"We are coming back inch-by-inch as opposed to yard-by-yard," Klepper-Smith said.
A Long Wait
Looking ahead to 2013, we are expected to lag even perennially ailing Rhode Island, with a gain of just 5,600 jobs, or 0.3 percent, according to a forecast by Deak released Wednesday by the New England Economic Partnership.
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"Why are we doing so much more poorly than, say, Massachusetts? Here you've got two states founded at the same time with the same kind of cultural background," Perna said. "One of them is outperforming the economy and the other is underperforming."
Massachusetts, with a huge university economy and federal research money, was shielded to some extent from the recession, Perna said, and that could still be having an effect.
As for Connecticut, in addition to federal taxes and spending cuts, the state's own fiscal crisis will demand higher taxes, cuts in state spending or both; and our housing recovery is also lagging.
Connecticut's high state debt and large, unfunded pension liability and high debt is hurting business confidence, Klepper-Smith said. That's a matter of dispute, as the state is No. 23 in per-capita debt when state and local governments are both included, the governor's budget chief said. As for pension liability, ironically it is more of a factor now that Gov. Dannel P. Malloy is dealing with it directly rather than letting it fester, because it's costing real money to fix.
Deak pointed out yet other problems for 2013, including the graying of the workforce and hits to the stock market caused by fiscal tightening. Add to that the fears that more aerospace jobs might move to the South — as we saw when United Technologies Corp. acquired Goodrich and moved merged Hamilton Sundstrand into a new business headquartered in Charlotte — and it's a wonder the numbers are looking positive at all for next year.
A more stable Europe and the post-Sandy recovery are pluses for 2013. "Already money is flowing into the region, federal and insurance, and so that's going to help the state,' Deak said.
There are reasons for Connecticut to be hopeful in 2014. That's reflected in Deak's New England Economic Partnership forecast, showing a gain of 1.4 percent, or 22,500 jobs in the year that starts in less than 13 months — the same percentage as our neighbor to the north, finally. The U.S. forecast for that year is a hefty 2.2 percent rise, according to Moody's Analytics.
Even in that good year, Connecticut's fundamental problems temper the optimism. Moody's prepared a baseline, which showed Connecticut's expected job gains based on how the nation will fare. And Deak, using specific factors in Connecticut, pulled the projected gains back by 7,000 jobs in 2013 and 6,000 jobs in 2014.
By 2014 — a re-election year for Malloy if he chooses to run — we could see some investments paying off. At Pratt & Whitney, production of the next-generation engines for both the military and commercial markets ramps up. In Farmington, we'll see real gains from the expansion of biotech research. Downstate, Connecticut's TV and film industry could reach critical mass thanks to state tax credits.
For the 171,000 people who remain out of work, that's a long wait.