On April 8, the management consulting firm McKinsey & Company presented a report—the Connecticut Economic Competitiveness Diagnostic—to the state’s Commission on Economic Competitiveness at the State Capitol.

Loaded with data, the report made no recommendations but tracked trends in Connecticut going back to the Sixties.

taxrates
The report shows Connecticut's tax rates are higher than U.S. averages and those in many neighboring states

While I was aware of much of the data contained in the report, seeing it all at once hits you like a bomb.

Yes, the report rightly cites Connecticut’s many strengths: high personal and family income, workforce, innovation, quality of life, and high-value industries in strong concentrations.

The state had a commanding lead in many of these areas for years vis-a-vis competitor and neighboring states.

But the reams of aggregated negative data and trends hit like body blows.

Connecticut has slowed its progress—and in some cases deteriorated—in some of its traditional areas of strength.

Meanwhile, competitor states, particularly our neighbors in the Northeast, have caught up or are catching up to us.

The report raised particular concerns about the state’s fiscal condition, which is a real mess.

Our cities, particularly Bridgeport and Hartford, show very poor conditions compared to other cities in the Northeast.

The report cites our poor infrastructure, particularly in transportation.

Other data showed more holes in the dike.

Job growth is very troubling. McKinsey says Connecticut is not growing the right types of jobs—that we’re growing low-income jobs in leisure and hospitality rather than much higher-paying financial services and manufacturing jobs.

When you stab yourself in the foot, there’s only one way to stop the pain and damage: Stop stabbing yourself in the foot.
Without immigration, Connecticut dives into population loss.

Trends show too many people moving out of the state—not only retirees, but also high numbers of young people—which is one reason for weak new business formation.

McKinsey reports that while new business formation and entrepreneurship are an important part of the economic mix in several Northeastern states, Connecticut is extremely weak in startups, which places us at a severe disadvantage in job creation.

None of this information is surprising. What is unsettling is getting all of it at once. This is a megaton bomb.

What’s more, these are self-inflicted wounds that started with poor fiscal policy and legislation and regulations that chills job-creating business investment.

It was fitting that the report was presented in the Legislative Office Building—the place where there is an immediate opportunity to do something about it.

We need the kind of growth that can only come from new jobs; those jobs can only grow when there is confidence that the state budget is stabilized; that stability can only come if Connecticut state legislators act. Now.

When you stab yourself in the foot, there’s only one way to stop the pain and damage: Stop stabbing yourself in the foot.


Pete Gioia is an economist with CBIA. Follow him on Twitter @CTEconomist.