecticut Key Performance Indicators

Prepared by the

New Haven Economic Performance Laboratory

Online at www.universityofnewhaveneconlab.org in association with the

Department of Economics and Business Analytics Pompea College of Business University of New Haven

This report is generously underwritten by the Pompea College of Business Advisory Board.

Any opinion in this report is that of the author and does not necessarily reflect the opinion of the University of New Haven or the Pompea College of Business.

2 / Connecticut Key Performance Indicators 4 / New Haven Region Economic Performance Index 6 / Income Inequality In Connecticut - Gini Coefficient 8 / The Real Gross Domestic Product 10 / Unemployment 11 / Connecticut And Its Love For Sports Betting 12 / Opinion: Connecticut’s Gas Holiday 14 / Opinion: Should We Continue the Child Tax Credit? 16 / Opinion: The War on Time: Why Standardized DST is the Right Move 19 / About the New Haven Economic

Performance Laboratory

By: Joseph Poveromo ’22

The Connecticut unemployment rate stood at 4.9 percent in February 2022. However, since February 2020, the number of working individuals plus those actively looking for work in Connecticut's labor force has shrunk by 92,000 persons. That is more than 10 percent of the country's losses, despite the state only making up one percent of the population. At the same time, the number of job opportunities in the state increased by 64 percent from December 2020 to 110,000 in December. Although the unemployment rate is showing signs of improvement, it is nearly two percentage points higher than the national average and remains persistently high.

Continuing COVID-19 issues, insufficient and misaligned workforce development efforts, supply chain disruptions, altering job and career expectations, the state's high prices, and an aging population are all contributing to the crisis. Many of these causes are structural and precede the pandemic. Still, COVID-19 has hastened the impact of other causes, particularly the aging workforce and the shift in attitudes regarding work and careers, which are partly generational. Connecticut is a high-cost state, with CNBC’s 2021 America's Top States for Business ranking it as the eighth most costly state to live in and the sixth most expensive state in which to run a business. 1 Workplace regulations are responsible for many of these costs and eroding our economy's basic base. Consider that between 2016 and 2021, the state legislature passed 28 COVID-19 mandates and debated another 122, despite sluggish job, population, and GDP growth. According to workers’ compensation data, Connecticut's workplaces are among the safest in the country. According to third-quarter 2021 figures, wages and salaries climbed by about 10 percent

Labor Force Participation in Connecticut

Labor Force Participation Rate (Percent).

Aug. 2021 Sep. 2021 Oct. 2021 Nov. 2021 Dec. 2021 Jan. 2022 Feb. 2022

year over year. According to the CBIA/Marcum 2021 Survey of Connecticut Businesses, employers are investing in hiring, and training and retention are major objectives. Policymakers must follow suit. In recent years, the state has placed a more considerable emphasis on workforce development, including the formation of the Governor's Workforce Council, which includes representatives from the public and private sectors and is charged with formulating workforce strategy and policy. Federal pandemic relief funds provide a once-in-a-lifetime chance to make the investments needed to fix many of our economy's fundamental weaknesses, such as the state's new $70 million CareerConneCT training program. However, there is a huge need for such programs. Staffers at CareerConneCT are now sifting through more than $250 million in grant applications, which is entirely overcrowded. The economic data are clear: the state is lagging the region, the country, and much of the rest of the globe. The pandemic exacerbated structural problems that had already harmed Connecticut’s capacity to compete. Progress has been made, and hope is rising, but there's still a long way to go. More collaboration and coordination between the public and private sectors, more resources, and most crucially, broader awareness and acknowledgment from the state legislature are all required to resolve this situation. Small businesses, for example, have been struck the hardest by the crisis and urgently require access to programs such as the manufacturing apprenticeship tax

Joseph Poveromo ’22

Major: Economics with a Philosophy and History Minor Hometown: Naugatuck, CT

Connecticut Unemployment Rate

6.00

Unemployment Rate in Percents

5.50

5.00

Aug. 2021 Sep. 2021 Oct. 2021 Nov. 2021 Dec. 2021 Jan. 2022 Feb. 2022

credit and the research and development tax credit to encourage talent investment. Connecticut should also exempt training programs from sales taxes, and remove barriers to reentering the workforce for recently jailed persons. More costly regulations exacerbate an already difficult position by pushing up expenses, imposing administrative burdens on small businesses, and confirming outdated ideas about the state's business climate. These are the last things the state can afford. Businesses cannot match the unprecedented demand for their products and services if these jobs stay vacant. The ensuing domino effect, sending consumers out of state or forcing Connecticut businesses to relocate and develop elsewhere, has the potential to be devastating. The attention of legislators should be on this catastrophe. In this session, there is no more pressing subject. The state must make it simpler to generate employment and maintain citizens and businesses in the state, paving the way for an economic recovery that draws new residents and businesses while maximizing the state's wonderful assets and expanding prospects.

1 https://www.cbia.com/news/economy/innovation-workforcepandemic-response-lift-cnbc-business-climate-rank/