This week marks two years since Gov. Ned Lamont ordered schools to close and then a few days later, he did the same for all non-essential businesses.
The state slowly started reopening in May of 2020, but we know there have been setbacks along the way with the Omicron and Delta variants.
Now, we seem to be headed in the right direction once again.
NBC Connecticut's Mike Hydeck spoke with Connecticut's Commissioner of Economic and Community Development, David Lehman, about how things are comparing now to the height of the pandemic.
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Mike Hydeck: "So small businesses, as we know, were hit hard during the height of the pandemic, somewhere in the neighborhood of 600 restaurants closed. Other in-person service jobs, like salons and gyms and bars and restaurants struggled to stay open. What percentage of the small businesses are back now? Do you have an idea?"
David Lehman: "Yeah, I think 100% of them are back right now. And when I think about the pandemic, as you mentioned, you had some closures, you certainly had some businesses impacted. And some businesses did ultimately go out of business, unfortunately. But you saw a tremendous amount of innovation by Connecticut residents, some of which started new businesses. Business starts, for example, are actually up 50% now versus pre-pandemic levels. We had almost 50,000 last year, so they increased 25% in 2020, and then another 25% in 2021. The other thing that we tried to do during the shutdown and during the pandemic was have very consistent rules and regulations. So unlike other states, Governor Lamont kept manufacturing open, construction open. We tried to provide as much flexibility as possible, and as consistently as possible to our small businesses."
Mike Hydeck: "So one of the things that we're unfortunately starting to see now is people exploiting some of the loopholes in the pandemic, the federal pandemic loans and grants used to keep these businesses afloat. A state rep. in West Haven is facing charges, now a Greenwich doctor arrested for misusing federal pandemic funds. Are there things we could have done better to try to safeguard these programs?"
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David Lehman: "It's unfortunate when you hear of fraud, and you hear those types of issues. And I think when you have significant amounts of money in a very short period of time, you're always trying to do, you know, as best as you can to minimize that fraud. I think it's impossible to eliminate it. Certainly with the benefit of hindsight, there's always additional things that can be done, additional safeguards. But really, it was a question during the pandemic, how quickly this money needed to go out, given the economy just stopped, versus having zero fraud. You always want to have zero fraud, zero issues like that, but I think that's the balance. And I think overall, at the federal level, and at the state level, I think high marks are appropriate, given a lot of money went into the economy at a time when it was needed. And I think the evidence of fraud so far has been quite low. And I think overall, that's what we would hope to see, given how strenuous the effort was, and how significant a shock it was to the economy."
Mike Hydeck: "So according to our Department of Labor, we have about 110,000 jobs open. Why do you think the market is so tight right now? We've got to worry about retirements and where some people say, 'look, this enhanced unemployment kept people on the sidelines a little longer.' How do you respond to that?"
David Lehman: "Yeah, so enhanced unemployment. And there's been lots of looks at this red states, blue states across the country, I don't think enhanced unemployment was the key to getting people back into the workforce sooner. If you look at states that kept the enhanced unemployment, their jobs grew over the summer, just as fast if not faster, as others that reduced the enhanced unemployment in advance of the federal government taking it away. So at a high level, Connecticut has a tight labor market, other states have a tight labor market, it's actually not even just a national phenomenon, it's a global phenomenon right now. So in terms of what we can do, and when I look at a high level, Connecticut's labor force is roughly 95.5, 96% of where it was pre-pandemic. I think some of this is what folks called the Great Resignation, I think COVID. And the pandemic made many folks in Connecticut and beyond think twice about their jobs, what they're doing with their life, what the next five, 10, 15 years mean for them. And a lot of them did decide to quit their jobs and look for new work. And I think that type of disruption in the labor market is really what we're seeing here. I think the best thing we can do is to continue to train folks for the jobs that are out there, continue to upskill folks so that the governor has over $100 million focused on workforce training and funds to rescale Connecticut workers. We want to make sure we get our unemployment rate lower and that we get our employment roles back to where they were before the pandemic if not higher."
Mike Hydeck: "Speaking to the Great Resignation, some lawmakers believe getting workers back into manufacturing because of these retirements that are pending because healthcare and education, in fact in mental health care, because of burnout, in each one of those fields. A suggestion is workforce training centers getting a tax break, some lawmakers are putting this on the table. Is the governor considering that?"
David Lehman: "Whether it's tax rate, a tax break or direct funding, I think the governor is certainly considering and supportive of assistance for workforce. You know, Connecticut has one of the the best most productive and most educated workforces in the country. When I talk to businesses and the 30 or so that have come to Connecticut expanded here. During the pandemic, they've come in large part due to our workforce. So again, whether it's direct funding for upscaling, whether it's tax breaks, I think everything should be on the table, because that has been a strength of the state and should continue to be so and we need to make sure we continue to invest in our workforce."
Mike Hydeck: "Now to keep our workforce afloat, we borrowed money from the federal government to keep our unemployment fund going. Small businesses have to pay that back. Could some of that debt come out of the surplus to lessen the burden on those small businesses, do you think?"
David Lehman: "Yeah, listen, that'll be a debate. So there was some curtailment, some payment last year of that, and for myself and administration, it's a question of, you know, the funds from the federal government has a finite resource. Where's that money best felt for you, best spent? Mental health, other workforce initiatives? Unemployment insurance is certainly one of the examples and that's a debate that will happen here in the legislative session that continues through May. It's certainly a worthy discussion and look forward to continue to discuss that with the business community, making sure we're investing those federal dollars in the best way possible for the Connecticut economy."
