Connecticut jobs picture likely to remain bleak, UConn report says

By James Mosher, Norwich Bulletin

Most Connecticut jobs lost in the recession are gone and aren’t coming back, a report published by the University of Connecticut states.

The report, released today by the college’s Connecticut Center for Economic Analysis, shows the manufacturing sector the hardest hit, losing 50,000 jobs from 2000 to 2008. Government has gained the most, up 35,000 jobs with 31,000 of them in local government. Overall, the number of jobs in Connecticut was just 1,667 higher in 2008 than in 2000, although the average weekly wage climbed 27.9 percent.

Connecticut’s slow job growth even in good economic times has set a pattern that’s very difficult to change, wrote Peter E. Gunther, lead author of the report, published quarterly as The Connecticut Economic Outlook.

“A broader perspective gives little hope that Connecticut will see the restoration of growth in jobs — let alone high-wage jobs — given current policy and economic development initiatives,” said the report titled “Will Job Losses End? A Thin Ray of Hope.”

The national recession began in November 2007, with Connecticut’s jobless rate going from 4.6 percent at that point to 8.2 percent in registered in September 2009.

A more robust U.S. recovery would raise Connecticut with the tide, but only so far, the eight-page study predicts.

“Assuming the strong national recovery of the last quarter continues for another six months, Connecticut will soon begin to see modest job growth,” the report says. “Even then, the state recovers barely half of its job losses — only to see employment begin to contract from the middle of 2011.”

Cutting state’s government budget deficit will worsen economic and employment conditions, the study claims.

“A reduction in state expenditures by the implied total approaching $1.7 billion would translate into the loss of an additional 25,000 to 30,000 jobs, dragging overall economic activity down from forecasted levels,” the report states.

Gunther cites Nobel Prize-winning economist and author Paul Krugman in showing likeness between Japan and Connecticut, two places with highly educated work forces yet suffering protracted economic malaise. Connecticut is reaching a “tipping point” in its business climate.

“Creative, even radical” new policies are needed and should be led by state government, the report states.

“Without significant, aggressive state initiatives, the state will not see its economy’s total output regain the level achieved at the end of 2007 for several years,” the study says.