Connecticut’s financial health is being exacerbated by a failure to create well-paying jobs coupled with a too-generous contribution to the fiscal health of the nation, according to John Traynor, executive vice president and chief investment officer at People’s United Bank.
Speaking at the Fairfield Chamber of Commerce’s 2018 Economic Outlook Breakfast, Traynor argued that the state economy is being crippled by the absence of new employment opportunities. “The issue for Connecticut is jobs,” said Traynor. “We need more jobs. We need higher-paying jobs. That’s it. We can solve a lot of our tax revenue problems if we start bringing jobs back.”
Traynor also observed the evaporation of Connecticut jobs was nearly three decades in the making. “Since February 1989, the state of Connecticut has added 5,800 jobs,” he continued. “Not 5,800 per quarter, not 5,800 per year – 5,800 total. That’s incredible. We are dead last.”
Traynor pointed to data showing Connecticut only regained about 70 percent of the jobs it lost in the last recession, while the national job recovery rate was roughly 200 percent. He also worried that the jobs being created locally were inadequate to the state’s tax coffers.
“I never want to be quoted as saying good job/bad job, but when you lose the CEO of GE and you gain a barista, they pay different taxes,” he said. “We’re exporting a lot of the higher paying jobs and we’re creating jobs that are lower paying jobs that pay lower income taxes, and that’s where the state has a problem.”
He pointed to neighboring Massachusetts’ 300 percent gain of jobs and explained that state makes a concentrated effort to keep locally developed products from being manufactured elsewhere.
“If you go up to Worcester and drive along Route 9, there is a biotech corridor going on,” he said. “It is just phenomenal. Most of those ideas were not developed in Worcester. They’ve got the smart people who developed those ideas in Cambridge and Boston, and what they’ve been able to do is hold on to those ideas. We probably have a lot of great people at Yale doing research. But when they get that great idea, let’s hold on to them.”
Traynor also complained of Connecticut’s status as a donor state, which contributes more to the federal government than Washington gives back.
“For every dollar we sent to the government, we get 69 cents back,” he said. “And that counts as the subs up in Groton.”
While admitting that he was not eager for “having another war of independence” to rectify the imbalance, Traynor insisted that it needed to be addressed. “As a state, Connecticut has done more than its fair share of supporting the country,” he said. “Some reciprocity would be well received.”