Corporate Welfare, Malloy, Taxes, Unemployment Malloy, Taxes, Unemployment
Governor Malloy calls on Federal Government to pay unemployment benefits for Sikorsky shutdown adding its “unacceptable that Connecticut taxpayers be made to pay for the failures of Republicans in Washington.”
It is unacceptable for Connecticut taxpayers to be paying for the failure of Republicans in Washington, but the Sikorsky situation isn’t the right example. And don’t get me wrong, I want to blame the Republicans for absolutely everything too.
However, as Governor Malloy reveals in this situation, losing contact with the truth undermines the effectiveness of one’s rhetoric;
According to a blog post written by Stamford Advocate and Hearst Newspaper Group reporter, Brian Lockhart, “Democratic Gov. Dannel Malloy Friday said he wants the federal government to fully reimburse Connecticut and all states for the cost of unemployment benefits and administering those benefits to workers impacted by the government shutdown.”
Lockhart writes that, “In Connecticut Malloy was referring specifically to Sikorsky Aircraft in Stratford, which Wednesday announced will furlough about 2,000 workers, effective Monday.
The company said the inability of Congress and the White House to reach a federal budget agreement and end the government shutdown has severely hampered its ability to manufacture and support helicopters used by the military.”
Lockhart quotes Malloy as saying, “These workers and many more throughout Connecticut are out of work because House Republicans insist on playing childish political games. Families are suffering, and it’s unacceptable…As many of these workers begin applying for unemployment benefits, it’s also unacceptable that Connecticut taxpayers be made to pay for the failures of Republicans in Washington.”
Three cheers for the condemnation of the Congressional House Republicans.
Right on about the fact that it is unacceptable that families are suffering as a result of the idiotic political maneuvers of the Congressional House Republicans.
But Malloy’s statement about Connecticut taxpayers picking up the tab for the unemployment benefits is exactly the reason so many small business people think many Democrats simply don’t understand what owning a small business is all about.
Having paid my share of unemployment taxes for my employees let me take a shot at explaining to Governor Malloy how things work when it comes to unemployment taxes.
Unemployed workers are paid benefits from a fund that is paid for by businesses, not directly by state government and its taxpayers.
Employers pay federal and state unemployment taxes. These funds are used to pay for the operation of the unemployment system and the benefits that go out to unemployed workers.
The amount of unemployment tax a Connecticut business pays depends on the number of employees they have and the company’s history of creating unemployed workers. A business is charged a base rate, but if it lays off workers due to a lack of business, that unemployment tax rate increases.
With Connecticut’s unemployment rate stuck at about 9 percent for so long, Connecticut’s unemployment fund, like those in most states, run out of money and the states had to borrow money from the federal government to meet their obligations when it came to paying unemployment benefits.
The Great Recession was so bad that as of two and half years ago, more than 30 states, Connecticut included, had already borrowed more than $41 billion from the federal government.
That money must be paid back, with interest, and the way it is paid back is by charging businesses a higher federal unemployment tax. Experts have reported that even at the higher rate, it may take Connecticut more than a decade to pay back the money that Connecticut has already been borrowed.
That isn’t to say we shouldn’t be upset about the Republicans and their antics, but the money for unemployment benefits that are resulting for their stupidity is actually being paid for by Connecticut’s businesses that are already burdened with trying to pay back the money Connecticut had to borrow to pay for unemployment benefits over the last few years.
If the governor wants to lobby the federal government to help Connecticut’s businesses he should be demanding that the President and Congress do something to reduce the burden for those states that had to borrow billions.
Small businesses are the foundation of Connecticut’s economy. Governor Malloy has spent hundreds of millions on corporate welfare to “persuade” successful businesses to add a few hundred jobs in Connecticut. Instead of wasting money on those big ticket items, state government should be focusing in on ways to help small business succeed.
The unemployment tax issue is a perfect example and that problem isn’t resolved by demanding that the federal government pay for Sikorsky’s unemployment benefits for the next few weeks.
Corporate Welfare, Economic Development, Economy, Malloy, Unemployment Corporate Welfare, Economic Development, Economy, Malloy, Unemployment
As the blind man led the deaf man toward to edge of the precipice he was heard to utter….”things are looking up, we are almost there…”
Those words and that image could certainly be used to describe Governor Malloy’s approach to the Connecticut economy and his so-called economic development strategy of giving away hundreds of millions in taxpayer funds to successful multi-million dollar corporations.
“You can’t name a recent governor who’s had net job growth…I’m the one — no others.”
That is what Governor Malloy told listeners during a recent appearance on the Connecticut Public Radios show “Where We Live.”
But of course, the Governor’s statement wasn’t true.
And when informed of that, Malloy’s PR operation spun into high gear releasing a statement “clarifying” what the Governor meant when he uttered his inaccurate assessment of the truth. Malloy’s spokesman said;
“The Governor was referring to a fact that everyone in this state knows — that our economy had been stagnant for decades. We failed to invest in the industries that were poised to grow, and instead careened from one project to the next without any real cogent strategy. That can no longer be said about Connecticut’s economic development strategy.”
The Governor’s political two-stepping is the manifestation of the Malloy administration’s failed economic development strategies and his attempt to convince voters that the real world isn’t actually real.
The single greatest indication of the Governor’s utter detachment from the real world can be found in his response to the news that although the number of jobs in Connecticut increased in the month of July, Connecticut’s unemployment rate actually rose from 8 percent to 8.1 percent.
To that Malloy explained, “People are sensing that it’s easier to get a job.”
“It’s easier to get a job…” ?
Now that was certainly a Wait, What? moment!
As Malloy spends his time trying to count the number of angels that can fit on the top of a pin, tens of thousands of Connecticut residents feel the crushing pressure of Connecticut failing economic development strategy.
An August 2013 report from Connecticut Voices for Children, the non-partisan research group paints a grim picture of the state of the state when it comes to the Connecticut economy and especially “The State of Working Connecticut 2013: Young People in the Workforce.”
Governor Malloy and his administration would do well to study the report in detail.
CT Voices reports;
- Youth unemployment has dramatically increased in Connecticut over the last decade and is more than twice the rate for older workers.
- The unemployment rate for Connecticut’s young workers (age 16 to 24) is at about 17.1 percent, which is more than double the rate for 25 to 54 year olds (7.4 percent) and almost triple the rate for workers 55 and older (6.4 percent).
- Connecticut’s youth unemployment rate is higher than the United States average (16.2 percent).
Fewer people are looking for work because there is no work to be found;
- A smaller share of the working age population is working or looking for work. (The labor force participation rate is the share of the working age population that is working or looking for work.)
- The rate for all Connecticut workers fell from 68.8 percent in 2007 to 66.2 percent in 2012. The largest decline in participation is among the state’s youngest workers: the rate among 16 to 24 year olds in Connecticut declined over this period from 62.0 percent to 54.5 percent.
Long-term unemployment has reached crisis and historic levels:
- Long-term unemployment — the share of the unemployed who have been out of work for more than 26 weeks — was second highest in Connecticut among all states. Among Connecticut’s unemployed youth, one-third (33.6 percent) have been out of work for more than 26 weeks, above the national rate of 27.7 percent.
- And long-term unemployment is hurting older workers even more. In 2012, long-term unemployment in Connecticut for those age 55 and older, at 61.5 percent, was the highest rate for that age group among all 50 states.
Connecticut’s minority workers are disproportionately hurt by Connecticut’s economy.
- Connecticut’s Black and Hispanic workers face high unemployment and low wages. In 2012, Black unemployment (13.4 percent) and Hispanic unemployment (15.7 percent) were about double the White unemployment rate (7.0 percent).
- On average, Hispanics earned 55 cents and Blacks earned 72 cents for every dollar earned by Whites.
And Malloy’s corporate welfare program of giving out hundreds of millions to successful corporations will not create the breadth of jobs Connecticut needs.
As the CT Voices report explains, “While Connecticut has added jobs in the recent past; these jobs are among the state’s lowest-paid sectors. Connecticut added 15,655 jobs between 2011 and 2012. However, the majority of these jobs (10,050) were added in the lower-wage job sectors.”
Connecticut’s economic problems go much, much deeper than a governor who can’t seem to tell the truth about the state of the state’s economy.
Just ask the deaf man who is being led toward the cliff by the man who is blind.
You can find all this data and the rest of the CT Voices report at: http://www.ctvoices.org/sites/default/files/econ13sowctes.pdf and http://www.ctvoices.org/sites/default/files/econ13sowctfull.pdf
Malloy, Mass Insight company, Stefan Pryor Malloy, Mass Insight Company, Stefan Pryor, Unemployment
Despite a FOI request to do so, the Connecticut State Department of Education has failed to turn over their contract with Mass Insight, an education reform company that was hired to provide services to Connecticut communities struggling to meet the mandates under Governor Malloy’s “Education Reform” law.
While more will be known once the contract is finally released, what is known is that despite the professional talent left in Connecticut’s State Department of Education and the outstanding work that was being done by Connecticut’s Regional Service Centers (RESCs), Commissioner of Education, Stefan Pryor, saw fit to turn his back on Connecticut’s existing expertise and hire an out-of-state “education reform” company to provide consultants to help Connecticut’s poorest towns get access to the funds provided in the new Commissioner’s Network program.
The cost of this arrogant decision is not only the fact that hundreds of thousands of taxpayer dollars will be flowing out-of-state, but at least two of the Regional Service Centers have already been forced to lay off staff who had been working with these school districts before Commissioner Pryor decided to give the work to Mass Insight.
The other reality is that Alliance Districts, and especially those working with the Commissioner’s Network Program are being forced to work with people who have little to no experience with Connecticut and our schools. Instead, they are products of a “reform” mindset that fails to take into account the complex challenges that face our poorest communities.
Prior to Pryor’s decision, the State Department of Education and the Regional Service Centers were providing Alliance Districts with technical support staff who had direct experience with these communities they were sent in to help.
Now, however, a band of “true believers” are being brought in to tell local, democratically-elected officials, local school administrators, teachers and parents what they must do to gain the Commissioner’s approval so their districts can access a paltry sum of additional state taxpayer funds to help balance their local budgets.
Since the State Department of Education hasn’t released the contract, despite their requirement to do just that under Connecticut’s Freedom of Information Law, it is hard to determine who exactly Mass Insight has sent to Connecticut to staff this lucrative contract.
As best as we can tell, leading the Mass Insight Team is Senior Program Manager, Ron Sandlin, who recently joined Mass Insight after serving as the School Turnaround Manager at the Indiana Department of Education. With a BA in Political Science and an MA in Teaching, he apparently only has three years of teaching experience. Interestingly, Paul Vallas’, The Vallas Group signed a multi-million dollar contract in Indiana last year.
The Mass Insight Program Manager for the new contract appears to be MaryAnn Holland, who “supports district-level fieldwork.” Before joining Mass Insight, Holland served as College Office Director at Achievement First’s Amistad High School in New Haven; she has a B.A. from Colorado College and will be getting an M.A. this summer in Organizational Leadership from Columbia University. She did two years of teaching with TFA and one year with Achievement First, Inc.
Michelle Arader is a Project Coordinator with the Mass Insight School Turnaround Group in Connecticut. She also works with or worked on the contract Mass Insight has with the Providence Public School District. Before that she worked for Uncommon Schools, a charter school management company that provided “enrichment program and supporting operations” at Brownsville Collegiate Charter School in Brooklyn, NY. Arader has a B.A. from Princeton University. She apparently has no teaching experience.
Dipa Desai is also a Project Coordinator, having worked with Mass Insight’s Rhode Island operation including a contract the company has in Central Falls. Prior to joining Mass Insight she served as a Guidance intern at the Classical High School in Providence, RI and a Research Assistant at Hasbro Children’s Hospital. Desai recently finished her M.Ed. in School Counseling from Providence College. She appears to have no teaching experience.
Emily Pallin serves as the Mass Insight Engagement Manager. She is also being shifted from the Mass Insight contract with the Providence Public School District. Prior to joining Mass Insight she was a research associate at New Visions for Public Schools, a corporate reform consulting organization that supports turnaround services in New York City. Pallin received a B.A. in public policy from Hamilton College and an M.P.A. at NYU’s Graduate School of Public Service. She appears to have no teaching experience.
Faced with the task of helping to develop real and lasting solutions for Connecticut’s schools, rather than use Connecticut’s home-grown talent and expertise, Malloy’s Commissioner of Education turned to a corporate entity that is based outside of Connecticut. With our districts being asked to rely on people with little to no teaching or real school administrative experience, Connecticut residents who do have that expertise are losing their jobs and joining the unemployment line.
Despite all this, the response from Malloy and the General Assembly’s Education Committee is nothing but silence.
Connecticut State Government, Economic Development, Economy, Layoffs, Malloy Corporate Welfare, Malloy, The Economy, Unemployment
The latest data from the Connecticut Department of Labor reveals that the state is making little progress when it comes to re-bounding from the Great Recession.
According to the more conservative unemployment measurement, 171,100 Connecticut residents are presently unemployed. However, using the federal government’s U-6 rate, which measures both the unemployed and those who are in a part-time job but actively looking for full-time employment, more than 15% of Connecticut’s workforce is without the jobs they need.
In addition, of the 117,500 jobs lost since the “recessionary downturn” began, Connecticut has only recovered about 30,000 jobs (25% of all jobs lost).
Despite the claim that the recovery began in February 2010, Connecticut’s government, financial, construction and manufacturing sectors have yet to even begin regaining jobs.
Still on the downside, Connecticut’s government sector remains down 11,100 jobs, while the number in the financial sector is down 4,200 positions, construction and mining is down 1,200 jobs and manufacturing is down 800 jobs.
Since much of the federal Stimulus Funds were not used to supplement government activity, but instead were used to substitute for existing spending, elected officials have failed to help those who lost their jobs in two of the sectors that leaders could actually have had an impact over – government and construction.
Since Governor Malloy took office, government positions have been further eliminated and despite his predilection for the Financial Sector, his First Five Corporate Welfare Program has yet to have any impact. Although considering those favored business need only create 200 jobs, and have five to ten years to do so, whatever impact the corporate welfare program does have will be limited in nature.
A related problem for Connecticut businesses is that as a result of the lengthy recession, the State of Connecticut has already borrowed more than $635 million from the Federal Government to help pay unemployment benefits. Borrowing was necessary because the amount of funds collected from employee unemployment taxes wasn’t enough to cover the costs associated with payments to the unemployed. Since these funds will need to be paid back, Connecticut businesses will be facing high unemployment taxes on an ongoing basis.
Budget Cuts, Economy, Education Reform, Layoffs, Malloy Budget cuts, Malloy, President Obama, Unemployment
On Thursday, Connecticut’s Department of Labor released their monthly report on the state of the economy. The data revealed that the percent of unemployed had risen from 8.1 percent in June to 8.5 percent in July. In response, Governor Malloy said he was “skeptical” of the report’s accuracy.
Meanwhile, on Friday, the Obama Administration released a report showing that at least 300,000 teaching jobs have been lost in the last three years. Obama called for new investment in education spending.
The nation’s “official” unemployment rate stands at about 8.3 percent. That means that the true unemployment rate in the United States is at least 15 percent.
Although the media traditionally reports on what is called the “U-3” unemployment rate, a far better measure is one called the “U-6” rate. The “U-6” unemployment rate, which is released at the same time as the lower number, includes the traditional definition of the “unemployed,” but also adds-in those people who are employed in part-time jobs, despite the fact that they are actively looking for full-time work.
While having a part-time job helps some families make ends meet, an honest definition of being unemployed must include those who can’t find the full-time job they need and, instead, are forced to fall back on some type of part-time employment.
Since Connecticut’s numbers are similar to the national numbers, we can safely assume that at least 15% of Connecticut residents continue to find themselves without the work they want and need.
If the truth be told, the notion that the “official” unemployment rate is 8.1 percent or 8.5 percent is, quite frankly, irrelevant.
The very real impact federal, state and local budget cuts have on the economy and our education system becomes clear when we understand that since President Obama took office, the number of Connecticut residents employed in federal, state and local government jobs has dropped from 251,200 to 235,000.
This means that in just the last four years, there are 16,000 few jobs in schools and other government positions around the state.
Of that number, the overwhelming majority, 10,000 jobs, have been lost just since Malloy became Connecticut’s governor.
Last month, President Obama said, “think about what that means for our country. At a time when the rest of the world is racing to out-educate America, these cuts force our kids into crowded classrooms, cancel programs for preschoolers and kindergarteners, and shorten the school week and the school year. That’s the opposite of what we should be doing as a country.”
Today, the President used his weekly address to talk about the loss of teaching jobs, while reiterating his pledge to invest an additional $25 billion to prevent layoffs and strengthen public education around the country.
The sad truth is that regardless of whether the President is calling for more of an investment in education or the Governor is skeptical that the unemployment is going up when “feels” it should be going down, the fact is, Connecticut’s children are returning to school in a couple of weeks with far few teachers and support staff.
That is bad news for unemployed teachers, our children and our entire society.
Economic Development, Malloy Economic Development, Malloy, Unemployment
(Cross-posted from Pelto’s Point at the New Haven Advocate)
Connecticut’s next monthly unemployment report will be coming out in a couple of weeks but last month’s report revealed that the state’s official unemployment rate remained at 9.1%.
Connecticut lost 4,100 jobs in June after losing 5,500 the month before.
According to the State’s Department of Labor most of the job loss was in the government sector and private sector jobs have been growing much slower than last year.
From January till June 2011, Connecticut’s economy added 1,800 private sector jobs compared to an increase of 14,100 jobs for the same period in 2010.
While the statewide rate was 9.1%, Connecticut’s urban centers and poorer rural communities are being especially hard hit.
The unemployment rate; Hartford (16.4%), Waterbury (14.5%), Bridgeport (14.3%), New Haven (13.8%), New Britain (13.2%), East Hartford (12.2%), New London (12.4%) and Windham (12.3%).
The official unemployment rate is based on people who have been looking for work in the past month. It does not count underemployed workers or those who have given up trying to find work.
The United States Bureau of Labor Statistics created a new unemployment measure in 1995 – called the U-6 rate – that attempts to better measure the real unemployment rate.
Connecticut’s official unemployment rate of 9.1% translates to a U-6 unemployment rate of 16.6%.
This means the real unemployment rate in Hartford is over 30% with the percent of truly unemployed is greater than one in four in Waterbury and Bridgeport.
Some experts say that even the U-6 unemployment rate underestimates the true number of people who want to work but can’t find employment.
The Malloy Administration’s primary economic development tool appears to be the First Five Program that provides significant corporate subsidies for selected companies that promise to create at least 250 new jobs. Cigna, TicketNetwork and ESPN have been the first recipients of these tax-payer funds. These companies have an extended period of time before these jobs must be created.
Sadly, even if these companies were to create the “required” jobs immediately it wouldn’t meet the number of employees laid off in just the last month.
As a result of the Malloy Administration’s recent state employee layoffs, at least 600 more Connecticut families now have at least one wage earner who is out of work.
Meanwhile the First Five Program does not seem to include a policy to direct some of those new jobs to Connecticut’s hardest hit communities.