Connecticut posted a job loss of 6,500 for the month May, and while half of it was attributed to Pratt & Whitney workers going on strike, it essentially wiped out an entire year’s worth of job gains leaving the state with only .1 percent more jobs than May of 2024, according to numbers from the Connecticut Department of Labor.

While manufacturing saw the biggest one-month job losses, largely due to the strike which has since ended, other economic sectors saw noticeable losses as well: notably, retail declined 1.3 percent during the month of May and was down 1.1 percent for the year. Overall, for an entire year, Connecticut only added a total of 1,800 jobs, or .1 percent, essentially leaving it static, while the rest of the country saw a job increase of 1.6 percent.

Connecticut’s unemployment rate ticked up by .7 percent over the past year to reach 3.8 percent but remained below national levels of 4.2 percent. State officials and business leaders say the wild swings highlight a volatile economy but also localized labor disruptions.

“One-time events, most significantly a labor dispute, contributed to May’s decline,” said Patrick Flaherty, director of the Office of Research at the CT DOL. “So far this year the employment picture has been mixed, consistent with an economy that is growing but growing slower than the rapid pace following the COVID lockdown.”

The Connecticut Business and Industry Association (CBIA) was a bit more skeptical in their view of the numbers, noting that Connecticut is losing jobs while simultaneously increasing the number of job openings.

“May’s 6,500 job decline shines a bright spotlight on the immense volatility in Connecticut’s jobs market,” said CBIA president and CEO Chris DiPentima in a press release. “Even if we ignore the 3,000 manufacturing workers who were on strike last month, we’ve erased the modest job gains we made last year despite openings increasing to 80,000—3.9 percent over the previous month.”

The CBIA, which has for years been calling for lawmakers to do more to address the lack of qualified job applicants in the state, particularly in the manufacturing industry, believes that Connecticut’s cost of living takes a significant toll on the state’s economy, but there has been little progress made in reducing those costs.

“The stark reality of this report and the wild swings in the jobs market this year make it clear that Connecticut’s labor market struggles are holding back our economic potential,” DePentima said. “Key factors driving Connecticut’s stagnant economy—such as the high cost of living—went unaddressed once again by policymakers during the legislative session.”

Connecticut is known for being a high-tax state, with a state income tax, some of the highest property taxes in the country, and taxes on transporting goods into the state by truck, but taxes alone are not the only factor driving up the cost of living. The cost of housing and electricity have been top of mind for both the public and political leadership in Connecticut, along with state-mandated changes to the relationship between labor and business.

The same day Connecticut’s stagnant job numbers were released, Gov. Ned Lamont announced he was vetoing two key pieces of legislation pushed through by the state’s majority Democrat party in the legislature, both of which could impact business concerns: Senate Bill 8 would have given striking workers – like those at Pratt & Whitney – access to unemployment benefits while they were on strike; the second would have pushed towns to create more housing, including affordable housing.

Gov. Lamont had quashed the striking workers bill last year under threat of a veto, but Democrat leaders in the state Senate sought to put it on his desk this year, where the governor followed through with his veto, saying he thought “paying striking workers is a bridge too far.”

“I think I’m pro-jobs and I want to watch out for any bill which discourages jobs in this state,” Lamont said during a press conference. “For the first time in decades, we’re actually growing jobs in this state and growing out manufacturing base in particular, which are very good paying jobs. I don’t want to do anything to jeopardize that.”

The striking workers bill had been opposed by both the CBIA and General Assembly Republicans who said it was “a troubling reflection of Connecticut’s hostile business climate,” according to a press release from House Republican Leader Vincent Candelora, R-North Branford, and Rep. Steven Weir, R-Enfield. The push to give unemployment benefits to striking workers came on the heels of a number of other pro-union laws passed in recent years, including a ban on so-called “captive audience” meetings between business owners and their employees that the CBIA vigorously opposed to the point of filing a federal lawsuit against the state.

Lamont also vetoed a controversial housing bill that has been fought over for roughly five years in the General Assembly as pro-home advocates push to override certain local zoning powers, and municipalities and some advocacy groups pushed back against what they deemed as a state takeover of local government. Lamont’s veto of House Bill 5002 sparked both disappointment and praise from various groups, with Lamont saying he wants the municipalities to come to the table to figure out the best way forward for everyone.

A study released in May by the CBIA, however, found Connecticut’s “long-term underproduction of housing constrains its economic potential,” and that the state has not recovered from the 2008-2009 economic recession, which saw the collapse of the housing market nationally. Meanwhile, the cost and price of housing have surged upward, making affordability difficult.

“Research demonstrates that housing constraints reduce labor mobility, create workforce mismatches, impair business competitiveness, and ultimately constrain economic growth,” the study by Dustin Nord, director of the CBIA Foundation, said. “Connecticut’s regulatory environment, particularly its prevalence of large-lot zoning requirements and complex approval processes, significantly dampens housing supply elasticity – the market’s ability to respond to price signals with increased production.”

Added into the high cost of living in Connecticut is the cost of energy, with the state having some of the highest electricity costs in the nation, even amongst its neighbors, and greatly impacts businesses that use massive amounts of electricity, as well as driving up the overall cost of living for state residents. Much of the problem can be attributed to Connecticut’s limited supply of energy, much of which must be brought in from other states, combined with its ever-growing public benefits charge, which is essentially a $1 billion per year tax to fund state mandated energy programs.

While legislation was passed this year to modestly lower the public benefits charge, the energy debate was marred by a legal and political circus surrounding Connecticut’s two major utility companies, the Public Utilities Regulatory Authority, its controversial chairwoman Marissa Gillett, and the two chairs of the legislature’s Energy and Technology Committee.

On a better note, however, the DOL jobs report indicated that Connecticut’s private sector earnings have increased 3.8 percent over the past year, keeping pace with national growth, and are, in fact, 4.5 percent higher than the national average. Connecticut remains one of the states with the highest median incomes in the nation, although it has dropped farther down the list in recent years, with Massachusetts now having the top spot, according to the U.S. Census Bureau.

DePentima said that lawmakers should continue to focus on making the state more affordable and more business friendly to fill in the needed job openings, grow the economy, and attract more people to the state.

“Despite session ending, it’s critical that public and private sector leaders work closely and identify creative, sustainable solutions for making this a more affordable and attractive place to live, work, and do business,” DiPentima said.

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