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Economist: Connecticut Lost A Year of Job Growth Thanks to Washington

by Christine Stuart | Dec 17, 2013 1:55pm
(33) Comments | Commenting has expired
Posted to: Business, Congress, Economics, Town News, Hartford, Jobs, Labor, State Capitol

Christine Stuart photo

Steven Lanza, editor of the Connecticut Economy, a quarterly economic journal

If it wasn’t for the policy uncertainty in Washington, another 20,000 people might have been employed in Connecticut today, the editor of the University of Connecticut’s economic journal said Tuesday.

Essentially, “we lost a year of recovery based on the uncertainty in Washington,” Steven Lanza, the editor of the quarterly Connecticut Economy told a small group gathered at the Capitol for its release.

From the 2011 budget showdown and debt ceiling crisis to the fiscal cliff in 2012, and the sequester and government shutdown in 2013, the federal government and Congress have “lurched from one artificially manufactured economic calamity to the next,” Lanza said.

All that uncertainty took a toll on Connecticut residents and businesses.

Connecticut lost nearly 120,000 jobs in the recession that started in 2008 and it’s unemployment rate doubled from less than 5 percent to more than 9 percent. Connecticut added jobs during 13 of the last 14 quarters and it has recovered more than half or about 64,000 of the jobs lost since the start of the recession. But Lanza concluded that it would have added more.

“Absent the policy uncertainty in Washington, however, the gains might have totaled 20,000 more,” Lanza wrote. “Uncertainty, then, has cost Connecticut a year’s worth of employment recovery.”

If Congress is able to deal with the budget and debt ceiling deadlines it set for itself, then Connecticut is expected to add 6,300 jobs each quarter next year. But Lanza said that if it fails to do that then this year’s slowdown in job growth to about 5,300 jobs per quarter could be “an early harbinger of the troubles the state economy might face should Washington again allow the federal government to grind to a halt.”

The good news is that for the first time in three years the labor force increased because more people were looking for work, but recovery is still fragile, Lanza said.

Connecticut saw job gains this year, but some of that growth dropped off in September and October because “we were feeling some of the effects here in Connecticut of what was going on in Washington D.C.,” he said.

At that time the federal government had no budget in place and it ended up shutting its doors until Oct. 16, one one day before the United States would have exhausted its borrowing capacity.

Until the third quarter of this year a lot of workers had “simply in frustration exited the labor force,” Lanza said. But the economy seems to be rebounding because those workers are returning.

“The workers are saying ‘a-ha the jobs are coming back, let me go look for one’,” Lanza said. “So that will instantly raise the unemployment rate because they’re now in the labor force — not working, but looking for work.”

That’s good news for Connecticut’s economy going forward.

“As long as we are, in fact, able to avoid the kinds of problems that we had this fall with the government shutdown and all of the gridlock, the prospects are for growth in 2014 and beyond,” Lanza said.

As long as GDP growth remains at about 2.8 percent and absent a fiscal crisis, the state will add about 23,000 jobs next year, Lanza said.

But that optimistic outlook depends heavily upon what happens in Washington and some key sectors of the economy, such as manufacturing and financial services.

“Ever since the economy started to recover we’ve been buffeted by all these different bouts of uncertainty,” Lanza said.

In another analysis, Lanza determined that economic angst doesn’t necessarily carry the same weight across the nation. States where the word “uncertainty” received the most media attention during the 2010-2013 recovery were clustered closer to Washington. However, uncertainty also correlated with real economic variables and the use of the word also was higher in states where the unemployment rates have been slow to fall. Lanza based that analysis on a Google news search of the word “uncertainty.”

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(33) Comments

posted by: JamesBronsdon | December 17, 2013  2:35pm

So, a state employee blames the state’s anemic economy on everything federal, and finds no policies or actions of state government bearing upon that anemia. Sounds about right.

posted by: JAM | December 17, 2013  2:52pm

Once again the UCONN economists act as the apologists for the high costing, over regulated,and hardly growing business environment in Connecticut.
Is it any suprise that States which have healthy economies didn’t feel the impacts, while states like Connecticut did? Maybe the doings in DC weren’t a factor at all?
It’s easier to throw out a red herring than take a hard look in the mirror.

posted by: artythesmarty | December 17, 2013  3:43pm

That is why govt jobs are the new gold standard. I can go to ctsunlight.org and see career DMV, DSS, Lottery workers after 25 yrs making 75k with a pension because they just go in every day without worrying about layoffs, improving self to protect against outsourcing/ technolgy, working late without pay,etc. They make as much as most 55hr /week mid managers in Insurance, tech, etc without even reading this article. More than one divorce I am aware of is a result of govt employed wife so outdistancing manufacturing / IT husband who is worried to death, laid off,etc she says “who needs this?.

posted by: Noteworthy | December 17, 2013  4:57pm

This is what pulling it out of your xxx looks like. The cause and effect are so heroic they need super hero status. Of course, there is no blame to be found in the massive tax hike on hospitals that is now crimping employment; or the $1.6 billion in new taxes that are being sucked out of the economy since it was passed or that the roadways are poor because that money is being spent on anything but infrastructure. The Ivory Tower elites somehow ignore all this, ignore what common sense God gave them, and then somehow divine this gobblygook. Extraordinary.

posted by: Lawrence | December 17, 2013  6:00pm

Right wingers can’t stand a little analysis of their boys’ stupid antics in DC? Too bad.

posted by: dano860 | December 17, 2013  7:10pm

Let me understand this one, the Owebama gang doesn’t want to hold off on a program and web site they know is going to implode, as the ‘right wingers wanted to do so it is their fault that the government slowed down. Remember, the whole bogus shutdown lasted from Oct 1 - Oct 16 and that is the reason we didn’t pick up those 20 K jobs last year!? Sounds like zombies are running amuck here.
Stevie boy is holding on to this gravy train until he can pull his pension too. When was the last time he added anything of value?
You have to ask too, when was the last time we received any policies that contained ‘certainty’?
“The workers are saying ‘a-ha the jobs are coming back, let me go look for one’,” Lanza said. “So that will instantly raise the unemployment rate because they’re now in the labor force — not working, but looking for work.”...HUH? This sounds as though he’s writing a movie.
Here’s another in depth study he completed…Lanza based that analysis on a Google news search of the word “uncertainty.”
Sure glad he’s directing the States leaders. What a joke.

posted by: Lawrence | December 17, 2013  9:22pm

It is enormously telling that while Republican leaders in Washington now recognize the enormous, destructive error of their government shutdown, and while the majority of all Americans blame Republicans for the act, there are a few hardcore right wingers (see above) who refuse to acknowledge that truth, and turn instead to their same, tired old whipping boys.

And nobody believes them.

It’s really quite entertaining. Not illuminating, not instructive, not intelligent, and certainly not an informed and reasonable debate, but entertaining all the same.

posted by: gutbomb86 | December 18, 2013  2:48am

gutbomb86

Couldn’t have said it better myself, Lawrence. These commenters show up here and dump on this Lanza guy as if he’s not the one with the doctorate in economics. Hello? Is anyone listening?

And Dano? LOVE the “Owebama” meme you’ve got going there. Shows your disconnect from reality in stark relief, and that whole “website implosion” thing is starting to become a runaway success as people figure out how bad their old plans were and how much money they’re going to save under the new regulations. In fact, my family is going to save more than $120 a month switching from a terrible, so-called “free market” catastrophic plan up to a top-level gold plan through the exchange. Better insurance AND savings. Wow. And we now have a NON-PROFIT insurer breaking into the market. Fantastic.

No, the ACA is not perfect, but quite frankly the direction we’re headed now is the greatest thing our gov’t has done in my adult life, and I’ll be remembering Obama for this going forward. And - knock on wood - he hasn’t launched us into a pair of unsustainable foreign wars that were never paid for and which bottomed out our economy. Frankly I’m amazed that conservatives and Repubilcans have even poked their heads up out of their bunkers yet. The last administration is still way too fresh in public memory for anyone to want to hear what conservatives have to say - particularly when you’re all just saying the same dang thing you were saying when you drove the economy into the ditch.

You really should call him “Owebama” - we’re all going to owe him a debt of gratitude for putting up with mental midgets who’ve been trying to drag him down and destroy what’s going to be a lasting achievement. Even if the ACA changes in the coming years, and likely it will, the failed status quo continually endorsed by conservatives is over.

posted by: Joebigjoe | December 18, 2013  8:56am

GutBomb you are so funny at times. I don’t have the time to point out the flaws in what you said so all I will say is…

Merry Christmas to you and your family.

posted by: joemanc | December 18, 2013  9:20am

20,000 jobs? Why not 50K? What about 100K? Pick a number.
If your so sure Mr. Lanza, tell me, why is the unemployment rate in North Dakota only 2.7%? Were they affected by the gridlock in DC? Let’s pick a state closer to CT, NH…their unemployment rate is 5.1%. Were they affected by DC?

You mention all of the uncertainties, yet, you left out the biggest one of all: Obamacare
Shame on you.

posted by: joemanc | December 18, 2013  9:23am

“It is enormously telling that while Republican leaders in Washington now recognize the enormous, destructive error of their government shutdown…”

Hi Lawrence - private sector job creation was better than expected during the government shutdown. But don’t let facts get in the way of your partisanship.

posted by: sanecitizen | December 18, 2013  9:48am

So DC political brinksmanship cost us one year, what about the other years?  Blaming republicans ignores the fact oir state has been lagging others for years in economic expansion.


[url=“http://www.cato.org/publications/commentary/how-did-rich-connecticut-morph-one-americas-worst-performing-economies
“]This[/url] pretty much tells you all you need to know.

posted by: gutbomb86 | December 18, 2013  11:11am

gutbomb86

@joebig - if there were “so many flaws” you would actually have something to offer. The facts are the facts. They are not “flaws” simply because they don’t fit your narrative or world view. But happy holidays to you all the same.

@joemanc - North Dakota’s unemployment rate is low for one reason only - newly discovered oil. The state has a tiny fraction of CT’s population and extremely low property value - which is really what drives costs here in CT. Let us know when you turn up a new fossil fuel deposit in your back yard here in CT because then we’d all think that maybe you weren’t actually the partisan in the conversation.

It’s tough for some people to accept facts, apparently. Bottom line: the economy CRATERED under the last guy. Totally and completely CRATERED. Crash-Cartwheel-Tumble-Burn. We remember it. We’re going to continue to remember it, mainly because that side of the aisle is not offering any new ideas.

It’s like they crashed the bus and are trying to say they meant to crash the bus, and that’s the way you drive a bus - you just keep crashing it - and we’re supposed to accept that as the process going forward. No thanks.

And when facts fail to support a point of view, the labels come flying out. Again, thanks but no thanks, I’ll trust the economist’s assessment before I turn over the keys to anonymous Internet pundits.

Happy Holidays!

posted by: StanMuzyk | December 18, 2013  12:22pm

Under Gov. Malloy since 2011—there are 35,000 less jobs in Connnecticut—while our governor is engrossed in national campaigning for the Democratic Party at heartless, heavy-taxpayer
expense. It’s no wonder the state is in fiscal trouble with a $1.5 billion dollar deficit forecast next year.
Our problem is having a big-spender with an unlimited spending credit card—as our leader, with his legislative political cronies allowing this deficit demise in this former affluent Yankee trader state—to go down-hill.

posted by: joemanc | December 18, 2013  1:26pm

Hi gutbomb86 - What about New Hampshire? They don’t have oil. I gave you two examples, not one, so you cherry picked. Talk to me…their unemployment rate is lower, government a lot smaller and so are their taxes…I’m listening.
I agree that the economy collapsed under the last guy, but what about the guy before that? Remember the Dot Com burst? I remember it well since I work in IT. While that wasn’t as big as the housing bubble, it was still bad. And it’s obvious your not paying attention because the current guy’s policies are no different than the last 2…give it a couple more years. The bigger the boom, the bigger the bubble, the bigger the collapse.

posted by: Joebigjoe | December 18, 2013  1:31pm

My son came home this morning from UConn. Decided to spend a few extra days up there since exams ended. I know it wasnt post exam studying.

He will graduate with a degree in Economics in May and thank God on time in 4 years.

I was half joking with him and I asked him when he was getting a job for the day after he graduates?

He responded seriously “Dad, I’m getting this degree in economics but I don’t feel like I know anything of value or have any skills.”

‘Nuff said.

posted by: StanMuzyk | December 18, 2013  4:08pm

Joebigjoe:  Don’t let your son sell himaelf short—as he has the certified tested learning ability verifed by his degree—to succeed at the skills of a job.

posted by: Joebigjoe | December 19, 2013  7:46am

Thanks Stan. I know he does as unlike many of his peers he has been working since 15 when he could wash dishes at a local restaurant.

What he was pointing out was that he doesnt feel he has an actual skill like accountants, programmers and physical therapists have with what he has learned in econ.

We talked about it more last night and similar to what Mr. Lanza in this article has done, econ is alot of theory, guess work, and manipulation.

Hey wait… maybe my son can get a job as a politician?

posted by: Greg | December 19, 2013  10:44am

Indeed, the same old lines of “all bush’s fault” and “the republicans are awful” and “the CRA made the housing crash”, that’s great.

The sequester and budget showdowns don’t explain CT’s last in the nation economic growth, nor our own capital city’s vacancy rate being amongst the worst in the nation, nor the net loss of jobs vs jobs created.  That’s not Bush’s fault, nor can we go blame Ted Cruz & the Tea Party.  CT is losing out to Tennessee, Texas, the Carolinas, et al and nothing that happens in DC is going to change that. 

When someone from my precious UCONN finally makes an objective analysis for why CT’s growth lags the nation then maybe they won’t get evicerated every time they speak with some blinded apology for the legislature’s constatnt inability to make CT a place people want to relocate to.

Oh, and about those soon-to-be rising electric rates…

posted by: StanMuzyk | December 19, 2013  11:15am

Joebigjoe:  Whatever it takes—thinking positively—your son will achieve his goals—with his father as his inspiration.

posted by: Joebigjoe | December 19, 2013  11:34am

Happy Holidays to you and your family Stan. My toast will include a Happy, Healthy and Prosperous 2014 to you and your family.

Gotta watch that prosperous stuff though because you’ll leave people behind and then you’ll just need to be penalized for your success. wink

posted by: StanMuzyk | December 19, 2013  11:57am

Joebigjoe:  “Merry Christmas” to you and your loving family—even though the atheist ACLU wants the people to us Happy Holidays instead—and a Happy New Year to you and yours also—with GOD’S BLESSING.

posted by: Joebigjoe | December 19, 2013  12:30pm

Thanks Stan. Merry Christmas to you folks too and God Bless.

Thanks God I don’t have a TV show as that would get me suspended or worse.

posted by: dano860 | December 19, 2013  11:23pm

Owebamacare is the biggest policy with uncertainty to hit the employers. I still find it hard to believe that the policy uncertainties cost us 20 thousand jobs.
I know for a fact that the two week government slow down wasn’t the reason.
GB86, you must be to young to remember the conflict I had to do a tour of duty in. That was the one entered into by a guy with the initials JFK. After he met the unfortunate demise another guy with the initials LBJ sent more of our guys into the effort, about 50 thousand more, because he said the little bas**rds aren’t going to whip us. That is all in the past so it’s easy to forget.
Claiming that people are “mental midgets” doesn’t advance the debate. It does make you appear small though.
We’re all happy that you are saving the big bucks on your insurance but as we also know someone is helping to cover those savings, picking up the slack. There is no such thing as a non-profit insurance company in owebamacare. They all have a profit guaranteed to them by the Feds. It is written into the law.
The millenials aren’t signing up as they had hoped, now they think that their mommies are going to talk them into it now.
One of the biggest chinks in this plan is that the children are covered until they are 26. That means they aren’t putting any cash in the till. That part of the law removed a big chunk of the payers from the system.
If they guaranteed a profit to all employers then the policy problems would be moot.

posted by: gutbomb86 | December 19, 2013  11:31pm

gutbomb86

Dano - of course there’s some uncertainty that comes with the ACA. That’s expected. But the additional uncertainty from an entirely obstructionist congress hijacked by a tea party faction… that’s something else and you’re paying for that. We all are.

And don’t worry about my contribution to the insurance, pool, Dano. Since I’ve been paying for a catastrophic plan that essentially covers NOTHING for all these years, I’ve paid in far more than I’ve ever used. It’s not even remotely close. So spare us the woe-is-me, my-insurance-premium-may-cover-someone-else’s-healthcare junk. That’s what insurance does. The ACA has changed the rules to even out the way the policies work to ensure that they actually cover something. It’s just awful, I know.

posted by: Art Vandelay | December 20, 2013  12:01am

To GutBomb86,
I went to the Post Office today to mail a package.  I waited in line for over 45 minutes with one clerk at the desk and a line a mile long.  While I was waiting I got thinking that UPS & Fedex are making obscene profits year after year, yet the Post Office is hemorrhaging to the tune of BILLIONS.  UPS & Fedex are private entities while the Post Office is a quasi Government operation.  The Government is now in the business of healthcare???  God help this nation.

posted by: gutbomb86 | December 20, 2013  2:37am

gutbomb86

@joemanc - I have family in New Hampshire and I’m familiar with their problems. The state has lousy services and, like North Dakota, not many people living there. No oil, but also very little economic activity in comparison to Connecticut. Cherry pick that. Also, let me know when you locate a DMV that’s open in N.H. and how much it costs to own a vehicle there as well.

Mr. Vandelay of Vandelay Industries… the USPS is not a gov’t program and the ACA is not a gov’t takeover of health insurance. Nor does it mean there are gov’t employees or USPS workers operating the health insurance industry. The ACA regulates the quality of insurance and mandates that everyone have health insurance, and private insurers are actually still selling the insurance. Unless you’re on Medicare - which is gov’t run and, frankly, a better deal with, as I understand it, lower administrative costs than the private sector because there are no massive bonuses or salaries at the top.

That’s it. You and your pals are continually trying to foist nonsense about the ACA onto the public. Stop it. You are woefully incorrect about what’s actually happening.

posted by: Joebigjoe | December 20, 2013  9:52am

I’m not a Tea Party person but love all these attacks on the evil obstructionist Tea Party people.

Maybe their inside the beltway methods arent the best, but are almost a hundred Trillion in unfunded liabilities as a country now and that from Dems and Republicans alike.

Gutbomb how do we ever pay that or come close? Dont even mention higher taxes on the rich or CEO bonuses because that will make you look really foolish. The floor is yours Professor of Economics GutBomb…

posted by: dano860 | December 20, 2013  9:53am

GB86, no woe-is-me here. i have many options. As soon as I get the wife to retire we will be heading to our place in No. Carolina.
The following is a factual story. Unfortunately it is being repeated by thousands if not millions of people.
A extremely good friend of mine has a daughter (22) that graduated high honors from college. She obtained a very good job, right out of school. It was even in her field of study, amazing no burger flipping. She is being paid a starting salary of $45 K / year but the insurance they offer isn’t as good as her Moms. Her Mom is Ct. State employee. So now she carries her husband and her daughter on her policy. She will continue to do so until the daughter gets her masters degree (at her employers expense) and gets a better job hopefully with a better insurance plan.
These young people are removed from the system that requires their input.
Lest we forget that there fallout of 16 million and the numbers are growing, of people that have lost their policies as a result of Owebamacare.
If you like your policy you can’t keep it. If you like your doctor I hope you can afford him.

posted by: dano860 | December 20, 2013  10:12am

I forgot to mention that the daughter also gets the cash value of her insurance from the employer because she doesn’t use it.

posted by: JamesBronsdon | December 20, 2013  10:14am

gutbomb, are USPS workers civil service, or not?

posted by: smskisun | December 21, 2013  11:38am

The lack of extending the Emergency Unemployment Benefits shows how heartless and clueless our Washington politicans are. CT citizens once again will suffer their bad/unconcerned actions. This is happening as CT in in the winter season months and the unemployed here left in the cold. Now the question is what is Gov.Malloy going to do to help the state’s unemployed? Where will the help for heating coming from ? Let’s all see if Gov.Malloy cares about the citizens of this state!

posted by: StanMuzyk | December 21, 2013  1:20pm

smskisun: Don’t look for Gov. Malloy to help our citizens—as his role model—Pres. Obama is failing in the same cause.