Thursday, September 07, 2006

Connecticut Median Income Declines -4.1% between 1999-2005

Washington Monthly posted an interesting Detroit Free Press article about the decline in median income nationwide. Today, Washington Monthly updated the story with more accurate figures. The end result was that Connecticut shows a drop in median income from 1999's $59,835 to 2005's $56,835. Our neighboring states did much better, with New York and Massachusetts increasing, Mass an outstanding 8.67%, and Rhode Island slipping slightly by 1.1%.

Considering that Connecticut has one of the highest median incomes to begin with, and that our economy is not reliant on a large base manufacturing industries, this decline is somewhat puzzling. Or maybe not. As Connecticut continues to grapple with an aging population that transitions out of the workforce, housing and other cost of living expenses continue to rise. Without a good labor pool, companies may continue to leave Connecticut, and further the transition of high paying jobs into low paying service-oriented jobs. Connecticut cannot sustain a viable economy by refinancing, redecorating and retailing alone.

Creating economic growth in Connecticut should be an important priority for our Gubernatorial candidates. Forward thinking has been lacking in this stealth campaign.


ctworker said...

CT poverty has been on the increase over the same period, along with the uninsured. CT wages were down for nearly all workers between 2003-2005, as the economy "recovered" and productivity increased:

Wages adjusted for inflation declined between 2003 and 2005 for all but the highest-wage workers - those who earn more than what 90 percent of the population do.

As columnist Dan Haar pointed out, "Corporate profits, meanwhile, are at high levels seen only fleetingly in the late 1990s."

That's called corporate greed, and it's why we need stronger unions and better labor laws.

Anonymous said...

well, high taxes on the middle class worked real well, thanks Mr. Weicker

Anonymous said...

"why we need stronger unions and better labor laws."

so businesses move even faster to right to work states like Georgia and the Carolinas?

Anonymous said...

Connecticut will continue a slow and steady decline as long as the following continues:

1) Families and workers are taxed higher than othe states
2) That money is given to government union employees who demand high wages and benefits relative to their value
3) Private sector businesses that actually create value move out of state

Democrats in the legislature are to blame for this situation. They are bought and paid for by 50,000 government workers who are holding the other 3 million of us hostage.

Time to kick the Democrats out of the legislature.

turfgrrl said...

anonymous 7:29 --Your points reflect the misconception of what it takes to create a growing business. Businesses look for the following:

1) Can I locate space for my company that is cost effective?
2) Can I transport my goods/services to my market
3) Is there a market for my goods/service
4) Can I find people to hire?
5) Can I find Investors?
6) Can I deploy technology to reduce overhead/costs?

This list, generalized and short, is the reality of the business climate. The real blame is that 186 towns that insist on contributing small-minded planning that precludes regional solutions.

The buck stops with the Governor. The question remains, will either candidate address the future or will the campaigns be all about the past?

Anonymous said...

If growing income had anything at all to due with the taxes why did Mass. do so well even though they are the highest taxed state in the nation?

Genghis Conn said...

Massachusetts has some things that we don't, such as:

A) Boston

Western Mass., which is a lot like inland Connecticut, is doing just about as poorly as we are. Eastern Massachusetts is a completely different story.

Jodi Is Swell said...

Elect Jodi Rell and no other Republicans. Even Jodi knows that is all that really matters. She is still out trying to raise money against a guy who can't raise money to buy a coffee instead of helping her "team". Why, because she knows her team is going to get killed. They will lose the under ticket and most house & senate races but as long as we have Jodi, that is whats important. Thanks Jodi! Where can I send you all of my money or should I just ask Lisa?

Grumpy said...

Interesting post turfgrrl.

However, broad conclusions about income and economic health really can't be drawn from this single piece of data. For instance, even the census bureau website, the original source of the data in the Detroit Free Press article, has conflicing data on income.

Here's a link to a different set of census data. On that page you will find that Connecticut's median family income increased almost $7,000 between 2002 and 2005. It's now the highest in the nation at $75,541.

Here's some other data from the census to chew on.

1. 13.5% of the Connecticut population is over 65 years old. The national number is 12.4%.

2. Connecticut's private nonfarm employment increased .3% between 2000 and 2003. During the same period, national private nonfarm employment decreased.6%.

3. 31.4% of Connecticut residents over 25 have a 4-year degree or higher. Only 24.4% of the U.S. population has a 4-year degree or higher.

The above numbers can be found here

So Connecticut has a slightly older, much more educated population than the nation at large. And at least between 2000 and 2003, while the rest of the country lost nonfarm jobs, we gained jobs.

In my view, we're in pretty good shape being the wealthiest state, with a highly educated workforce. I do agree that our tax system needs an overhaul. But, my solution would focus on shifting the tax burden off of middle-income earners. Add up property, sales and state income taxes paid by a Connecticut family earning $75k and a family earning $250k and you find that dollar for dollar, the $75k family is paying more taxes.

A progressive income tax, offset by reductions in the scope of the sales and property taxes, would give a tremendous boost to our economy.

bluecoat said...

How about cutting the cost of state govt. and the local education bureacracies whiel making them better at the same time to lower everybody's taxes? Oh yeah, and an end to corporate welfare as we know it since in the aggregate it doesn't appear to be working now does it?

Anonymous said...

turfgrrl - I started and ran a small business that employed between 20-25 people for 3 years and was able to sell it for a profit. If I was only concerned about the items on your list, I would have gone bankrupt.

Perhaps your business experience differs from mine, but I was very concerned (as were my investors) about the cost of doing business, which included, among other things, taxes and health care costs. Those 2 factors are no where on your list. I guess that explains a lot. Many people in our legislature don't think taxes and mandates matter to business either. That is why we are losing people and businesses are not growing. It costs too much to do business in this state as compared to many other states and countries around the world. The "buck" as you say, stops with our state government, not just the Governor. When the Democrats talk about mandating universal health care on all employers and making the employers pay for it, trust me, things will get much worse. You just don't get it!

bluecoat said...

Romney in MA proposed mandated healthcare coverage by all individuals who could continue to get coverage through their employers or the govt. based on need based on a study by MIT that showed such a plan would lower everybody's costs through various mechanisms. Unfortunatley, the Democrats assessed a tax on all employers who chose not to provide coevrage eventhough the employees would freely accepted jobs with them without the healthcare benefit. And as I pointed out before, MIT found the bulk of the folks without healthhcare insurance were the single male in the mid-20's. It reaally be nice if CT could id the problem before solving it.

Grumpy said...

bluecoat (11:29),

Absolutely. But specifics are what matters in this kind of debate. On that score, I agree that funding Connecticut's public education system could be made much more efficient.

We've got 169 municipalities in Connecticut ranging from small towns to small cities. There are tremendous inefficiencies involved in each of these municipalities running their own school system. We've got small towns right next door to one another with small school populations spread among small elementary schools, middle schools and high schools. Each of these schools has its own set of administrators and each district has its own superintendant and district office staff. The result is a large burden falls on local property taxpayers due to high operational overhead for their small local school system.

Taking the current district administration functions in each of the towns and combining them across regions such as the county level would offer tremendous opportunities for efficiency and cost-savings. Additionally, you could seriously look at opportunities to combine school populations across municipal borders where doing so would make sense economically and geographically.

The result could be a much more financially efficient public school system. (It could also produce more effective curriculum coordination and collaboration between teachers in neighboring communities.) Such an overhaul of our public school structure would be the best way to shift costs away from property taxes and the inequities that produces and would give a big boost to reducing the tax burden at the statewide level.

Of course, there might be a few political hurdles to overcome along the way...

Genghis Conn said...


You're absolutely right. Why does Andover need its own superintendent and administrative structure? It's already part of Region 10.

Grumpy said...


Andover is region 8. That's the RHAM High School / Middle School district. They've still got their own separate elementary school. Of course it needs it's very own superintendent, principal, BOE, etc.

Region 10 is Burlington and Harwinton. I think they're a "real" regional K-12 district. Even so, what I am suggesting are much larger regional district administration and organization structures such as county school districts.

But like I said, there might be a "few" political hurdles to overcome first. (Home Rule, Baby!)

Genghis Conn said...

Oops. Of course, you're right.

Har-Bur (region 10) has separate elementary schools, too, I think.