CBIA Points to Unsettling Economic Numbers, Urges Comprehensive Legislative Action

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“Connecticut’s job growth is trapped in a frustrating holding pattern,” explained Chris DiPentima, president and CEO of the Connecticut Business & Industry Association (CBIA), the state’s largest business organization.  “That stagnant growth stands in contrast to the significant gains being experienced in other states in the region and across the country.”

He points out that while 17,900 jobs were added through the first half of 2024, 4,400 positions were lost over the last five months.  At 0.6%—eight-tenths of a point below the national rate—Connecticut’s 12-month job growth is the slowest in the region and fifth worst in the country. New Hampshire leads the region with 2.1% year-over-year growth, followed by Rhode Island (1.7%), Vermont (1.5%), Maine (0.7%), Massachusetts (0.7%), and Connecticut.

CBIA points out that according to the latest data, there are 28,100 fewer people working and actively looking for work in Connecticut since February 2020.  And Connecticut has 73,000 job openings, or 1.3 positions for every unemployed person, with the labor shortage seen as the greatest growth challenge. 

While job openings are 5% above pre-pandemic levels, 28,100 people (-1.5%) have left the labor force since February 2020.  That “concerning decline” is in stark contrast to regional and national trends—New Hampshire (-0.3%) is the only other New England state with a smaller post-pandemic labor force.  At 2.4%, Rhode Island has the region’s strongest labor force growth, followed by Vermont (1.5%), Massachusetts (1.3%), Maine (1.3%), New Hampshire, and Connecticut.  The U.S. labor force has grown 2.4% since February 2020.

Looking through the jobs prism from a different angle, unemployment remained at a near-record low 3% in November, eighth lowest in the country and an ongoing reflection of the state’s labor force declines.

DiPentima emphasized the connection between the labor shortage and Connecticut’s high cost of living, with energy, housing, childcare, and taxes among the key factors impacting affordability. CBIA also points to recent comments by Connecticut Department of Labor research director Patrick Flaherty, who also noted that investments in housing and affordability “are key to attracting and retaining the workforce.”

There’s some good news, CBIA notes.  Connecticut wages increased an average 3.1% in 2023 and the November employment report shows workers continue to see strong wage gains through 2024.  Average hourly earnings rose 4.7% to $38.32 over the 12 months through November, while private sector weekly earnings increased 5% over the same period to $1,287.55.

The U.S. Department of Labor’s latest Job Openings and Labor Turnover Survey also shows the overall stability of Connecticut workplaces.  As of October, the state’s voluntary quits rate was 1.8%, second-lowest in the region and sixth lowest in the country.

“Employers are playing their part—their top investment priority is attracting and retaining employees, while wage growth remains strong,” DiPentima said.  “Now policymakers must play their part—when the General Assembly session begins next month, lawmakers must examine every proposal through this lens: ‘How will this bill make Connecticut more affordable?’

CBIA has developed a Reimagine Connecticut agenda that includes a range of recommendations that will address the high costs of housing, childcare, healthcare, and energy.  That agenda, developed earlier this fall, proposes policy solutions are specifically designed to:

  • Identify long-term policies to lower energy costs and improve our energy infrastructure

  • Allow small businesses access to affordable, high-quality health insurance options for employees

  • Boost manufacturing and trades job growth

  • Align graduation and school accountability index requirements to focus on career readiness and provide new paid internship opportunities

  • Implement first-time homebuyer tax incentives

  • Expand access and affordable childcare options for working parents

  • Restore the pass-through entity tax credit to its original level

  • Encourage research and development growth

  • Streamline state and local permitting

  • Leverage councils of governments to share services and take advantage of federal grant opportunities to reduce property taxes

  • Increase civil justice transparency through third-party litigation funding reform

DiPentima has said “It’s critical that policymakers enact solutions that address the high costs of living and running a business, expand career pathways, foster innovation, and grow a vibrant economy with opportunities for all residents.”