Worker Shortage Dominates Business Day Agenda
Throughout the halls of the Bushnell Performing Arts Center April 12, employers had one consistent message at Connecticut Business Day 2022: the labor shortage is the state’s top economic threat.
Companies are having trouble “across the board,” NBT Bank’s Deborah Oakliff said.
“Filling positions, keeping qualified people, and attracting them even from a salary perspective is very difficult,” Oakliff said.
Jason Howey, president and CEO of OKAY Industries, agreed, saying “skilled labor, without question,” is the biggest issue facing the New Britain-based manufacturer.
“There has been some good skilled help that has been in Connecticut for a long time, but we just have to keep that pipeline moving,” Howey added.
Business leaders made it clear policymakers were not doing enough to address the state’s shrinking labor force—the 71,400-person decline since February 2020 represents a staggering 41% of national losses and half the regional decline.
Record Job Openings
“We have a record 117,000 job openings in Connecticut,” CBIA president and CEO DiPentima said.
“If every unemployed person found a job tomorrow, we’d still have 30,800 unfilled positions. That’s an issue that cannot be ignored.”
When asked what the legislature could be doing for businesses, Jason Ensminger, president of custom machine builder Arthur G. Russell Company, said “continue to focus on workforce development.”
“A lot of people are getting an education and leaving, because there are other states that are more affordable.”
Arthur G. Russell president Jason Ensminger
“There’s not enough people to fill the jobs that we have, and there’s a lot of people leaving the workforce right now,” he added.
Getting enough workers comes from “trying to incentivize Connecticut residents to stay in the state,” Ensminger noted.
“A lot of people are getting an education and leaving, because there are other states that have more affordable places to live or less taxes,” he said.
‘Get People Back to Work’
Gov. Ned Lamont, who addressed the 220-plus attendees virtually after contracting COVID-19 the previous week, acknowledged that for businesses, “workforce is priority number one, two, and three.”
“I’m doing everything I can to make it easier for people to get back to work,” Lamont continued, “and to make sure that our workforce team is providing the training so you have the folks you need.
“We also need to improve childcare to get people back to work, and make sure it’s affordable and accessible.”
Lamont struck a bullish tone during his remarks, saying “I think Connecticut is in the strongest position we’ve been in probably a generation to 25 years.”
“We have more new business startups than ever before—20,000 plus in the last year or so,” he said.
“And what that means is if we can get 10-20% of those to grow, prosper, and expand, then Connecticut, which used to be one of the most entrepreneurial places in the country, one of the most entrepreneurial places in the world, will get back to its heyday.”
Attracting Residents
Lamont said that because of the pandemic, “tens of thousands of families have moved into the state of Connecticut, and what that means is new energy. New energy in our schools, in our communities.”
“We’re going to make the investments that are necessary—that means keeping our economy moving and getting people back to work,” he said.
DiPentima noted that it is not only crucial to attract businesses to Connecticut, but to attract more people as well by addressing the state’s high cost of living.
“We have open roles, we just have trouble filling them.”
HyAxiom’s David Giordano
Business Day attendees agreed.
“We’ve had hiring issues and lost people to other opportunities on the R&D side and the manufacturing side,” said David Giordano, head of government affairs at HyAxiom.
“We have open roles, we just have trouble filling them.”
Inflation
The governor touched on some of the highs and lows of Connecticut’s economy.
When asked what issues kept him up at night, Lamont said “8.5% inflation, leading to a Federal Reserve that will probably start raising interest rates,” which could slow down the economy.
But “we have an economy and budget built to last,” Lamont continued, highlighting a maxed-out rainy day fund, a renewed focus on job growth, and an expansion of the earned income tax credit, which will eliminate the state income tax for those under a certain income threshold.
“A lot of people are taking a look at what makes Connecticut so special,” he said. “We have to make sure we don’t overspend, that we stay within the fiscal guardrails.”
DiPentima echoed the governor’s concerns with legislative budget proposals that circumvent statutory revenue and spending caps.
“The budget proposals that came out of the Appropriations and Finance committees completely missed the mark as far as small businesses and the economy are concerned,” he said.
Unemployment Debt
DiPentima also raised the issue of using federal COVID-19 relief funds to pay back the state’s unemployment debt instead of pushing the burden onto businesses.
Connecticut has paid off $425 million of the $888 million it borrowed from the federal government in 2020 and 2021 to pay record-high pandemic-related unemployment benefit claims.
Employers covered $300 million, with federal COVID relief funds repaying $125 million—plus $26 million in interest—and face four years of tax hikes, beginning this fall, to pay off the balance.
“One of the things we’ve been advocating for is more money to go to pay back those loans,” DiPentima said, “so that we get some of that burden off the backs of businesses.”
“Now the state has the funds to invest in economic growth. We must make the right investments to drive our recovery.”
‘Bang for the Buck’
David Lehman, commissioner of the Department of Economic and Community Development, argued that the state should instead focus on paying down its unfunded pension liabilities.
“The best bang for the buck,” Lehman said, “is to make those incremental payments to our pension debt.”
Lehman said the pension debt is a high cost of capital, and “pensions have been a big burden to the state for a long time, and we need to get out of that albatross.”
DiPentima noted that the unemployment debt rests on employers, while the pension debt affects all Connecticut taxpayers.
“Employers face a 22% hike in their unemployment taxes,” he said. “The added burden on employers follows two years of disruptions due to the pandemic and now decades-high inflation.”
‘Now is Your Moment’
Lehman was joined at Business Day by Paul Lavoie, the state’s chief manufacturing officer, chief workforce officer Kelly Vallieres, and dozens of Democratic and Republican state lawmakers who took the opportunity to engage with business leaders.
Bob Stefanowski, the likely Republican candidate for governor in this year’s elections, also attended.
The event ended with a call to action from CBIA’s Eric Gjede.
“This is our day to let legislators know that we have concerns about what is going on, and we are paying attention,” he said.
“The next 22 days are frankly the most important part of the legislative session. If you’ve waited until today to talk to lawmakers, now is your moment.”
Connecticut Business Day 2022 was produced by CBIA and the Connecticut Association of Chambers of Commerce Executives and made possible through the generous support of AT&T.
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CBIA IS FIGHTING TO MAKE CONNECTICUT A TOP STATE FOR BUSINESS, JOBS, AND ECONOMIC GROWTH. A BETTER BUSINESS CLIMATE MEANS A BRIGHTER FUTURE FOR EVERYONE.