cteconomy.uconn.edu

Top Ten Economic Myths

Myth #10Recovery? What Recovery?

CONNECTICUT’S RECOVERY IS UNDER WAYCh

ange

in Jo

bs in

Tho

usan

ds

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

-80

-60

-40

-20

0

20

40

25

-12-16

-21

5

13

19 17

1

-73

-18

1714

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

-4% -2% 0% 2% 4% 6% 8%

-6%

-4%

-2%

0%

2%

4%

6%

JOB GROWTH HAS BEEN BETTER THAN EXPECTED

20112012

U.S. GDP Growth

CT Job Growth

1969-2012

Myth #8The 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 10th in U.S. in employment growth 1994-2008

1990 1995 2000 2005 20101500000

1600000

1700000

1800000

1900000

2000000

2100000

2200000

2300000

Wage and Salary Employment

Total Employment

Myth #7High labor costs are holding Connecticut back.

$40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $80,000

$90,000

$100,000

$110,000

$120,000

$130,000

$140,000

$150,000

$160,000

OUTPUT PER WORKER FAR EXCEEDS COMPENSATIONAn

nual

Wor

ker O

utpu

t

Annual Worker Compensation (Salary + Benefits)

In 2011, CT #5 in Output less Compensation (After DE, AK, WY, LA

CT

Myth #6Housing costs are out of line.

$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

Hartford

Stamford

New Haven

New LondonNew York

HOME PRICES TRACK WITH INCOME20

10 M

edia

n H

ome

Pric

e

2010 Median Family Income

Note: Bridgeport-Stamford 21% above predicted; NYC 67% above predicted

Myth #5We’re a high-tax state.

South Dak

ota

Tenness

ee

Missouri

Connecticu

t

Virginia

Illinois

Oklahoma

Wash

ington

Arkansas

Alabam

a

Florid

a

Distric

t of C

olumbia

Colorado

Nebras

ka

Louisia

naUtah

Oregon

Wisc

onsin

Californ

ia

New M

exico

Mississ

ippi

Vermont

West

Virginia

North Dak

ota

New Yo

rkAlas

ka0%

5%

10%

15%

20%

25%

30%

35%

40%

WE’RE 45TH 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 #4The rich don’t pay their fair share.

MILLIONAIRES’ TAX SHARE EXCEEDS INCOME SHARE

2004 2005 2006 2007 2008 2009 2010 20110%

5%

10%

15%

20%

25%

30%

35%

40%

CT AGI Taxes

NOTE: In 2011, millionaires represented 0.6% of Connecticut filers.

Myth #3Income inequality is rampant.

Wyo

mingUtah

Vermont

South Dak

ota

Montana

Wisc

onsin

Kansas

North Dak

ota

Indiana

Nebras

ka

Nevad

a Ohio

Arizona

Missouri

Pennsyl

vania

South Caro

lina

Arkansas

Kentucky

North Caro

lina

Alabam

a

Tenness

ee

Massach

usetts

Californ

ia

New M

exico

Connecticu

t0.4

0.42

0.44

0.46

0.48

0.5

0.52

STATE’S INCOME INEQUALITY IS SECOND AMONG FIFTY

2011 Gini Coefficient: 1.0 = perfect inequality 0.0 = perfect equality CT

New York

< $25K > $200K0%

5%

10%

15%

20%

25%23%

4%

18%

9%

Avg StateConnecticut

FEWER OF US ARE POOR, MORE ARE RICHPe

rcen

t of H

ouse

hold

s, 2

011

Myth #2Connecticut is plagued by a brain drain.

Massach

usetts

Marylan

d

New Je

rsey

Vermont

New Yo

rk

Wash

ington

Rhode Isla

nd

Kansas

Hawaii

Montana

Nebras

kaAlas

ka

Pennsyl

vania

North Dak

otaTe

xas

Wisc

onsin

Missouri

Michiga

nIdah

o

South Caro

lina

Oklahoma

Indiana

Alabam

a

Louisia

na

Mississ

ippi

West

Virginia

0

5

10

15

20

25

30

35

40

45

WE’RE 4th IN COLLEGE-EDUCATED ADULTS

Percent of Population 25+ with bachelor’s or higher, 2011

Connecticut

0 to

4

5 to

9

10 to

14

15 to

19

20 to

24

25 to

29

30 to

34

35 to

39

40 to

44

45 to

49

50 to

54

55 to

59

60 to

64

65 to

69

70 to

74

75 to

79

80 to

84

85+

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

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 #1We owe our success to Fairfield County.

Connecticu

t

New Jerse

y

Marylan

d

North Dak

ota

New Hampsh

ire

Minnesota

Colorado

Rhode Islan

d

Californ

ia

Nebraska

Vermont

IowaTe

xas

Wisc

onsinMain

eOhio

Orego

n

Tennesse

e

North Caro

lina

Georgia

Arizona

New Mexic

o

Arkansas

West

Virginia

Idaho

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

#1 IN PER CAPITA INCOME WITH FAIRFIELD COUNTY

2011 Per Capita Income

Massach

usetts

New York

Marylan

d

North Dak

ota

New Hampsh

ire

Minnesota

Colorado

Rhode Islan

d

Californ

ia

Nebraska

Vermont

IowaTe

xas

Wisc

onsinMain

eOhio

Orego

n

Tennesse

e

North Caro

lina

Georgia

Arizona

New Mexic

o

Arkansas

West

Virginia

Idaho

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

#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

2013 20140

0.5

1

1.5

2

2.5

3

3.5

1.6

2.1

2.8

3.2

LowHigh

Source: The Economist April 20th – 26th 2013

Annu

al F

orec

aste

d G

DP

Gro

wth

2011 2012 2013 20140

5

10

15

20

25

LowHigh

14

10

14

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

19

22

17

14

Thou

sand

s

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

2008 2009 2010 2011 2012 2013 20141560

1580

1600

1620

1640

1660

1680

1700

LowHigh

Thou

sand

s

HOME SALES ARE PICKING UP

2000 2002 2004 2006 2008 2010 20120

1000

2000

3000

4000

5000

6000

7000

2000-2013 Average

AS ARE PERMITS; PARTICULARLY MULTIFAMILY

2004 2006 2008 2010 20120

100

200

300

400

500

600

700

800

900

Single Family Permits

Multi-Family Permits

56

315

119

213

BUT PRICES ARE STILL STRUGGLING TO RECOVER

2006 2008 2010 2012$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

$550,000

$600,000

$650,000

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

-50,000

-40,000

-30,000

-20,000

-10,000

0

10,000

20,000

30,000

“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

Chan

ge 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

cteconomy.uconn.edu