Commentary: Uneven economic recovery challenges children and families

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This summer marks nearly seven years since the Great Recession ended, but for too many Connecticut families, the years-long recovery has been slow to offer reprieve.

Unemployment is decreasing, but pockets of labor force weakness persist; jobs are being created, but the industries offering them don’t pay as well; and while the top wage earners have taken home raises, everyone else is waiting for their paychecks to grow.

There are dramatic inequalities between the wealthiest and the rest —young, minority, and less-educated workers— whom the recovery is leaving behind.

Attracting and retaining industries that offer middle-class jobs is essential to ensuring economic security. Yet over the past 15 years, the share of jobs in high-wage industries has decreased by 13 percent, while the share of jobs in low-wage industries has increased by 20 percent.

Before and during the Great Recession, Connecticut lost tens of thousands of jobs in well-paying industries—especially in the manufacturing, construction, insurance, and professional services sectors.

But during the economic recovery, only 56 percent of jobs replacing them have been created in similarly well-paying industries.

As a result, a larger part of Connecticut’s workforce is working in low-wage industries.

This jobs swap manifests itself in many parts of the economy —growing income inequality, fewer people working or looking for work, and more people underemployed.

Fewer well-paying jobs also means less money in the pockets of working families trying to bridge the gap between their wages and the rent.

Lower-wage jobs don’t just pay less; they often offer less flexibility, less predictability and fewer benefits, further straining parents trying to make ends meet.

People of color are disproportionately suffering these consequences.

While unemployment for white workers is now close to pre-recession levels, African-Americans, Hispanics and those with only a high school education have yet to recover, and underemployment for workers of color is nearly three times that of whites.

In part because people of color are more likely to be employed in low-wage industries, disparities in pay between white workers and workers of color have increased since 2002.

Changes in the public sector have contributed both to the low-wage job swap and to the increased pay disparity between white workers and workers of color.

Since 2008, the state has shed more than 14,000 positions in the public sector, a reliable source of stable, middle-class jobs.

Cuts to the public sector likely have an unequal impact on African-Americans, who hold a disproportionate share of such jobs.

To have a strong tomorrow, we need to invest in healthy families today.

Right now, Connecticut can support working families by bridging the gap between low wages and the high-cost of raising a family by increasing the minimum wage to $15 an hour, restoring the Earned Income Tax Credit to 30 percent of the federal credit, and ensuring high-quality early childhood experiences for every child.

In the long-term, Connecticut can stimulate growth in high-wage industries by developing its workforce with equitably-funded K-12 education and matching it with a highly-developed physical infrastructure of airports, bridges, railways, roads, and broadband.

Investments in infrastructure would help address the unemployment and wage gap for Hispanic workers, who hold a disproportionate share of construction jobs.

The good news is that Connecticut starts from an enviable place: the state’s long tradition of human and infrastructural investments that attracts high-wage jobs means that we are still one of the most prosperous states in the nation.

By leveraging this wealth through proactive, thoughtful policies, the state can nurture a growing economy that works for everyone.

Read the full report from the Connecticut Voices for Children and explore their visualizations.

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What do you think?

  • Max

    Is there any data on whether increasing school funding in low income areas will lead to high-tech job creation?

    Or any data that the state’s human investments are what led to CT’s current (but declining) prosperity? I’m surprised by that statement because the correlation between the state’s prosperity and its human investments does not exist. If anything, if the two were linked, wouldn’t be have seen an increase in high paying jobs over the past 20 years as human investments have increased?

    I’m surprised this is posted on TrendCT – I would expect that the solutions proposed to be at least somewhat linked to data or to be evidenced-based at least in part.