In the past few years, the growth of the state’s labor force has been slowed significantly by decreases among “prime-age” individuals between 25 and 54, and women, who are disproportionately responsible for care-giving, according to the report from the Some of the most effective remedies would be those that support greater wage fairness, which encompasses increasing wage growth, reducing wage inequality and narrowing gaps along gender, racial and ethnic lines, said CT Voices officials.
In the past few years, the growth of the state’s labor force has been slowed significantly by decreases among “prime-age” individuals between 25 and 54, and women, who are disproportionately responsible for care-giving, according to the report from the New Haven-based group. It asserts that those trends have made it more difficult to fill open jobs, constricted Connecticut’s ability to reduce long-term debt and provide essential support to families and children, and hampered the state’s overall economic recovery.
“To reverse these trends and in turn support stronger job growth and broader economic growth, it’s necessary for Connecticut to become a more affordable and accommodating place for families to live and work,” said Patrick O’Brien, CT Voices Policy and Research director, said during an online press briefing on Tuesday afternoon. “That certainly requires addressing major expenses such as housing and child care…. However, it also requires increasing wages and improving work flexibility to strengthen the financial return to work and make it easier to balance paid employment with caregiving.”
Fewer jobs, high cost of living
Connecticut’s high cost of living has become more acute as a result of the post-pandemic spike in inflation, but its economic travails are longstanding. While the state has recovered all the jobs it lost at the beginning of the pandemic, it still has fewer payroll jobs than it did at its all-time peak in March 2008.
The state is only a few thousand positions away from surpassing the March 2008 benchmark, but its jobs growth remains plodding. Between June 2024 and June 2025, its number of payroll positions increased only 0.5%, compared with a national uptick of 1.1%, according to state Department of Labor data.
Connecticut remains one of the wealthiest states on a per-capita basis, but many workers are struggling.
“Although low-wage workers in Connecticut earned more per hour than their national counterparts, high-wage workers in the state earned even more, resulting in greater wage inequality,” O’Brien said. “Holding other factors constant, Connecticut’s greater wage inequality, largely driven by higher wages at the top of the distribution, inflates local prices for essential services such as housing and child care, making it harder for low- and middle-wage workers to afford living and raising a family in the state.”
O’Brien also noted the impact of significant gender, racial and ethnic wage gaps. They reflect disparities in wage factors including education, usual hours worked and occupation, according to the report.
“In all three cases here, we see that the unadjusted wage gap is substantial and larger in Connecticut than in the U.S., making it even more difficult for women, Black workers and Hispanic workers to afford living and raising families in the state,” O’Brien said.
Recommendations, warning signs
The report includes a number of a recommendations, including one to “index” the state’s personal-income tax to inflation — i.e., by annually adjusting its “core components,” which are the personal exemption, tax brackets and personal credit.
Related, the report recommends that the state Department of Revenue Services hire more tax auditors. It asserts that such an initiative would reduce the underreporting of non-wage income and could pay for indexing the personal-income tax to inflation without requiring any increase in tax rates.
“Without inflation indexing, low- and middle-wage workers in particular pay a higher percentage of their income in the Connecticut personal-income tax each year,” O’Brien said. “That adds to the already higher tax burden on wages and offsets in part the benefits of policies that provide support to workers.”
Other recommendations in the report include limiting the use of non-compete agreements, increasing the salary threshold for overtime-pay protections and establishing predictable scheduling protections for hourly workers.
Among other points made in the briefing, CT Voices officials expressed concerns about the impact of some of the key changes made recently at the federal level, including the massive package of tax and spending cuts passed by Congress at the beginning of this month.
“Excessive tariffs and a mass-deportation agenda continue to roll out, and we’re starting to see early adverse economic signs…. As the changes to Medicaid, SNAP and higher education from the Congressional mega-bill start trickling down, and life becomes less affordable as a result, a number of residents will be impacted, especially low- and middle-income families,” said CT Voices Executive Director Emily Byrne. “So the state will not only need to determine how to minimize harm and increase affordability for residents, it will need to do even more to promote economic growth in Connecticut.”
