Role In Hartford Job Losses Shows Connecticut Needs A Clear Policy
To Foster And Preserve Employment
July 17, 2005
By Eddie A. Perez | Mayor of Hartford
For the first time in many years, Connecticut's unemployment
rate is higher than the national average. Economists at the Federal
Deposit Insurance Corp. have awarded the state the dubious distinction
of leading the nation in employment stagnation.
Though there are many economic forces beyond the influence of state government,
Connecticut is compounding its unemployment problems by pursuing a flawed
economic policy. This policy has recently sanctioned the elimination of 580
jobs at a healthy insurance company and the use of millions of your tax dollars
to move 2,000 insurance jobs from one town to another.
This not only defies common sense, it requires a fundamental reassessment
in thinking if we are to beat the economic development teams from other states
that work every day to steal Connecticut's high-paying jobs.
In the past few weeks, Hartford has experienced two dramatic examples of
the state's schizophrenic approach to employment:
On June 29, state Economic Development Commissioner James Abromaitis, with
the governor's support, tried to slip a last-minute provision past the state
legislature providing millions of tax dollars to move ING and its 2,000 insurance
jobs from Hartford to a neighboring town. ING had already identified a suitable
site in Hartford to build a new facility and keep valuable jobs in the city.
But the state refused to partner with the city to resolve ING's need for
The Department of Economic and Community
Development negotiates deals in secret with the corporations it considers "clients." This
policy puts towns in the dark about incentives being offered and pits one
community against another.
On June 30, Insurance Commissioner Susan
Cogswell approved the elimination of 580 Hartford-based insurance jobs
as part of the $11.5 billion sale of Travelers Life & Annuity to MetLife
- even though a study commissioned by the city of Hartford found that these
job cuts will cost the state $1.7 billion in economic damage over 10 years.
In this unusual transaction, the commissioner agreed to significant job
elimination before a public hearing could be held on the matter, and required
a commitment of only one year on the remaining jobs. This new standard
for merger approval guarantees future mega-deals will strip Connecticut
of its highly skilled insurance workforce.
The ING and MetLife examples show that this administration is ill-prepared
to tackle the complex task of negotiating with sophisticated financial services
companies to not only attract but also maintain jobs in our state. Who can
blame MetLife or ING for simply seeking the best deal? However, state government
must be willing to articulate a clear economic vision for job growth and
judiciously use our regulatory power and incentives to reverse this job drain.
In the insurance and financial services sector, there are a number of steps
that can be taken immediately to attract and maintain Connecticut jobs:
Appoint an advocate to coordinate the state's effort to attract and retain
insurance jobs. This office, promised by the governor more than two months
ago, should leverage government authority with industry know-how to aggressively
pursue opportunities for our state.
Cut the red tape on approving new insurance products. Innovation in the
insurance industry drives profit and creates jobs. Popular products that
insurers sell in other states can take months or years to be approved in
Put tax incentives in line with state development goals. Incentives should
create jobs and grow businesses, not just pad corporate bottom lines.
Consider job losses and gains in merger approvals. The economic impact of
job losses should be part of any insurance merger proceeding.
With a significant change in the economic policy for Connecticut, we can
recapture our place as an employment leader.
Eddie A. Perez is mayor of Hartford.
Reprinted with permission of the Hartford Courant.
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