commission among the “biggest obstacles” to jobs and economic growth |
What impact does the General Assembly’s Labor and Public Employees Committee have on Connecticut’s job growth and economy?
An important report, based on a new report released by the non-partisan Legislative Research Office.
The report shows that since 2016, the legislature has enacted 28 committee-emanating workplace mandates, long a source of anti-employer policies. Nothing was voted on in 2020, when the pandemic forced the suspension of the legislative session.
These mandates “either created a new requirement that private sector employers must adhere to, or tightened an existing requirement or prohibited them from taking certain actions,” the report said.
Their stint came amid a period of sluggish employment and GDP growth, reflecting a troubling disconnect between the committee leadership’s priorities and Connecticut’s critical economic needs.
The report lists some of the most egregious mandates that businesses in Connecticut, especially small businesses, have faced in recent years.
Others on the list are expected to come into effect in the coming year, no doubt adding to the many challenges employers will face in 2022.
Here is a sample of some of the more expensive mandates:
- State-administered pension scheme (2016): Requires private sector employers with five or more employees to automatically enroll any employee not eligible for an employer-sponsored pension plan into a new government-administered plan. The program was originally slated to launch in 2018, but drained budgets and executive directors while amending the law to reverse various requirements, including one allowing multiple vendors to come up with plans, which were promised to secure the passage. The mandate may well be finally in place in 2022.
- Minimum wage (2019): Increased the state’s hourly minimum wage in stages to $ 15 by June 1, 2023, with permanent increases each year thereafter indexed to the cost of employment index, as calculated by the department American Labor.
- Paid family and medical leave (2019): Requires virtually all private sector employers to provide employees with up to 14 weeks of paid vacation each year at 95% of their salary (capped at $ 900 per week). The program is funded by a 0.5% tax on employee salaries. Employees have contributed to the system since early 2021, but are not eligible for benefits until January 1, 2022. Business has argued that the fund will quickly become insolvent, and reports indicate an overwhelming number of claims have been made. already been filed.
- Employee recall restrictions (2021): Requires employers with 15 or more employees in hospitality, accommodation, food and beverage or construction services industries to rehire laid-off employees based on seniority rather than skill, merit or need . Unions have already used this mandate to target companies in sectors they were trying to organize.
- Call centers (2021): Requires call centers to give 100 days’ notice to the Labor Department if they plan to scale back or relocate operations in the state. For each day of notice less than 100 days, they are liable to a fine of $ 10,000 per day. This mandate, incorporated into legislation implementing the new state budget over two years after the House failed to act on the original bill, will not prevent a single call center from leaving the Status, but guarantees that no new will be added.
Sadly, the 28 bills listed in the report represent only a small fraction of the harmful bills proposed by the committee, which has nine Democratic and four Republicans, since 2016.
The CBIA has opposed more than 75 harmful bills approved by the committee, invariably along party lines, over the past six years, most of which have not obtained full legislative approval.
The CBIA also battled around 75 additional term proposals that never made it out of the committee, which is co-chaired by Senator Julie Kushner (D-Danbury) and Rep. Robyn Porter (D-New Haven).
Earlier this month, CBIA President and CEO Chris DiPentima told the Hartford Business Journal that the labor committee was one of the biggest “obstacles to doing business” in Connecticut. .
“There isn’t a single initiative proposed by the Connecticut business community or anything remotely designed to help create private sector jobs on this list of committee-approved bills,” said noted Eric Gjede of the CBIA.
“And this is troubling given the state’s failure to fully recover from the 2008-2010 recession and the challenges we face in rebuilding our economy from the damage caused by the pandemic.”
Connecticut was one of the few states not to recover all of the jobs lost during the 2008-2010 economic downturn.
The state has recovered 75% of the historic 292,400 jobs lost due to closures and restrictions related to COVID, while the United States has recovered 83%.
Connecticut’s unemployment rate in November was 6%, well above the U.S. rate of 4.2% and tied for sixth in the country.
A comparison of state, regional, and national unemployment rates between January 2016 and December 2019 shows Connecticut’s unemployment rate to be the highest in the country or equal to the highest in 29 of those 48 months.—60% of the period covered.
Connecticut job growth has been dismal 0.36%—6,100 jobs– in those four years, just a fraction of the 4.7% growth in the New England area. The United States created jobs at a rate of 3.8% during this period.
Connecticut’s economy also largely stagnated from 2016 to 2019. GDP was unchanged in 2016, grew 0.9% in 2017 and 2019, and only 0.4% in 2018.– well below the performance of regional and national economies.
The state’s GDP contracted 6.2% in 2020, with only the economies of Hawaii and Nevada deteriorating during the height of the pandemic. New England’s economy shrank 4.1% last year, while U.S. GDP fell 3.4%.
Personal income growth in the state—Another key sign of economic health—Also trace the region and the country.
A report by The Pew Charitable Trusts showed that without unemployment benefits and federal assistance, Connecticut’s personal income growth would have declined in 2020.
“It’s clear that the agenda pushed by the Labor Committee leadership over the past few years has done nothing to help jobs and economic growth in Connecticut,” Gjede said.
“In fact, this multitude of mandates makes a difficult situation even more difficult– further increasing the high cost of doing business here, removing administrative burdens on small employers and reinforcing old tired perceptions of the state’s business climate.
“Connecticut should make it easier-not more difficult– to create jobs here, to attract and keep businesses here. “
“Undermine” growth opportunities
Gjede said the leadership of the labor committee is undermining “the real opportunities Connecticut has to bounce back from the pandemic better and stronger than before.”
“We have weathered the pandemic relatively well compared to other states,” he said.
“Thanks to the 2017 bipartisan budget compromise that capped borrowing and spending, we made unexpected progress in addressing the long-term fiscal issues that have held us captive in endless cycles of deficits and tax hikes for years.
“These changes have improved the state’s ranking in national business climate surveys in almost every area except the cost of doing business.—An area directly influenced by fiscal and labor policies of the state.
“Lawmakers appear interested in giving tax breaks in the next legislative session. It is also time they tackled the uncontrollable torrent of workplace mandates that are only damaging the growth and reputation of the company. Connecticut.”
For more information contact the CFIA Eric Gjede (860.480.1784) | @egjede