Interview: CBIA’s Chris DiPentima Talks About Connecticut’s Job Growth | CT News Junkie

TRANSCRIPT: Brian Scott-Smith: We’re talking to Chris DiPentima, President and CEO of the Connecticut Business and Industry Association (CBIA). Chris, ever so many thanks for the interview. We want to talk to you about recent information that’s been pushed out by CBIA basically saying that job growth in Connecticut is trapped in a holding pattern.

What do you mean by that?

Chris DiPentima: It’s become really stagnant the last five months here. As we get ready to finish the year of 2024, we had some decent job growth in the first six months of the year, which we’ve seen, this has been a repeating pattern here in Connecticut. We have a strong six-month growth back in 22, back in 23, and again in 24 coming out of the pandemic.

But the last five months has really stalled on us, just over 4,000 jobs added. Over that five-month period of time at a time when we have 73,000 job openings. So, the job demand is there, but we’re not filling those job openings in it. And when we say it’s trapped in the holding pattern, that’s supply.

It’s just stuck and we’re not able to get the jobs filled, which in the end is affecting Connecticut’s economic growth overall.

Brian Scott-Smith: If we look at the same time last year, it was a different story. It was over 90,000 jobs. We’ve come down to 73. Some would say that’s over 20,000 jobs. What’s the problem?

Chris DiPentima: Yeah. So, we had 90,000 job openings at this time last year, 73,000 job openings today. When we talk to the business community out there, it’s less about those jobs being filled by individuals and a lot that the job demand has reduced a little bit because of businesses investing in automation, technology, process efficiency.

The businesses are getting more done, more services, more products out the door to their customers with the same number of people. And we see that in the labor force numbers, right? The labor force is around 1. 72 million people, almost exactly where we were a year ago. So, we’ve got the same number of people working and looking for work today as we did a year ago.

And that’s down 30,000 from what we had before the pandemic. So, the jobs have not grown. The labor force has not grown. But the businesses have been able to get more at the door and reduce the job opening, mostly again, because they’ve embraced technology, automation, efficiency, AI, whatever it is in their industry that allows them to do more with the same or less people.

And that’s not the best way to grow the economy. You have got to do that as well as fill those job openings. And that’s what we’re seeing in neighboring states. Those that are able to fill the job openings have better economic growth than we’re seeing here in Connecticut.

Brian Scott-Smith: Is it also a case here as well that Connecticut is an expensive place to live?

We will see in January the minimum wage goes up again to 16. 35. It’s actually, I believe, the highest minimum wage out of the New England states. Is that also part of the problem as well? It’s like it’s basically the cost of living, but also, what employers are having to now pay out.

Chris DiPentima: I think cost of living, Brian, is the core of what the issue is, quite honestly. You have a job opening. You don’t have the people to fill those job openings. So why don’t we have the people? Why don’t why is the labor force down from 2019? Why are we not adding as many jobs month after month? And when you peel back that onion and really go to the core of it, it’s the cost of living in Connecticut It’s keeping the people who live in the state, especially those who are graduate high school graduate college You’re the younger part of their professional career You hear a lot about those folks maybe moving out of the state going to college A city or another state where it’s a lower cost of living and it’s about drawing people, attracting people to Connecticut.

Both of those come down to the basic elements of the cost of living. And when we talk about the cost of living, it’s very wide. Housing, childcare, property taxes, income taxes. Healthcare is a big thing. The cost of healthcare for employees who work for employers is very expensive in Connecticut. So, these things all add up.

And so if you’re an individual. Older looking to relocate to a state, younger looking to stay in a state. You look at those costs of living numbers and it’s I, it’s just not affordable. Even though Connecticut is paying some of the highest wages in the country, the fifth highest wages overall in the country, my take home is so much more, less because of the cost of living.

It doesn’t make sense to stay here, so I’m going to go explore. the southeast or the southwest or even other places that don’t have warm weather like Montana, Idaho, Utah, Colorado. Those are the areas where we’ve heard about a lot of people relocating to.

Brian Scott-Smith: If we stay in the New England state area, you mentioned New Hampshire as being one of the leaders in the statement that you made.

Interestingly, they actually have the lowest minimum wage out of all of the six states. In fact, it’s an incredible, if I’ve read it correctly, 7. 25, which is a lot lower than all of the rest of them. What is it other than that? What is it that New Hampshire’s doing that, maybe Connecticut, could learn from, do you think?

Chris DiPentima: Yeah, so New Hampshire still follows the federal minimum wage model, as you said, one of the lowest ones in New England, no income tax. I don’t think we can get there in Connecticut because we’re so reliant on the personal income tax, but New Hampshire does not have an income tax. And they’ve really done a great job on the development and construction side of things where while their housing costs have gone up, they haven’t accelerated at the rate that the Connecticut housing costs have gone up.

And so, they’ve been able to attract a lot of people. From Massachusetts into New Hampshire as a result. They’ve grown their labor force. Their job growths are some of the best in New England and not surprisingly their economic output, what we call GDP, gross domestic product is one of the best in New England.

So, they have the job being filled. They’re getting the output out there. Their economy is growing and that creates a cyclical environment where you bring in more state tax revenue. You’re able to invest more into the state and New Hampshire doing some great things around infrastructure, transportation moving people, not only about their state, but in and out of Boston, because some people are still working and commuting to Boston.

and living in New Hampshire. So, New Hampshire is a real model in our mind. And I’ll say one of their secret ingredients is they have a commerce vision that we’ve analyzed quite a bit, where whatever they do at an agency level, it’s all about economic growth. Everything they do is about how are we going to grow the economy?

Connecticut, how are we going to make regulations easier? How are we going to make the state more affordable? And that’s the thing we’re telling our legislators this year that they need to focus on it. Connecticut. Every bill we analyze in Connecticut should be, how is this going to make Connecticut more affordable?

Brian Scott-Smith: Talk to us about the reimagine Connecticut policy solutions,

Chris DiPentima: yeah. So, the re imagined Policy Pledge is something we released in September when there was a statewide election going on.

We asked candidates, businesses, residents to sign on to it. It’s 11 policy solutions . It’s not us just saying, Hey, Connecticut’s got issues. You all go figure out how to do it. It’s us saying, hey, Connecticut’s got some challenges, but we can work together to solve them. And let’s work together.

And these are some. Ways to start the conversation and that policy pledge will now be our agenda. As we start the legislative session coming up here in January and in that pledge again, everything we’re looking at is that lens of affordability. You have one of the first items around energy, something I haven’t talked about yet, but which is a big issue in Connecticut really accelerated over the summer when the rates increase.

We hear a lot from businesses who are in Connecticut or thinking about locating to Connecticut. That energy is a really a barrier for them because our high growth industries, our manufacturing, bioscience, AI data centers, they’re big energy users. And so, the first pledge recommendation is there to get this a group of folks together, a cross functional group of folks together to develop a long-term energy plan for Connecticut that has a very transparent costs associated with it.

So, ratepayers can decide, is that the way we want to go? Do we want to move towards more sustainable green energy? Do we want to move towards more lower cost energy? And how are we going to get there over the next 10, 15 years? Because that’s what the state needs. So, energy is a big piece of the reimagined pledge.

Health insurance, as I mentioned, childcare, more affordable, accessible childcare, first time homebuyer tax credit, getting people the ability to save money and have employers matched at what they save. So, they could make it a little bit more affordable for their first time home. When someone buys their first time home, that frees up an apartment behind them.

So, someone can move into an apartment all around the lens of cost of living and affordability in Connecticut.

Brian Scott-Smith: Talk to us a little bit more about, these 73,000, open jobs, is it a case of, I know you said earlier that, businesses are working smarter, so therefore they don’t necessarily need as much of a workforce, but some of these jobs that are open, is it a case of they’re too difficult for people to get in, can you give us a bit of granularity on

What the situation is there with the 73,000 jobs?

Chris DiPentima: Yeah, I think what will surprise a lot of people, Brian, is more than half the 73,000 jobs do not require more than a high school degree or GED equivalent. More than half. So, a lot of times I think we think, all right, they’re highly skilled jobs. It needs a lot of degrees.

It’s very expensive to get into, and that’s not the case at all. When you strip down the 73,000 job openings, around 30,000 of them are in retail and restaurant. So very much front-line entry-level 1st job that could help someone really get their 1st apartment, help someone get their life going, if you will.

And as you said, with minimum wage going up, these are jobs are actually paying more than minimum wage because. Right now, no one’s paying minimum wage in Connecticut because they can’t hire anybody. So, they’re so desperate. They’re paying 20, 22, 23 an hour for a restaurant, a front-line retail worker. And then when you look at the other job openings, healthcare is a big one.

Over 3,000 licensed professional nurses job openings in Connecticut. Another job that does not require a two- or four-year degree. It just requires a credential, a community college credentialing to be an LPN. And then a lot of entry level technician jobs in the healthcare arena, there certainly are nurses and our doctors, our lawyers and our architects are in that 73,000 mix.

But as I said, more than half of the 73,000 job openings don’t require a two, four-year degree. And so, there’s jobs that people get into right away with just some basic level certification. And our surveying of businesses is that. The majority of their investment is going to go to retention and retacting employees.

And so, a lot of businesses are willing to pay those employees to get skilled up, to be able to take advantage of those jobs, and they’re going to give them the training on the job. And so, there’s a real low cost to entry to fill a lot of these 73,000 job openings.

Brian Scott-Smith: How do we get round that? There’s obviously no one solution to this, but you know, what are some of the answers maybe to try and get round this?

Chris DiPentima: . That’s the question, right? And there is no silver bullet because it goes back to that cost of living, and you can’t just lower income tax and all of a sudden Connecticut. It’s more affordable or you can’t just put in a child universal pre-K and solve the childcare issue and say, okay, Connecticut,

now more affordable and everyone’s going to move here because you have energy costs and health care costs and Housing costs and the other things that you and I talked about So it’s that package of solutions that have to go to affordability We need more bodies our labor participation rate those who live in Connecticut who are actually working is very high It’s one of the 15 highest in the country as we talk about wages are very high.

We’ve had Last year and the year before we were top five in the country and wage increases over four percent Wage increases each year. We’re top five in the country and medium wages paid in Connecticut. As you mentioned, the minimum wage has gone up. So, it’s not about paying people more. It’s about reducing the cost of living in Connecticut so that people realize they’re going to have more in their pocket at the end of the day.

So, it all goes to that, back to that package of affordability. And that’s what’s going to grow the population in Connecticut. Fill the job openings and finally unlock the tremendous economic potential that Connecticut has through an even more vibrant and growing economy. The states on good fiscal footing because of the fiscal guardrails and the budget surpluses we’ve had for the last six years.

We’re making some wise investments. We’ve got to go all in on affordability and cost of living.

Brian Scott-Smith: One of the things I do want to ask of you, because CBIA was very much involved in this, was the recent 119K Commission, where it looked at, these 119,000 disconnected youth. I know that CBIA were, front and center as part of that and all of the discussions.

How does this situation affect that because that called for the state to spend potentially a lot of money if they want to try and solve this problem, even over 10 years, it’s not going to get rid of the 119,000. How does this situation now impact that?

Chris DiPentima: Because that’s part of the pipeline.

That’s part of the youth that are already in the state. So, we don’t have to attract them to Connecticut who could help fill some of these 73,000 job openings 10,000. off track disconnected use every year, falling out of the system, if you will. Not only are they not helping fill the 73,000 job, They’re now going on state assistance, state subsidies, and that costs the state more money And that drives a need for more state revenue state tax revenue And so that’s why we’ve been intimately involved in the 119k commission the work that the Dalio education foundation did around this was tremendous And again, it’s no easy silver bullet like affordability.

We’ve got to look at every pipeline that’s out there for the past couple of years. We’ve been looking at Returning formerly incarcerated. How can we get them engaged in the workforce more easily? A couple of years ago, CBIA advocated, and we were successful in passing a bill that allowed people who are about to return from prison to get their CDL license.

We have over a thousand job openings requiring CDL license and those individuals coming out of prison could get a CDL. Now people are getting paid 80, 90, 100,000 starting salary if they have their CDL. So, imagine coming out, being formally incarcerated and being able to have a career like that. Same thing with the off-track disconnected youth.

How do we get some of these disconnected youth connected so they can get a job immediately upon graduation from high school? And that’s more career pathway programs in our public school system. For a long time in Connecticut, we relied on our technical school system, our community college system, but our public school system needs to be more than just SAT prep and college bound.

It needs to be college and career, and we need more career pathways. So, if I’m a ninth or 10th grader, I get an opportunity to study the basics of manufacturing or study the basics of finance or A. I. R. data science. So, when I graduated 12th grade, I could have a job ready for me, or I could go on the college, but I should have a choice.

And that’s how we’re going to keep more of these off track. Disconnected youth. connected so that they can fill these job openings. That’s a critical pipeline for Connecticut.

Brian Scott-Smith: Manufacturing has been pushed heavily for the last few years and obviously we’ve got like manufacturing pipelines. Eastern Connecticut in particular is really pushing hard.

We’ve got electric boats here, making the submarines, etc. Are we in danger though of becoming too narrow focus and so putting all our effort into one of these sort of like industries and then losing sight of something else. You mentioned earlier about retail and restaurants. They’re still saying they’re still hurting.

How do we resolve that problem? Make sure everybody gets a fair shake of the stick as it were.

Chris DiPentima: Yeah, I don’t think we’re in danger of being too focused. Manufacturing is going to be our largest industry sector over the next couple of years. It’s going to jump over finance and insurance sector and the manufacturing.

While the output has grown about 4 billion over the last year, the jobs are just around the same. 157,000 jobs. People working in manufacturing right now. So, despite all this effort, and as you said, Southeastern Connecticut has a beautiful model that we’re trying to replicate across Connecticut with.

The young manufacturing pipeline initiative and the manufacturing pipeline initiative and getting more of those initiatives in our public school system that still hasn’t increased the number of people working in manufacturing because we have so many retiring Connecticut has almost more than 25 percent of the people working in Connecticut right now are 55 years or older.

So, it’s not only the demand that we have to fill, we also have to backfill these retirements. We can focus on manufacturing while also focusing on health care. And I know in Southeast Connecticut, there’s going to be a similar pipeline program around healthcare while also encouraging people to get involved in retail and restaurant sectors.

Because we’ve got to fill all these jobs when it’s all said and done. When we had a growing economy, we had about 40,000 job openings, which is more normal for Connecticut. We have 1. 3 job openings for every one person looking. So even if everyone got a job today. who was looking, we’d still have more than 30,000 job openings in Connecticut.

We wouldn’t be able to fill them all.

Brian Scott-Smith: At the end of the day, the point to make is it’s not that people don’t want the jobs. It just goes back to this whole, can I actually afford to live in Connecticut based on whatever job it is that I’ve got?

Chris DiPentima: Absolutely. Yeah. Look at the surrounding state. What I don’t have for the ones that are growing their population. Can we grow that population, keep more people in the state? We’ll then fill these jobs, and we’ll grow the economy the way we can. And that’s what it comes down to. Let’s make the state more affordable.

Brian Scott-Smith: Chris Dipentima, President and CEO of the Connecticut Business and Industry Association, CBIA. Thanks as always for the interview.