A recent report on Connecticut’s economy indicates that recovery in the state may be behind that of the rest of the country — and posing a threat to the future of children in the state.
The report entitled “The State of Working Connecticut 2014” was published by Connecticut Voices for Children, a child advocacy organization based in New Haven. The report concluded that Connecticut’s job market has not fully recovered from the Great Recession, causing poverty and unemployment that are affecting many of Connecticut’s families.
“Child poverty has an impact on future development,” said Ellen Shemitz ’83 LAW ’87, the executive director of Connecticut Voices for Children. “[These trends] raise troubling news.”
Those at Connecticut Voices for Children are particularly concerned because of the intersection between these groups and Connecticut’s children, Gibson said. The report states that one-third of Connecticut children are growing up in or near poverty conditions, and half of the kindergartners beginning school this year are of color.
“When families see unemployment and poverty, kids suffer,” Gibson said.
The report analyzed Connecticut labor and wage data from 1979 through 2014, with particular emphasis on the effect of the 2009 financial crisis. Unemployment was identified in the report as a particular issue in Connecticut. At 6.6 percent, the Connecticut unemployment rate is at its lowest since the recession, though still higher than the national rate of 6.2 percent. Additionally, the report said much of the decrease in unemployment was caused by people leaving the work force, instead of finding satisfactory jobs.
Although the national jobs report from June indicates that the nation is making up the jobs lost in the Great Recession, Connecticut is still far from reaching that level of employment, said Nicholas Defiesta ’14, a fiscal policy fellow at Connecticut Voices for Children, co-author of the report and former city editor for the News. Unemployment was at 4.5 percent in 2007 and has only recovered to 6.6 percent this year.
“Even five years after the end of the Great Recession, Connecticut workers continue to face an economy with fewer jobs, falling wages and rising inequality,” said Wade Gibson, director of the Fiscal Policy Center at Connecticut Voices for Children. Gibson said he predicts that Connecticut is three years from fully recovering from the 2009 financial crisis at its current pace.
The slow recovery is no different from Connecticut’s recoveries from past recessions, said Fred Carstensen GRD ’70, a professor of economics at the University of Connecticut. Connecticut’s inattention to human capital, lack of strategic investments in infrastructure and ineffective economic development policy have contributed to a similar stagnation in the past, Carstensen said.
“What Connecticut Voices [For Children] talked about is something that we’ve been well aware of and is a historic pattern,” Carstensen said. “They’ve given us a snapshot, but they ought to be offering an explanation of what has driven this.”
Many cases of labor inequality were highlighted in the report, including the gender wage gap in Connecticut, which is 50 percent greater than the national wage gap.
The highest levels of unemployment were among young workers between the ages of 16 and 24. Other groups with high levels of unemployment include African American and Hispanic minority workers, as well as workers of all races with only a high school degree or some college education.
The report concluded with two policy recommendations based on the data. The first was a call to reestablish the state Earned Income Tax Credit (EITC) that is offered to low income families when they file their tax returns. The state EITC was first passed in 2011, but was cut shortly after. Although the percentage of earnings returned to families has fluctuated between 25 and 30 percent, Connecticut Voices for Children recommends that legislators reinstate the full original 30 percent.
The second recommendation was for legislators to add a feature to the tax code that accounts for the cost of raising kids. Connecticut is one of only a small number of states that does not grant dependent exemptions or give a child tax credit.
“This economy is troubling for our future,” Gibson said. “It disproportionately affects certain people, the people raising Connecticut’s next generation of workers, leaders and parents.”
The study was carried out in conjunction with the Economic Policy Institute.