cteconomy.uconn.edu

Top Ten Economic Myths

Myth #10 Recovery? What Recovery?

CONNECTICUT’S RECOVERY IS UNDER WAY Change in Jobs in Thousands

Myth #9 Yes, but this recovery’s sub-par.

JOB GROWTH HAS BEEN BETTER THAN EXPECTED U.S. GDP Growth CT Job Growth

Myth #8 The state hasn’t added jobs, on net, in 20 years.

WITH ALL THE JOBS COUNTED THERE’S A LOT MORE WORK NOW THAN BEFORE NOTE: Adjusted for population, CT was 10 th in U.S. in employment growth Wage and Salary Employment Total Employment

Myth #7 High labor costs are holding Connecticut back.

OUTPUT PER WORKER FAR EXCEEDS COMPENSATION Annual Worker Output Annual Worker Compensation (Salary + Benefits) In 2011, CT #5 in Output less Compensation (After DE, AK, WY, LA CT

Myth #6 Housing costs are out of line.

HOME PRICES TRACK WITH INCOME 2010 Median Home Price 2010 Median Family Income Note: Bridgeport-Stamford 21% above predicted; NYC 67% above predicted

Myth #5 We’re a high-tax state.

WE’RE 45 TH IN OWN-REVENUE* AS A SHARE OF INCOME * Includes Property, Sales, Individual and Corporate Income Taxes and user-charges for commodities and services (e.g. tuition, fees, tolls, etc.) Own-revenue as a % of Income, 2010 Connecticut

Myth #4 The rich don’t pay their fair share.

MILLIONAIRES’ TAX SHARE EXCEEDS INCOME SHARE NOTE: In 2011, millionaires represented 0.6% of Connecticut filers.

Myth #3 Income inequality is rampant.

STATE’S INCOME INEQUALITY IS SECOND AMONG FIFTY 2011 Gini Coefficient: 1.0 = perfect inequality 0.0 = perfect equality CT New York

FEWER OF US ARE POOR, MORE ARE RICH Percent of Households, 2011

Myth #2 Connecticut is plagued by a brain drain.

WE’RE 4 th IN COLLEGE-EDUCATED ADULTS Percent of Population 25+ with bachelor’s or higher, 2011 Connecticut

AND THERE IS NO MASS EXODUS OF YOUNG PEOPLE (BUT AN AGING POPULATION POSES CHALLENGES) 1989 Profile 1989 Profile Advanced 20 Years 2009 Profile

Myth #1 We owe our success to Fairfield County.

#1 IN PER CAPITA INCOME WITH FAIRFIELD COUNTY 2011 Per Capita Income

#4 IN PER CAPITA INCOME WITHOUT FAIRFIELD COUNTY 2011 Per Capita Income

Beyond the Myths (Where to From Here?)

GIVEN THE RANGE OF ECONOMISTS’ FORECASTS FOR U.S. GDP Source: The Economist April 20 th – 26 th 2013 Annual Forecasted GDP Growth

CONNECTICUT COULD GAIN 20K-40K JOBS OVER THE NEXT TWO YEARS Thousands

STILL LEAVING CT’S JOB TOTAL 20-40K BELOW 2008 PEAK Thousands

HOME SALES ARE PICKING UP Average

AS ARE PERMITS; PARTICULARLY MULTIFAMILY Single Family Permits Multi-Family Permits

BUT PRICES ARE STILL STRUGGLING TO RECOVER High Value Tier Mid Value Tier Low Value Tier Across Tier, Prices are Down Nearly 30% Source: CREUES UConn School of Business

AND THE SEQUESTER THREATENS TO REVERSE ANY PROGRESS IN JOBS IN 2013 “Best Case” CT Job Growth CT-Specfic Sequester-Related Job Losses* 1.2% of U.S. Sequester-Related Job Losses* *CRS/Chumera Economics Estimates of direct, indirect and induced job losses Change in Jobs

TO RECAP Conventional Wisdom Doesn’t Always Stand up to the Evidence Connecticut Remains an Economic Leader and it is Recovering, But Slowly A Housing Resurgence Could Give the Economy a Much-needed Boost But Fiscal Austerity Could Still Derail the Recovery

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