Growing jobs in Connecticut is going to be the next major focus of the governor”™s administration, says Catherine Smith, the new commissioner of the Department of Economic and Community Development. She spoke on a recent live broadcast of WNPR”™s Small Business Breakfast series, held in Bridgeport.
Smith acknowledged the state has “some work to do to improve the perception that Connecticut is not friendly to business.”
And while Connecticut”™s economic turnaround has been slower than desired, “I think we”™re starting to see a turning point,” said the commissioner, who also will talk to Connecticut manufacturers at Manufacturing & Technology Day at the state capitol on May 25.
Connecticut businesses are looking for that turning point, too. But it”™s proving elusive.
According to Ryan Sweet, senior economist for Moody”™s Analytics, Connecticut”™s economy will heat up only when businesses feel more confident about consumer demand ”“ which, in turn, will happen only when consumers feel more secure about their jobs.
Confidence and job security are in short supply these days, so it”™s an economic stalemate that”™s preventing Connecticut”™s economy from getting back in gear and keeping up with the rest of the country, says Sweet.
Speaking on CBIA”™s “Business Minute” broadcast, Sweet said throughout the U.S. there is a reluctance to hire again. But it”™s especially true in Connecticut, where the unemployment rate (9.1%) is higher than the national rate. Still reeling from the Wall Street meltdown, Connecticut is “struggling to find any momentum,” says Sweet.
Until their confidence returns, Connecticut businesses will continue to get as much productivity as possible out of their current workforce without adding jobs.
Chief Executive magazine agrees CEOs are not yet feeling enough confidence in Connecticut to take the hiring plunge.
In the magazine”™s recent annual rankings of the best and worst states for doing business, Connecticut stayed put ”“ keeping its alarming ranking of 44th among the 50 states. CEOs graded states on a variety of categories, including taxation, regulation, workforce quality and living environment.
Only Massachusetts, Michigan, New Jersey, Illinois, New York and California were ranked behind Connecticut. Rhode Island climbed four places from last year and was ranked 39th.
Top of the list was Texas (also the No. 1 state in 2010), followed by North Carolina, Florida, Tennessee and Georgia.
“Do not overtax business,” one CEO told the magazine. “Make sure your tax scheme does not drive business to another state.
“Have a regulatory environment and regulators that encourage good business ”“ not one that punishes businesses for minor infractions. Good employment laws help too. Let companies decide what benefits and terms will attract and keep the quality of employee they need.”
There are, however, several proposals still in the Connecticut Legislature that go against that good advice ”“ such as mandatory paid sick leave and the captive audience measure. Lawmakers who went out of their way last November to say that jobs would be their No. 1 priority this year are having a hard time keeping up with the pledge.
One CEO said that states with punitive tax and regulatory regimes earned lower rankings. While noting that “ state incentives are always welcome, what CEOs often seek are areas with consistent policies and regulations that allow them to plan, as well as intangible factors such as a state”™s overall attitude toward business.”
Given those factors, it is not surprising that Connecticut”™s economy is struggling. But that could change ”“ especially if state lawmakers, in the waning days of the 2011 legislative session, do the right thing by rejecting anti-business, anti-jobs proposals and approve others that will help our economy grow again.
Pete Gioia is vice president and economist at the Connecticut Business and Industry Association in Hartford. Reach him at pete.gioia@cbia.com.
