Connecticut Job Losses Not Over

Although the national unemployment rate is currently 9.4 percent, some states have yet to experience this level of joblessness. In April Connecticut’s unemployment rate jumped from 7.5 to 7.9 percent, according to the Bureau of Labor Statistics. This means that the state continues to fair better than many other areas throughout the country. Despite this, the State Business and Industry Association (CBIA) believes the loss of jobs in Connecticut is far from over.

According to the CBIA’s most recent Government Fairs Report, the state has already lost more than 65,600 jobs since the official onset of the national recession. Although some experts say that the economy should start to level out soon, the report states that more jobs will be lost before Connecticut begins the long road towards recovery.
The CBIA expects that, by the end of the recession, the state will have lost as may as 100,000 to 110,000 jobs. If experts are right, the economy will begin to recover either at the end of this year or in the beginning of 2010. This means that a significant number of Connecticut jobs are expected to be lost in a relatively short period of time.

Even after the official end of this recession, experts in the state don’t believe the job market will recover over night. The report quoted the Connecticut Economy quarterly review as saying, “the trough will probably be followed by a ‘jobless recovery’ like those after the previous two post-Cole War recessions.”

The reason this happens is simple. Although the economy may no longer be in danger, businesses and consumers are still cautious. This means that it will take some time before things are able to return to their pre-recession state. According to the CBIA report, it took the state over a decade to recover from the last recession. During this time employers in the area did away with around 160,000 jobs.

So far, this recession has taken a toll on every industry in the state. Since January over 3,500 businesses in the area have had to close. Between this and the fact that a large portion of the state’s population is currently unemployed, is no surprise that the Connecticut government has seen a decline in tax revenues.

Despite this, the CBIA feels that any increase in taxes could actually hurt the state. Charging employers more money could cause them to hire fewer workers and keep new businesses from the area. Both of these things could prolong the amount of time it takes for the area to make a full recovery.