A pathway for economic growth in Connecticut
There are two things we need to move forward in our state: a strong economy that creates jobs for everyone, and a stronger workforce that reaps the rewards of that growth, leaving no one behind. next to.
Unfortunately, Connecticut’s economic recovery from recessions has followed a familiar pattern: job growth is returning, the economy is improving, but the pace of our recovery is lagging behind the national trend.
This was often the conclusion of the “Connecticut Labor Statereports Connecticut Voices for Children, which had issued largely identical warnings after every recession for the past two decades. When the US economy struggled, Connecticut suffered a worse decline than the rest of the country, and it took us a lot longer to get back on track, to the point of barely being able to get back to the pre-recession line once the next crisis hits. For example, median wages for low-income workers in 2017 were close to what they were in 2007. Overall, inflation-adjusted wages for state-working families have been stuck for decades. ; the median salary in Connecticut today is at the same level as it was in the late 1990s.
The good news is that this trend strength start to change. In its most recent report, Voices found that for the first time in forty years, the real wages of low- and middle-wage workers are growing faster than those of high-wage workers. It means that instead of looking at another lost decade for many, we are finally looking at an economic recovery that makes a difference in the lives of working families. Racial and gender wage gaps remain wide (Voices estimates that black workers earn an average of 88 cents on the dollar compared to white workers of the same experience, education and industry), but they are also slowly closing. This is the result, in large part, of a tighter labor market in the wake of the pandemic, but also substantial and welcome increases to the minimum wage, paid family leave and expanded labor protections. -work. Workers gained bargaining power, which translated into higher wages.
So public policy makes a difference, and that means we can do better. Voices recommend passing legislation that would strengthen workers’ power in the labor market, including fair hours, limiting the use of non-competition agreements and increasing union coverage, including filling the staggering number of public sector jobs lost during COVID that we have yet to recover. These are all good, positive ideas, and any candidate running in November should have them at the top of their list. We should also work to make childcare more affordable, because workers cannot find jobs without access to reliable, quality childcare – and to raise taxes on rich, because otherwise how are we going to pay for it.
There is, however, an additional piece of the labor market puzzle that needs to be solved: the total number of jobs we have in our state. This is another figure that has remained largely stagnant since time immemorial; we had the same number of people employed in December 1989 as in 2019.
While an aging population (i.e. more retired workers) plays a role here, a big part of the problem is that we literally don’t have more people living in our state. Population growth for the past decade was a dismal 0.9%, and that followed three solid decades of below-trend growth. He is really difficult to grow an economy without creating more jobs, and it is extremely difficult to add more jobs if you don’t have more workers and your current workforce is retiring. But that’s what our state has been dealing with for some time.
The answer is, again, housing, the starting point of so many of Connecticut’s woes. People can’t move to our state because we’re do not build any type of accommodation at reasonable rates, not to mention affordable units. This puts a hard cap on any kind of workforce expansion, slows business growth because they can’t hire new employees, and drives up the cost of living here significantly because the scarcity of housing drives up housing prices. The result is that most of the extra wealth and income from one of our previous economic expansions ends up going to landlords, who raise rents as soon as economic growth pushes up wages, and landlords. It is Connecticut’s own form of economic redistribution, from those who do not own property to those who do.
Fortunately, this is something that can be solved by legislation simply by allowing more housing in the state and providing incentives and support to ensure that much of the new housing is indeed affordable. A mixture of zoning reform, additional funding for affordable housing, transit-oriented development, and simply allowing more people to come to our state is not just a matter of cost of living, but a requirement to develop our economy. We should do it right away.
Stagnant wages, weak job growth and a sluggish economy are not a fatality, but a political choice. We can do better, it’s about respecting the workers and providing them with housing.