A recently released study by the New England Economic Partnership predicts job growth in Connecticut will lag behind the national average through 2008.
Although Connecticut is expected to gain 21,000 jobs next year and 19,000 in 2006, the unemployment rate is expected to rise slightly from 4.6 percent this year to 4.7 percent during the next two years. State and city officials attribute this sluggish job growth to state demographics, increased productivity and transportation issues.
Even New Haven, which has been one of the fastest growing urban centers in the state over the past decade, has shown signs of economic decline in the last year. According to the U.S. Department of Labor, as of September, the New Haven metropolitan area has lost 0.9 percent of its jobs over the last 12-month period, while Connecticut has seen a 0.3 percent gain over the same period.
Connecticut Development Authority Senior Vice President David Willis said Connecticut’s current demographics place it at a disadvantage compared to other states in the nation.
“We have a much older workforce than most other states with many people nearing retirement,” Willis said. “And because the population of the state is not really growing, this puts a limit on our economy to generate jobs and investment.”
Don Klepper-Smith, the chief economist at the Middletown-based economic consulting firm DataCore Partners, said he thinks the main source of this decline in employment in New Haven is higher productivity, so companies are able to do more with less workers. He said although he was expecting to see better figures for New Haven, he remains optimistic about future job growth.
“People are only adding new hires if it increases overall profitability,” Klepper-Smith said. “But in the next couple years, especially with the booming biotech business, I expect things are going to get better.”
New Haven Mayor John DeStefano Jr. said Connecticut’s economy has struggled for years, losing jobs during national recovery years such as 2003. He said cities like New Haven suffer as a result, due to decreased property taxes, income taxes, and corporate income taxes.
To reverse this trend, DeStefano said he thinks the state needs to take a more proactive role in economic development, particularly in terms of facilitating transportation. He said key factors for New Haven’s economic success include developing Tweed-New Haven Airport and improving the commuter rail route to New York City.
“Those are major infrastructure problems that are regional and require regional, state action,” DeStefano said. “It’s time the state comes up with not a budget-control strategy, but a pro-job growth strategy.”
Dennis Schain, a spokesman for Connecticut Gov. M. Jodi Rell, said the state is working hard to develop Connecticut’s transportation infrastructure through efforts such as the recent purchase of a number of passenger rail cars from Virginia, which will add 2,000 seats to the New Haven Line.
“Transportation is a key part of economic growth,” Schain said. “The state has been investing heavily in both maintenance and expansion, and we’re studying more long-term solutions.”
Since taking over as governor, Rell has personally placed phone calls to businesses in an effort to draw more companies to Connecticut, Schain said. The state is also planning two summits, the first coming up on Nov. 30, to analyze potential solutions for job growth in the state. After the second summit, the group’s findings will potentially be turned into legislation, Schain said.
Greater New Haven Chamber of Commerce President Tony Rescigno said the Chamber has taken several initiatives to help expand job opportunities in New Haven in light of the negative effects of increased productivity.
“By meeting with companies in the region, we try to anticipate what their next move might be, and if we learn there will be a reduction in the staff, we try to figure out a way to avoid that,” Rescigno said. “We also make an effort to get bright young professionals to stick around New Haven and use their energy and talents to help our region grow.”