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Packing Bags For Good

February 4, 2007
By MICHAEL REGAN, Courant Staff Writer

After achieving near-equilibrium early in this decade, Connecticut is once again losing thousands of residents to other states each year.

Almost 17,000 more people left for other parts of the U.S. than moved into the state between 2005 and 2006, according to the latest Census estimate.

An influx of about 14,300 new residents from Puerto Rico and foreign countries was largely responsible for keeping Connecticut from losing population altogether, as also happened in the early 1990s.

The Census Bureau estimates that Connecticut's population of 3.5 million grew by 4,108 in the fiscal year that ended on June 30, 2006. State officials say the federal estimate understates the birthrate and put the increase at more than 9,000. Both figures represent a continuing decline from annual growth estimates in the mid-20,000 range from 2000 to 2003.

"The 2006 number was a confirmation of a significant trend," West Hartford economist Ron Van Winkle said. "We may not see significant growth in jobs or population in the state of Connecticut for the foreseeable future."

"Connecticut's been a slow-growth population state for decades," said Fairfield University economics professor Edward Deak, "and I don't think that's going to change."

The Census estimate doesn't track the source or destination of people coming and going, but data compiled by the Internal Revenue Service indicate that the largest share of the people leaving Connecticut - about 40 percent - head for the South. The next most common destination is another state in the Northeast, followed by the West and Midwest.

Two age groups appear to be most severely affected by the declining population growth: younger adults in their late 20s and 30s, and older people in their late 60s and 70s. Both groups actually dropped in number during the first half of the 2000s.

Deak said that for workers in their prime earnings years - 35 to 55 or 60 - Connecticut's high cost of living is offset by the availability of well-paying jobs, particularly in the financial and scientific areas.

"At the other two ends, as people retire they tend to leave the state, and as young people graduate from college they find more attractive opportunities for entry-level positions elsewhere," he said.

The decline in the younger group is also due in part to what Van Winkle called "a demographic wave" resulting from a drop in the birthrate nationwide through the 1970s. It produced similar reductions in the number of 20-somethings during the first half of the '90s and in teens a decade before that.

"That demographic wave was deeper in Connecticut than it was in the rest of the country," Van Winkle said.

But he and other economists believe that many Connecticut-born or Connecticut-educated young adults are moving out of the state to places with lower living costs and more robust economies, leaving the state facing a shortage of educated workers.

Economist Stephen Coelen, co-author of a report released last year looking at New England's workforce in 2020, says Connecticut and most of the rest of New England will probably see the total working-age population decline in coming years. In addition, fewer young people entering the workforce will have four-year college degrees, he said.

"The situation for Connecticut and the whole Northeast is fairly dire," Coelen said. He said the best chance of countering that trend is to develop policies that encourage young people drawn to the region's college and universities to stay here after graduation.

Coelen's "New England 2020" report was a sequel to a 1993 study in which he raised concerns about a shortage of well-educated workers in this decade, and state business leaders say the fear was well-founded.

In surveys of its members, the Connecticut Business and Industry Association has seen repeated complaints about the difficulty of hiring qualified workers, said CBIA economist Peter Gioia. Most telling, he said, was a survey released in September in which 40 percent of employers who said they had been unable to fill a full-time position cited the lack of qualified workers as the reason. In response to a similar question a year before, only 13 percent gave that answer.

"Everybody's expecting that sooner or later we're going to hit the wall in terms of availability of qualified workers. What our surveys are beginning to show is we may have hit the wall," Gioia said. "That means what was a problem is probably a crisis, and it has potential for severe constraint on our growth."

In addition to the 10,600 new jobs the state Department of Labor says were created in 2006, Gioia said, employers need to fill an equal number of new jobs that don't show up in the official tally and about 50,000 existing jobs opened up by retirement and other departures. The loss of workers to retirement is a particular problem in an aging state like Connecticut, he said.

It is that retirement-age population that comprises the other major group to decline in numbers in the first half of the decade. The number of people 65 to 70 fell more than 4 percent between 2000 and 2005, according to the Census estimate; the drop in numbers over 70 was even steeper.

That may help explain why the South - and Florida in particular - was the most popular destination for people who left the state between 2004 and 2005, according to IRS data. Far fewer people moved to other hot economy areas in the West, the data indicate.

"We're seeing people who have worked their whole lives in Connecticut and earned a lot of money taking their pension plans and their savings" to the South, Van Winkle said, "which is not good for Connecticut."