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Debunking Economic Myths About Connecticut's Recovery

Connecticut's economic recovery is underway, though it faces challenges and misconceptions. This analysis addresses common myths, including misunderstood job growth, labor costs, and housing market conditions. While the state has seen job additions, growth has been slower than expected compared to historical standards. Myths about high taxes and millionaire contributions are explored, revealing a more nuanced economic landscape. Despite challenges like an aging population and sequester threats, predictions suggest that Connecticut could gain significant jobs in the coming years.

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Debunking Economic Myths About Connecticut's Recovery

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  1. cteconomy.uconn.edu

  2. Top Ten Economic Myths

  3. Myth #10Recovery? What Recovery?

  4. CONNECTICUT’S RECOVERY IS UNDER WAY Change in Jobs in Thousands

  5. Myth #9Yes, but this recovery’s sub-par.

  6. job growth has been BETTER than expected CT Job Growth 2012 2011 U.S. GDP Growth 1969-2012

  7. Myth #8The state hasn’t added jobs, on net, in 20 years.

  8. WITH ALL THE JOBS COUNTED THERE’S A LOT MORE WORK NOW THAN BEFORE Total Employment Wage and Salary Employment NOTE: Adjusted for population, CT was 10th in U.S. in employment growth 1994-2008

  9. Myth #7High labor costs are holding Connecticut back.

  10. Output per worker far exceeds compensation CT Annual Worker Output In 2011, CT #5 in Output less Compensation (After DE, AK, WY, LA Annual Worker Compensation (Salary + Benefits)

  11. Myth #6Housing costs are out of line.

  12. HOME PRICES TRACK WITH INCOME 2010 Median Home Price 2010 Median Family Income Note: Bridgeport-Stamford 21% above predicted; NYC 67% above predicted

  13. Myth #5We’re a high-tax state.

  14. WE’RE 45TH IN OWN-REVENUE* AS A SHARE OF INCOME Own-revenue as a % of Income, 2010 Connecticut * Includes Property, Sales, Individual and Corporate Income Taxes and user-charges for commodities and services (e.g. tuition, fees, tolls, etc.)

  15. Myth #4The rich don’t pay their fair share.

  16. MILLIONAIRES’ TAX SHARE EXCEEDS INCOME SHARE NOTE: In 2011, millionaires represented 0.6% of Connecticut filers.

  17. Myth #3Income inequality is rampant.

  18. STATE’S INCOME INEQUALITY IS SECOND AMONG FIFTY 2011 Gini Coefficient: 1.0 = perfect inequality 0.0 = perfect equality CT New York

  19. FEWER OF US ARE POOR, MORE ARE RICH Percent of Households, 2011

  20. Myth #2Connecticut is plagued by a brain drain.

  21. WE’RE 4th IN COLLEGE-EDUCATED ADULTS Percent of Population 25+ with bachelor’s or higher, 2011 Connecticut

  22. AND THERE IS NO MASS EXODUS OF YOUNG PEOPLE (BUT AN AGING POPULATION POSES CHALLENGES) 1989 Profile 1989 Profile Advanced 20 Years 2009 Profile

  23. Myth #1We owe our success to Fairfield County.

  24. #1 IN PER CAPITA INCOME WITH FAIRFIELD COUNTY 2011 Per Capita Income

  25. #4 IN PER CAPITA INCOME WITHOUT FAIRFIELD COUNTY 2011 Per Capita Income

  26. Beyond the Myths(Where to From Here?)

  27. GIVEN THE RANGE OF ECONOMISTS’ FORECASTS FOR U.S. GDP Annual Forecasted GDP Growth Source: The Economist April 20th – 26th 2013

  28. CONNECTICUT COULD GAIN 20K-40K JOBS OVER THE NEXT TWO YEARS 22 19 17 14 14 Thousands 14 10

  29. STILL LEAVING CT’S JOB TOTAL 20-40K BELOW 2008 PEAK Thousands

  30. HOME SALES ARE PICKING UP 2000-2013 Average

  31. AS ARE PERMITS; PARTICULARLY MULTIFAMILY Single Family Permits 315 Multi-Family Permits 213 119 56

  32. BUT PRICES ARE STILL STRUGGLING TO RECOVER Across Tier, Prices are Down Nearly 30% High Value Tier Mid Value Tier Low Value Tier Source: CREUES UConn School of Business

  33. AND THE SEQUESTER THREATENS TO REVERSE ANY PROGRESS IN JOBS IN 2013 “Best Case” CT Job Growth Change in Jobs 1.2% of U.S. Sequester-Related Job Losses* CT-Specfic Sequester-Related Job Losses* *CRS/Chumera Economics Estimates of direct, indirect and induced job losses

  34. TO RECAP

  35. cteconomy.uconn.edu

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