UConn: State’s future ‘bleak’ for new job creation
STORRS — Well, at least it wasn’t Labor Day.
Just in time for Memorial Day, the University of Connecticut’s Center for Economic Analysis is Connecticut Economic Outlook report for May. And the news is pretty bleak.
Connecticut’s prospect for economic growth over the next two years is “weak,” the report says, and the state’s demographic trajectory is “bleak.” That’s in part because the state has failed to create any net new jobs in more than two decades, laving it unable to retain young adults or attract any significant new population.
That leaves a population that is aging rapidly — the 65-and-older age cohort has doubled, the working-age population shrinking and the “dependency ratio” (the ratio of the working age population to those under 18 and over 64) is soaring.
The alter its demographic destiny, according to the report, “The challenge is not just to replace all 120,000 jobs lost since 2008, but to drive creation of substantially more — at least 50,000 net new — to retain and attract new workers.”
The report cites a couple of hopeful signs — the creation of the Farmington campus of Jackson Laboratories is one — but emphasizes that No current policies or initiatives come close to reaching the goal in job creation that Connecticut must reach to address its demographic challenge.
During the first quarter of 2012, Connecticut’s seasonally adjusted employment rose to 1.63 million, 2,000 higher than the previous CCEA forecast. That modest positive news is balanced by the CCEA’s forecast of just 32,000 new jobs created by the first quarter of 2014, most stemming from projects already in the pipeline, such as the UConn Health Center’s new Biosciences Center.
One remedy the authors of the report advance: “that the state unleash existing stranded tax credits in a highly targeted program to drive economic growth.”
How exactly would that work?
“If the $2.5 billion in tax credits currently sitting unused and unusable on balance sheets could be redeemed ex post against the cost of major capital projects — effectively converting what is a now a liability against state tax revenue into an investment fund — this approach would create nearly ten million square feet of new advanced manufacturing, pharmaceutical, biomedical and other facilities, creating upwards of 100,000 new net jobs,” according to the CCEA report.