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September 10, 2024
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Connecticut Voices for Children Releases 2024 State of Working Connecticut Report
Report Highlights Job Growth Stagnation, Wage Inequality, and Policy Solutions to Boost Economic Health
New Haven, CT [September 10, 2024] - Connecticut Voices for Children today released its annual State of Working Connecticut report, which provides a comprehensive overview of the state's economy, focusing on job growth, wage dynamics, and policy options to improve economic outcomes, especially for low- and middle-wage workers.
According to the report, Connecticut’s job growth continues to trail the national average significantly. Since the pandemic-induced recession, the state’s job growth has been nearly 3.3 percentage points lower than the national rate, resulting in 55,560 fewer jobs. A broader comparison dating back to the Great Recession shows that job growth in Connecticut is 14.5 percentage points behind the U.S. overall, translating to 248,000 fewer jobs.
“When low- and middle-wage workers struggle to make ends meet, it ripples across the entire state. The missed jobs, stagnant wages, and inequities we’ve documented aren’t just statistics—they represent countless families working harder and falling further behind,” said Emily Byrne, Executive Director of Connecticut Voices for Children. “It’s time for policymakers to confront these challenges head-on and create a fairer, more inclusive economy for all of Connecticut’s residents—and we’ve got some ideas on how to do just that.”
Key Findings on Connecticut’s Economy:
Job Growth: From the Great Recession through January 2024, Connecticut has seen a slower rate of job growth, falling 14.5 percentage points behind the national rate.
Personal Income Growth: Since 2019, Connecticut's personal income growth has lagged by 6.8 percentage points compared to the U.S., affecting the state’s ability to fund public investments.
GDP Growth: Connecticut’s nominal GDP growth is 7.6 percentage points lower than the national average, resulting in an estimated $1.3 billion in missed tax revenue for 2023 alone.
Key Findings on Wage Dynamics:
Wage Growth: The report also highlights wage growth disparities in the state. Low-wage workers saw real wage growth of 11.4% between 2019 and 2023, while middle-wage workers experienced a 0.5% decline. However, the historic surge in inflation starting in 2021 eroded much of the gains for low-wage workers and made it even more difficult for middle-wage workers to maintain their standard of living.
Wage Inequality: While higher real wage growth for low-wage workers from 2019 to 2023 reduced Connecticut’s wage inequality within the bottom 90 percent of the wage distribution by an average of 13.4 percent, wage inequality remains a pressing issue, particularly for women, and racial and ethnic minorities.
Wage Gaps: Connecticut continues to have substantial gender, racial, and ethnic wage gaps—even generally when controlling for many key factors—and the wage gaps apply to both low- and middle-wage workers.
“Connecticut’s economy cannot thrive when so many families are being left behind. By addressing critical labor market issues and reforming our regressive tax system, the state has the opportunity to boost job growth, reduce wage inequality and wage gaps, and improve economic security,” said Patrick O’Brien, report author and Research and Policy Director for Connecticut Voices for Children. “The solutions we’re proposing aim to help Connecticut achieve its full economic potential while improving the standard of living for all the state’s low- and middle-wage workers and their families.”
Policy Recommendations
The report outlines both labor market and tax policy options to address the challenges facing Connecticut’s workforce. To address major problems in the labor market, the report recommends the State:
Eliminate the subminimum wage
Establish predictable scheduling
Limit the use of noncompete agreements
Fill public sector jobs
Improve the early care and education (ECE) system by increasing the pay for ECE workers and making child care more affordable for families
To make Connecticut’s tax system less regressive, the report recommends the State:
Reduce Connecticut’s tax gap to generate additional revenue
Eliminate and/or reduce high-cost, high-growth tax expenditures to generate additional revenue
Reform Connecticut’s fiscal controls to generate additional revenue
Provide support to low- and middle-wage workers and their families by using the additional revenue to establish a fully refundable Connecticut Child Tax Credit
Provide support to low- and middle-wage workers and their families by using the additional revenue to make the Connecticut Property Tax Credit fully refundable and available to renters
Provide support to low- and middle-wage workers by using the additional revenue to increase the Connecticut Earned Income Tax Credit for childless workers
ABOUT CONNECTICUT VOICES FOR CHILDREN
Connecticut Voices for Children is a “think and do” tank working to ensure that Connecticut is a thriving and equitable state where all children achieve their full potential. In furtherance of its vision, we work in the state and nationally to advance economic justice systems change through research and policy development as well as power building and legislative advocacy.
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