Connecticut Economic Activity Report, Winter 2022 – Pompea College of Business

Gas Prices Keep Rising — Why? • 14

Taxes, Taxes, and More Taxes.

How Are They Affecting Connecticut’s Small Business Owners? • 17

The Labor Shortage: What Needs to Be Done, and Who Can Fix It? • 21

CONNECTICUT ECONOMIC ACTIVITY REPORT Winter 2022

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

IT’S DIFFERENT THIS TIME: CONNECTICUT UNEMPLOYMENT RATE By: Adrielys Gomez

Prepared by the

New Haven Economic Performance Laboratory Online at www.universityofnewhaveneconlab.org in association with the Department of Economics and Business Analytics Pompea College of Business University of New Haven This report is generously underwritten by the Pompea College of Business Advisory Board.

2 / It's Different This Time: Connecticut Unemployment Rate 4 / New Haven Region Economic Performance Index 6 / COVID-19’s Effect on City/Suburb Migration 8 / CPI and PCE: Past and Present 10 / Cost-of-Living Index 12 / Wage Change 14 / Opinion: Gas Prices Keep Risiing — Why? 17 / Opinion: Taxes, Taxes, and More Taxes.

How Are They Affecting Connecticut's Small Business Owners?

21 / Opinion: The Labor Shortage: What Needs to Be Done, and Who Can Fix It? 23 / The Collective 24 / About the New Haven Economic Performance Laboratory

Any opinion in this report is that of the author and does not necessarily reflect the opinion of the University of New Haven or the Pompea College of Business.

2

CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2022

T

he state of Connecticut’s unemployment rate dropped dramatically in 2021. Starting the year with an unemployment rate of 8.1 and finishing October with an unemployment rate of 6.4, progress seemed to have been made. Once compared to the United States average unemployment rate, the state has a higher rate than the national average. The state appeared to be going in the right direction, having recovered slightly more than 70 percent of the job opportunities lost during the lockdown months (March and April) at a higher rate than the national average. Wholesale trade, transportation and warehousing, healthcare, and social assistance had become major contributors to the increase of 4,100 job opportunities.1 Additionally, the construction sector had regained all jobs lost during the pandemic.

Although the state had yet to fully recover from the Great Recession of 2007 to 2009, the economy had started taking steps toward recovery at a far faster rate this time around.

The Great Recession was the greatest economic downturn in U.S. history. The collapse of the housing market — driven by low interest rates, lax oversight, and catastrophic subprime mortgages — exacerbated the economic crisis. As disastrous as it was, it resulted in a slow reduction in economic activity; on the other hand, the COVID-19 pandemic resulted in a very rapid decline in economic activity.

Another difference to note between the Great Recession and the pandemic is the market. Currently, the market is a “job-seekers market.” Speculators are labeling it the “Great Resignation” since employees now have the upper hand over their employers due to the abundance of job opportunities flooding the market. Employees used to get the short end of the stick, and hence, during the Great Recession, employers had the upper hand because of the lack of available employment. The tables have turned, prompting the quit rate to hit an all-time high. Once tied down, employees now willingly resign and enter different industries.

Despite positive growth from the Great Recession, the state’s unemployment rate was significantly higher than the national average. As of October 2021, the difference between the two was 1.8. To put the numbers in perspective, in October 2020, the gap between the state average and the national average unemployment rates in October 2020 (8.2) was the same as

the difference between the state average and the national average unemployment rates in 2021 (6.4).2

Figure 1: Connecticut Unemployment Rate vs. United States Unemployment Rate

Although Litchfield County had an unemployment rate lower than the national average, counties such as New Haven, Hartford, and Fairfield had slightly higher rates. Overall, the state’s rates have been rapidly declining since the beginning of the year, which fostered employment growth in the hotel industry (which also saw the biggest job losses in 2020).

Compared to its neighbor, the state of New York, both Connecticut and New York had a change of -1.8 in the unemployment rate in 2021. Under the CARES Act during the pandemic, both states provided additional unemployment insurance, which made them comparable. The addition of Pandemic Unemployment Assistance (PUA) allowed gig workers or independent workers to become eligible for unemployment benefits. The Pandemic Unemployment Compensation also added to a large number of unemployment rates from April 5, 2020, to July 26, 2020, with the addition of $600 per week, and from Jan. 3, 2021, to Sept. 5, 2021, with the addition of $300 per week. New York and Connecticut also provided their constituents with an additional 53 weeks of unemployment benefits, compared to the 26 weeks provided before the pandemic.

Figure 2: New York Unemployment Rate vs. Connecticut Unemployment Rate

Employers in Connecticut must make their companies immune to the Great Resignation to stand out and become leaders during the COVID-19 recovery stage. Employees appear to have the advantage of career advancement, but employers can take actions to effectively navigate the talent market and decrease the turnover rate.

1

https://portal.ct.gov/DOLCommunications/News/Press-Room/2021/ Unemployment-Rate-Continues-To-Drop-September-Posts-9thConsecutive-Month-Of-Job-Increases.

2

https://www.bls.gov/news.release/laus.nr0.htm.

Adrielys Gomez ’22 Major: Behavioral Economics Hometown: Guaynabo, Puerto Rico

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

3

NEW HAVEN REGION ECONOMIC PERFORMANCE INDEX By: Jamie Hickey and Francesca Micallef

T

he New Haven Region Economic Performance Index (NHREP Index), updated in October 2021, measures the performance and prosperity of the economy in the New Haven region over the past six months. The NHREP Index uses multiple variables to accurately determine the economy’s performance as a whole. These variables include education and health services for employees in New Haven, New Haven building permits, unemployment benefits claims, average weekly hours of work, and average weekly earnings for all New Haven employees. It should be noted that just like the previous NHREP Index, the range of restrictions put into place because of the pandemic are factored into the region’s performance.

Based on Figure 3, we can see that due to the pandemic, at the beginning of 2020, there was an abrupt decrease in the NHREP Index. The index began to increase in the middle of 2020, with the economy beginning to boom because of COVID relief. During 2021, however, with vaccines being widely distributed and states loosening regulations and reopening their economies, we have seen the region’s performance start to trend upward, with a steady increase in economic performance. More businesses have been able to reopen, and construction has been able to resume in the region. The easing of restrictions has impacted weekly earnings, weekly hours, unemployment, and building permits.

The government’s handling of the pandemic has allowed the region to continue to trend upward in the last portion of 2021 as they continue to ease restrictions.

In Figure 3, we can see the forecast model for the New Haven region’s economic performance; the forecast is a statistical model used to predict outcomes. Based on the forecast model, the index predicted the region’s performance would remain fairly constant through the beginning of 2022, with a point forecast of 179 and 181. The blue line on the graph is the predicted forecast and appears to be steadily increasing, but because many external factors play roles in the index, we have confidence intervals demonstrating the confidence range. At the beginning of 2022, we are 80 percent confident that the index will be between 140 and 217; we are 95 percent confident that it will be within a range of 123 and 241. Both the 80 percent and 95 percent confidence

4

CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2022

Figure 3: New Haven Region Economic Performance and 12-M Forecast

intervals are very large, and the region’s economic performance outcome will fall within those ranges. It must be noted that the forecast is created using a number of lagged observations of time series, so it is possible the forecast is not entirely accurate because of unpredictable external factors.

However, the next couple of months will be imperative in determining how the region will perform post-pandemic and see how quickly it will bounce back. If the government decides it is best to shut down the area, then the region’s economic performance will be affected and likely trend downward once again. Another factor that might hinder the region’s growth is the federal government’s orders concerning vaccinations in companies with over 100 employees. Vaccine resistance might prevent the region from reaching pre-pandemic performance in the coming months. Those giving up their jobs so that they do not have to get vaccinated might affect the region’s weekly earnings, weekly hours, and unemployment if they do not find jobs that do not require vaccination. Despite this, the booster rollout might influence those concerned about returning to the workforce because of their fear of contracting COVID-19. With more individuals receiving the booster shot, we may expect the NHREP Index to continue trending upward.

As we can see in Table 2, before the pandemic, the unemployment rate in the New Haven region was 4.1 percent. At the peak of the

Table 1

Table 2 Unemployment Rate

Point Forecast

Lo 80

Hi 80

Lo 95

Hi 95

October 2021

178

149

207

135

221

January 2020

4.4

November 2021

178

145

209

130

228

February 2020

4.1

December 2021

179

143

213

127

235

March 2020

4.5

January 2022

179

140

217

123

241

April 2020

8.2

February 2022

181

138

222

120

247

May 2020

11.3

March 2022

181

136

224

117

253

June 2020

11.2

April 2022

180

134

227

113

258

July 2020

11.7

May 2022

178

129

230

106

263

August 2020

8.5

June 2022

180

130

233

110

268

September 2020

8.3

October 2020

7.9

November 2020

7.8

December 2020

7.9

January 2021

8.6

February 2021

8.4

March 2021

8.4

April 2021

7.8

May 2021

7.2

June 2021

7.2

July 2021

7.2

August 2021

6.4

September 2021

5.7

Month

pandemic in July 2020, the unemployment rate reached the highest rate ever seen at 11.4 percent, not accounting for misclassification errors. Favorably, as of September 2021, unemployment was down to 5.7 percent. Nonetheless, this number is still not where it was pre-pandemic, but it shows the region is on the path to prepandemic rates. Ideally, with the current worker shortage across the country, we will be able to see the unemployment rate continue to decrease in the coming months. Seeing job openings filled will not only reduce the unemployment rate but also affect weekly earnings and weekly hours, thus increasing the region’s performance.

Jamie Hickey ’22

Month

Major: Behavioral Economics with a Finance Minor Hometown: Port Jefferson, NY

Francesca Micallef ’22

https://fred.stlouisfed.org/series/CTNEWH9URN

Major: Business Analytics — Marketing Analytics with a Finance Minor Hometown: Warwick, NY

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

5

COVID-19’S EFFECT ON CITY/SUBURBAN MIGRATION By: Francesca Micallef & Jamie Hickey

T

he COVID-19 pandemic affected the housing market worldwide but specifically had an effect on migration from the city to the suburbs in Connecticut.

According to the Hartford Business Journal, more than 27,000 people moved from New York City to Connecticut in 2020. Many people who lived and worked in New York City started working remotely due to COVID-19. Being able to work remotely gave civilians the opportunity to move to the suburbs, specifically, in Connecticut. With the demand for Connecticut homes increasing over time during the pandemic, a question arises: Are there enough homes for sale to meet buyer demand? An increase in demand causes prices to increase. Buying a house in Connecticut during the pandemic is more expensive than doing so pre-pandemic, but this is great for the sellers.

According to Redfin, home prices statewide were up 3.4 percent year over year in October. At the same time, the number of homes sold fell 19.2 percent, and the number of homes for sale fell 32.7 percent.

Figure 1

Figure 4: Median Sale Price for CT Homes Year-Over-Year Change

Figure 2

Figure 5: Home Sold Above List Price in CT Year-Over-Year Change

The general trend of the median sale price for Connecticut homes, as seen in Figure 4, has been increasing over the past three years. This corresponds with the percent of homes sold above list price also increasing over time (see Figure 5). The demand for houses has increased the sale prices, which in turn has caused homes to sell above list price. The issue that arises is the supply of homes for sale. As seen in Figure 6, generally, the number of homes for sale in Connecticut has decreased. Because there are fewer houses available for sale, the prices of the houses on the market have increased because demand is greater.

As seen in Figure 4, the median sale price for Connecticut homes has increased over the past three years. The median sale price is significantly higher now compared to before the pandemic hit. The highest median sale price was $340,000 in June of 2021. Figure 4 shows that the pandemic had a significant impact on Connecticut homes’ median sale price. The direction and pace at which home prices are changing are indicators of the strength of the housing market and of whether homes are becoming more or less affordable. The median price of a U.S. home is currently $305,000.

6

CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2022

Figure 3

Figure 6: Number of Homes for Sale in CT Year-Over-Year Change

As seen in Figure 5, from January 2021 to June 2021, there was a large spike in the percentage of homes sold above the list price.

June 2021 accounted for the highest percentage of homes sold above list price, at 62 percent. The highest median sales price also occurred in June of 2021. Homes that sold above list price likely received multiple offers. A high or growing percentage of homes selling above list price indicates that the housing market is competitive and bidding wars are becoming more common. A low or shrinking percentage of homes selling above list price suggests that the market is becoming less competitive.

The number of homes for sale, according to Figure 6, has become less and less over time. June 2021 was a peak for the number of homes for sale at 12,000 homes. The supply of homes for sale has decreased because the demand was high; people were buying more homes than were available. The direction and pace at which housing supply changes indicate whether the options for buyers are increasing or decreasing and can indicate whether homes are lingering on the market or being sold faster than sellers list them. There are currently 10,806 residential homes for sale in the United States.

Jamie Hickey ’22 Major: Behavioral Economics with a Finance Minor Hometown: Port Jefferson, NY

Income is the main factor for why many people moved out of the city and into the suburbs. The average rent for a one-bedroom apartment in New York City is $3,805, which is very expensive for most buyers — especially those who have lost their jobs.

Unemployment increased sharply during the pandemic, which contributed to people moving out of the city. Another factor is that people wanted more space because they were working remotely.

Working in a one-bedroom apartment with one’s spouse can be difficult when trying to find a quiet space. Also, being quarantined in a tiny space is far from ideal. Needing private space caused many people to move into houses.

During the past three years, the median sales prices of homes in Connecticut have increased, along with the percentage of homes sold above list price. The number of homes for sale has decreased in the past three years because more people are moving into Connecticut than are moving out. In the future, we can expect to see these trends continuing. Connecticut houses are becoming more expensive because more people want to live in the state.

REFERENCES Redfin. (2020, January). Connecticut Housing Market: House Prices & Trends. https://www.redfin.com/state/Connecticut/housing-market#overview Vasile, Z. (2021, May 5). Study: 27,200 people moved from NYC to CT in 2020. Hartford Business Journal. https://www.hartfordbusiness.com/article/study-27200-peoplemoved-from-nyc-to-ct-in-2020#:%7E:text=Over%2027%2C000%20 people%20left%20New,of%20the%20COVID%2D19%20pandemic

Francesca Micallef ’22 Major: Business Analytics — Marketing Analytics with a Finance Minor Hometown: Warwick, NY

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

7

CPI AND PCE: PAST AND PRESENT By: Amanda Sanfilippo

T

he Consumer Price Index (CPI) represents the average of the prices consumers pay for certain items such as food, energy, and medical care (U.S. Bureau of Labor Statistics, n.d.c). Personal Consumption Expenditure (PCE), the preferred method used by the Fed when formulating its policies, is a measure of prices paid for durable and nondurable goods as well as other services related to food and energy (U.S. Bureau of Economic Analysis, n.d.). Both indices focus on changes in national consumer spending and inflation. Rather than focus on one particular item, this is an overview of all the possible elements included in either index.

Coinciding with the World Health Organization’s declaration of the COVID-19 pandemic and the lockdowns back in March of 2020, both CPI and PCE experienced negative percent changes month to month (AJMC, 2021). However, we have experienced a dramatic increase in these indices as we approach the end of 2021.

The latest update for CPI came in October, when one of the largest increases of the year occurred. Seasonally adjusted, this marks a 0.9 percent increase from September. As seen in Figure 7, not seasonally adjusted, it has risen to 6.2 percent over the past 12 months.

More recently reported data have shown an even further increase to 6.8 percent. In fact, according to CNBC, the last time this index increased at such a rapid pace was more than 30 years ago — of course, three decades ago, consumers were not slowly recovering from an ongoing pandemic. For the most part, rising spending on energy, shelter, and vehicles has caused the recent steep rate. This is a slight change from back in August, when the biggest culprits were food and energy (Cox, 2021).

The Biden administration is aware of rising inflation concerns; however, the president appears to be relying on the Fed to take care of it (Smialek, 2021) while his Build Back Better legislation is stalled in Congress.

8

CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2022

Figure 7: CPI 12 Month Percent Change (NSA) Source: Bureau of Labor Statistics

Figure 8: Monthly Percent Change of CPI & PCE Source: BLS & BEA

The Bureau of Economic Analysis update for October was a percent change of 0.6 from the previous month. Although still high and a cause of concern among consumers, the change is actually lower than most economists expected (Winck, 2021). The last update from September was a 0.4 percent change: the same as CPI. The disparity between PCE and CPI values is due to the way the values are collected — via business surveys (Liberto, 2021). The percent changes throughout the past nine months have not been fluctuating as wildly as we have seen from the CPI. Last spring, it was observed that consumers were purchasing more goods overall (U.S. Bureau of Economic Analysis, 2021). This uptick may be the result of pent-up demand, stimulus payments and other fiscal measures, and the availability and public administration of vaccines.

Figure 9: Monthly Percent Change of CPI & PCI Source: BLS & BEA

REFERENCES AJMC. (2021, January 1). A timeline of Covid-19 developments in 2020. https://www.ajmc.com/view/a-timeline-of-covid19developments-in-2020 Cox, J. (2021, September 14). Consumer prices post smaller-thanexpected increase in August. CNBC. https://www.cnbc.com/2021/09/14/consumer-price-indexaugust-2021.html Cox, J. (2021, November 10). U.S. consumer prices jump 6.2% in October, the biggest inflation surge in more than 30 years. CNBC. https://www.cnbc.com/2021/11/10/consumer-price-indexoctober.html Horsley, S. (2021, November 3). Inflation is at a 30-year high.

Here’s how the Federal Reserve plans to deal with it. NPR. https://www.npr.org/2021/11/03/1051478945/federal-reserveinflation-jobs-employment Liberto, D. (2021, November 20). Personal consumption expenditures (PCE). Investopedia. https://www.investopedia.com/terms/p/pce.asp#pce-priceindex-pcepi-vs-consumer-price-index-cpi

Because CPI and PCE both measure inflation, albeit in different ways, it is common for them to mimic each other, at least directionally. Most of the time, CPI has percent changes that are larger than those of PCE, although as we can see in Figures 8 and 9, there are cases of intersection. Considering just 2021, CPI’s peaks and valleys have been much more volatile. Because these increases have become a serious issue, on Oct. 6, 2021, the Fed discussed leaving interest rates around zero as well as slowly ending the bond policy that was put in place during the pandemic. The Fed will not yet jump to raising interest rates because it wants to see whether inflation can turn around with these minor adjustments in place (Horsley, 2021).

With continuing supply chain issues surrounding this holiday season, both of these measures likely will see increases at least for the next few months (Winck, 2021). In light of the newly announced COVID-19 variants, shopping habits may see another vast change, for better or worse.

Amanda Sanfilippo ’21 Major: Business Analytics Hometown: Shelton, CT

Smialek, J. (2021, November 10). Fastest inflation in 31 years puts more heat on Washington. The New York Times. https://www.nytimes.com/2021/11/10/business/economy/ consumer-price-inflation-october.html U.S. Bureau of Economic Analysis. (n.d.). Personal consumption expenditures price index. Retrieved November 29, 2021, from https://www.bea.gov/data/personal-consumptionexpenditures-price-index U.S. Bureau of Economic Analysis. (2021, May 28). Personal income and outlays, April 2021. https://www.bea.gov/news/blog/2021-05-28/personalincome-and-outlays-april-2021 U.S. Bureau of Labor Statistics. (n.d.a). Bureau of Labor Statistics data (1 month). Retrieved November 29, 2021, from https://data.bls.gov/timeseries/CUSR0000SA0&output_ view=pct_1mth U.S. Bureau of Labor Statistics. (n.d.b). Bureau of Labor Statistics data (12 months). Retrieved November 29, 2021, from https://data.bls.gov/timeseries/CUUR0000SA0&output_ view=pct_12mths U.S. Bureau of Labor Statistics. (n.d.c). CPI home. Retrieved November 29, 2021, from https://www.bls.gov/cpi/ Winck, B. (2021, October 29). Inflation looked less transitory in September as the global supply chain crisis pushed prices higher. Business Insider. https://www.businessinsider.com/ pce-inflation-september-price-growth-supply-chain-crisiseconomic-recovery-2021-10 Winck, B. (2021, November 24). Inflation rises sharply in October, prompting more fears of a price-growth crisis. Business Insider. https://www.businessinsider.com/pce-inflation-october-pricegrowth-supply-chain-energy-crisis-economy-2021-11

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

9

WAGE CHANGE

Figure 10: Percent Change in Northeastern States from Q2 2020 to Q2 2021

By: Walter Pico

T

he data set is built using data collected from the U.S. Bureau of Labor Statistics quarterly census of employment and wages. The U.S. employment data in this release are presented for the second quarter of 2020 and the second quarter of 2021.

It contains information regarding employment and wages in 339 of the 343 largest U.S. counties. The data collected and analyzed focuses on reporting and visualizing the percentage changes in the states of Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.

The growth target for nominal wages is 3.5–4 percent, according to the deferral reserve 2 percent overall price inflation target; 1.5–2 percent productivity growth; and a stable labor share of income. As of November 2021, the current national nominal wage growth was 4.8 percent.

The COVID-19 pandemic had a huge impact on the U.S. labor market; the economy is only recently beginning to heal from the damage the downturn inflicted. The Hartford Courant reports that nearly 125,000 jobs in Connecticut disappeared during the pandemic, a 7.5 percent drop; the worst-performing industries were accommodation and food services, which shed 31,418 jobs, a drop of 24.4 percent in the labor force. Other services such as retail, trade, and government each lost more than 10,000 positions.

Compared with other recent recessions, the pandemic-induced recession has been particularly hard on low-wage workers, but despite that, it did not have much of an adverse effect on overall average weekly earnings overall in the Northeast. Figure 10 demonstrates the percentage change in the Northeastern states.

New Hampshire shows a dramatic increase; it has the largest overthe-year percentage increase in average weekly wages, with an increase of 10.60 percent. It also saw an average weekly wage gain

of $1,345 (net change of $129) in financial activities, which made the largest contribution to the county’s increase in average weekly wages. Rhode Island had the largest over-the-year percentage decrease in average weekly wages, with a loss percentage of 0.30.

An average weekly wage decrease of $1,168 resulted in a net change of -$4 over the year (Figure 11).

Overall, earnings for the state of Connecticut held a balanced weekly wage during the pandemic — in part because of an inflation slowdown in 2020 that benefited all workers, unemployed workers relief via unemployment insurance, the CARES Act, and a moratorium on residential evictions. According to the Connecticut Department of Labor, average annual wages increased in 2020 by 8.1 percent to $75,411. According to Table 3, the states of New Hampshire and Pennsylvania have not changed in the past 10 years; one of many factors that could be affecting this phenomenon

Table 3 Percent Change

Q2 2020 Average Weekly Wages

Q2 2021 Average Weekly Wages

Net Change

Connecticut

0.60%

$1,402

$1,411

$9

Maine

2.40%

$981

$1,005

$24

Massachusetts

1.10%

$1,573

$1,591

$18

New Hampshire

10.60%

$1,216

$1,345

$129

New Jersey

0.80%

$1,376

$1,387

$11

New York

1.30%

$1,520

$1,540

$20

Pennsylvania

2.00%

$1,170

$1,193

$23

Rhode Island

-0.30%

$1,172

$1,168

-$4

Vermont

-0.20%

$1,055

$1,053

-$2

States

10

CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2022

Figure 11: CT Wage Increment Compared to Nearby States in the Last 10 Years

is that neither state has a proper minimum wage — the last time New Hampshire and Pennsylvania increased their minimum wage was in 2009. Following the federal minimum wage of $7.25 per hour, both states have the lowest minimum pay rate among the New England states. There has been a noticeable increase in Connecticut’s minimum wage in the past 10 years compared with the rest of the Northeastern states. Massachusetts ranks first with a minimum wage of $13.50 as of 2021. In May, Connecticut Governor Ned Lamont signed a law that would raise the minimum wage gradually to $15.00 over several years. Future increases include $13.00 on Aug. 1, 2021, $14.00 on July 1, 2022, and $15.00 on June 1, 2023. According to the Economic Policy Institute, earnings grew because a decline in fulltime workers was concentrated among low-wage workers in lowwage industries and occupations; therefore, wages grew primarily because more than 80 percent of the 9.6 million net jobs lost in 2020 were jobs held by wage earners in the bottom 25 percent of the wage distribution set.

Walter Pico ’21 Major: Business Analytics Hometown: Guayaquil, Ecuador

The Northeast is having a positive increase wage change, with most states increasing their minimum wages. After examining and assessing the data, Connecticut appears to be in a strong position, which suggests positive financial health. Several different factors are shaping average wages during these turbulent times.

Legislatively, the minimum wage should keep increasing in the coming years, and along with labor shortages putting pressure on wages, average wage growth estimates may continue to rise in the coming months.

REFERENCES Gould, E., & Kandra, J. (2021, February 24). Wages grew in 2020 because the bottom fell out of the low-wage labor market. Economic Policy Institute. https://www.epi.org/publication/state-of-working-americawages-in-2020/ Singer, S. (2021, August 4). The average wage in Connecticut jumped in 2020 — but only because so many at the lower end of the scale lost their jobs in the coronavirus pandemic. Hartford Courant. https://www.courant.com/business/hc-biz-connecticut-pandemic-laborforce-20210804-p6jvs2as7veydm744s4p2h66ii-story.html University of New Haven. (n.d.). Connecticut economic activity report.

Retrieved Month Day, Year, from https://www.newhaven.edu/business/economic-activity-report.php U.S. Bureau of Labor Statistics. (2021, November 23). Economic news release. https://www.bls.gov/news.release/cewqtr.t03.htm

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

11

UNEMPLOYMENT By: Joe Poveromo

T

he United States and Connecticut mobilized almost every tool at their disposal to counter the COVID-19–induced economic crisis. Among these numerous tools were the increased unemployment benefits that had been given out throughout the pandemic. With these increased benefits coming to an end, expectations remain optimistic that there will be an upward trend in the employment rate. Unemployment numbers have remained relatively stagnant for an extended period. Connecticut has seen fluctuating unemployment rates, which ranged from 6 percent to 8 percent for the past year but stabilized around 8 percent in early 2021.

The COVID-19 crisis generated an economic response hitherto unseen in Connecticut. The state’s extreme measures (along with Federal governmental measures) have helped the economy recover and hastened the drop in the unemployment rate. Although the statewide unemployment rate remains about 2 percent higher than the U.S. average, Connecticut has seen promising growth. At the beginning of 2021, the U.S. was at a 6.3 percent unemployment rate and ended with a 5.2 percent rate by August (Figure 12), and the November reported rate was 4.2 percent. Falling by almost an entire percentage point, the United States’ aggressive fiscal and monetary policy seems to have catalyzed a positive effect on employment, especially considering the downward trend in unemployment. By contrast, Connecticut’s unemployment rate remains between the aforementioned 8 percent to 6 percent range.

Connecticut’s unemployment began at 8.1 percent and ended at 7.2 percent (Figure 13). Overall, the downward unemployment trend seems to be benefiting the labor market and the unemployment rate in general.

Despite the encouraging unemployment rate trends, both the country and the state have a long way to go before the numbers return to pre-pandemic levels. To put the numbers in perspective, Connecticut’s unemployment rate in August 2019 was at 3.6 percent, and the national unemployment rate was at 3.5 percent, the lowest rate since 1969 (U.S. Bureau of Labor Statistics).

12

CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2022

Figure 12: US Unemployment Rate vs. CT Unemployment Rate

Figure 13: Connecticut Unemployment Rate

Figure 14: Ensemble Forecast, CT Unemployment Rate

Figure 15: US Unemployment Rate with 3 Month Moving Average

Figure 2 US unemployment rate = RED 3 month moving average= BLUE

To further assess the situation, certain techniques were utilized to forecast the go-forward unemployment rate. The forecasting models used were: the Error-Trend-Seasonal (ETS), Autoregressive Integrated Moving Average (ARIMA), Neural Network nonlinear autoregressive model (NNETAR), seasonally adjusted (STLM), exponential smoothing (TBATS), and naive forecasting models.

Upon running all these through an ensemble forecast, the forecasted numbers for the next two years are shown in Figure 14 As seen in Figure 15, the unemployment rate is expected to decrease even further in the state of Connecticut and to stabilize around the 7 percent mark. The good news is that the Connecticut unemployment rate does not seem to be increasing, and its safe to say an increase will not be seen for a while. ETS alone, which is the most accurate of the ensemble forecasts, predicts a simple downward curve that stabilizes around September 2023.

Joseph Poveromo ’22 Major: Economics with a Philosophy and History Minor Hometown: Naugatuck, CT

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

13

OPINION

Gas Prices Keep Rising — Why? BY: JAMIE HICKEY

I

n recent months, consumers have been noticing continually rising prices at the pump. With the Biden administration’s campaign promise to go green, it appears its members are acting in a hypocritical manner by trying to influence the Organization of the Petroleum Exporting Countries (OPEC) and its allies to drill more oil to cool down oil and gas prices. If the administration will encourage other countries to produce more oil, then why not encourage those in the U.S. who have unused leases and permits to use them to drill oil? Since the Biden administration has taken office, gas prices have reached all-time highs. However, many factors are causing these prices.

Over the past two years, we have seen a considerable price variation in the cost of a gallon of gasoline. The cost of a regular gallon of gas went from a low of $1.84 in April 2020 to a high of $3.29 in October 2021, and prices have reached nearly $4 in

14

CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2022

California and other parts of the Northwest. It is estimated that Americans pay $430 million more every day on gasoline than they did one year ago.

Numerous events have resulted in this fluctuation, the largest likely being the COVID-19 pandemic that shut down the world in March of 2020 and a change in demand resulting from it. In Figure 16, we can see the price plummet from January 2020 (at $2.55 per gallon of regular gas) to April 2020 (at a low of $1.84 per gallon of regular gas). The most considerable decrease was when all lockdowns started taking effect; the average gas price went from $2.23 per gallon in March 2020 to $1.84 in April 2020 — a drop of nearly $0.40 in one month. The decrease at the beginning of 2020 was due to the decrease in gas demand and the subsequent excess supply. With most stores being shut down aside from grocery stores and other essential businesses, there was almost nowhere

OPINION

for people to go. Those who worked at nonessential businesses worked from home if possible or were furloughed; this drove demand for gas down, as not many people were commuting or going places.

Despite still being in the midst of the COVID-19 pandemic, we are still seeing high prices at the pump. First, unlike in March of 2020, COVID-19 has been researched, and vaccines have been created to protect Americans and people worldwide from the deadly virus.

This means lockdowns are being lifted across America and around the world, and economies have begun to open back up. In turn, this has led to increased demand for gas as people return to work and enjoy pre-pandemic activities, meaning oil suppliers need to increase their output.

One of the most significant factors that determine gas prices is the price of oil; these two goods’ price trends go hand in hand, falling and spiking together. In October, oil prices reached the highest point since 2014 at $85 per barrel. Outside of demand itself, other factors played roles in the rise in oil prices. In October, OPEC and its allies decided it was best to output oil gradually to meet the new demand and raise production by 400,000 barrels in November. This slight increase in a world economy that would require a much more

sizable output to get prices to start cooling off only caused costs to rise more. The motive for such a slight increase in oil production is to boost oil-drilling countries’ revenues by keeping oil prices high.

Another factor that drove gas prices to reach a seven-year high in the U.S. was the Department of Energy’s announcement that it did not have any plans to utilize the U.S. petroleum reserves to reduce the rapid rise in gas prices across the country, as these reserves are meant for emergency use only.

Aside from the COVID-19 pandemic, other factors have affected gasoline prices and supply in the U.S. One was Hurricane Ida, which made landfall on Aug. 29, 2021, in Louisiana and caused the most damage to offshore energy production since 2005. Almost all offshore oil production sites in the Gulf of Mexico were shut down, and at the beginning of September, 79 percent of the sites remained shut down. It is estimated that approximately 17.5 million barrels could not be put into the economy in that period, and hurricane-caused shutdowns were expected to result in a loss of 30 million barrels. The Gulf of Mexico’s offshore sites produce 1.8 million barrels per day, or 16 percent of the U.S. daily oil supply. These losses counteracted any international increase in oil production.

CONTINUED >

Figure 16: U.S. Regular All Formulations Retail Gasoline Prices Dollars per Gallon

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

15

OPINION

Gas Prices Keep Rising — Why?

CONTINUED

President Biden should call those companies sitting on unused leases to drill oil to add more supply to the economy, lowering gas prices. … These actions would help put more supply into the economy, offset OPEC’s plan, and ultimately decrease gas prices.

REFERENCES Bureau of Land Management. (n.d.). Programs: Energy and minerals: Oil and gas: Leasing: General Leasing: Bureau of Land Management.

Retrieved November 29, 2021, from https://www.blm.gov/programs/energy-and-minerals/oil-and-gas/ leasing/general-leasing Domonoske, C. (2021, July 7). Oil prices are in turmoil right now. here are 5 things you need to know. NPR. https://www.npr.org/2021/07/07/1013721716/oil-prices-are-in-turmoilright-now-here-are-5-things-you-need-to-know Fahys, J., & Kusnetz, N. K. (2021, January 28). Biden’s pause of new federal oil and gas leases may not reduce production, but it signals a reckoning with fossil fuels. Inside Climate News. https://insideclimatenews.org/news/27012021/biden-federal-land-oilgas-drilling/ Morrison, S. (2021, May 10). How a major oil pipeline got held for ransom. Vox. https://www.vox.com/recode/22428774/ransomeware-pipelinecolonial-darkside-gas-prices

Another factor that affected gas prices was the Continental Pipeline running from Texas to New Jersey being hacked on April 29, 2021, due to a compromised password. This incident affected the gas supply in East Coast states because officials completely shut down the pipeline; a ransom note was found on May 7, 2021, that stated the hackers would release data they obtained through the breach if the ransom was not paid. The shutdown was precautionary as no one knew the hacker’s intentions. The pipeline, which transports 2.5 million barrels of oil to the Eastern U.S., was shut down until May 12, 2021. To offset the supply issues the East Coast would see as a result, the U.S. government altered rules on fuel transportation on the roads to help the supply issue; despite this, many gas stations ran out of gas, and U.S. fuel prices rose $0.06 in one week.

These events have compounded the price of gasoline. Now — how do we fix it given OPEC’s current plan to only gradually produce more oil despite President Biden encouraging it to produce more?

At the beginning of his term, President Biden halted the processing of new permits or leases for drilling oil on federal lands and waters.

Currently, the U.S. Department of the Interior has estimated that there are 26 million acres leased to oil companies onshore; of those acres, 14 million are not being used, and out of the 12 million acres of offshore federal land, 9 million are not being used to produce oil. These leases last 10 years, and with Biden’s order, companies will still be able to receive permits and file applications for permits to drill (APD) on land they have already leased. Given the fact that there are millions of acres’ worth of unused drilling leases, President Biden should call those companies sitting on unused leases to drill oil to add more supply to the economy, lowering gas prices.

If such companies decide not to abide by this call to action, then they should be at risk of their unused leases being revoked. These actions would help put more supply into the economy, offset OPEC’s plan, and ultimately decrease gas prices.

16

CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2022

Ponciano, J. (2021, September 27). Oil prices surge to three-year highs after hurricanes and unexpected demand-how much higher can they go?

Forbes. https://www.forbes.com/sites/jonathanponciano/2021/09/27/oilprices-surge-to-three-year-highs-after-hurricanes-and-unexpecteddemand-how-much-higher-can-they-go/?sh=d3f9e2f54c3e Rapier, R. (2021, September 26). Revisiting the blame for high gas prices.

Forbes. https://www.forbes.com/sites/rrapier/2021/09/26/revisiting-theblame-for-high-gas-prices/?sh=53aa6f2de31e Russon, M.-A. (2021, May 10). US fuel pipeline hackers ‘didn’t mean to create problems.’ BBC News. https://www.bbc.com/news/business-57050690 Stevens, P. (2021, October 9). U.S. crude oil price tops $80 a barrel, the highest since 2014. CNBC. https://www.cnbc.com/2021/10/08/us-crude-oil-price-tops-80-abarrel-the-highest-since-2014.html U.S. Energy Information Administration. (n.d.). U.S. regular all formulations retail gasoline prices (dollars per gallon). Retrieved November 29, 2021, from https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emm_ epmr_pte_nus_dpg&f=m Valle, S. V., & Varghese, A. V. (2021, September 8). U.S. oil losses from Hurricane Ida rank among worst in 16 years. Reuters. https://www.reuters.com/business/energy/oil-losses-hurricane-idarank-among-worst-16-years-2021-09-07/

Jamie Hickey ’22 Major: Behavioral Economics with a Finance Minor Hometown: Port Jefferson, NY

OPINION

Taxes, Taxes, and More Taxes.

How Are They Affecting Connecticut’s Small Business Owners?

BY: ADRIELYS GOMEZ

C

onnecticut has suffered some of the slowest employment and personal income growth in the U.S. following the 2008 financial crisis, despite the fact that the national economy has been booming. The state currently has some of the highest state and local taxes. The COVID-19 pandemic did not help matters either.

The pandemic has had a “large negative impact” on 34 percent of small business owners in Connecticut, which is nearly 4 percent more than the national average. Small business owners already take years to break even, but during the pandemic, Governor Ned Lamont issued stay-at-home orders that forced many mom-andpop shops to close in hopes of “flattening the curve.”

Although Connecticut’s reaction to COVID-19 has made it a leader among the states, major uncertainty lingers as the state fights to handle the public health crisis. Connecticut’s economy took

a significant blow as a result of coronavirus shutdowns and restrictions, with the state losing a record 291,300 jobs in March and April of 2020 — more than 17 percent. Connecticut performed better than other states during the early economic downturn, and the U.S. Bureau of Economic Analysis has estimated that the state’s GDP fell 4.6 percent in the first three months of the year.

What does this mean for small businesses? Once doors were able to reopen, small business owners felt the sting of the pandemic’s toll the most, struggling to stay afloat and pay their employees.

It is also important to note that small businesses make up nearly 99.4 percent of businesses in the state and employ at least 48.4 percent of the workforce at any given time.1 These are the same businesses that will be at the forefront of the state’s recovery from the pandemic as we start to move back to normalcy.

CONTINUED >

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

17

OPINION

Taxes, Taxes, and More Taxes

CONTINUED

The federal government acknowledges the importance and impact of small businesses on the economy; therefore, it passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to alleviate and reduce economic harm. Both the CARES Act and the Families First Coronavirus Response Act contributed significantly.

and cutting tax rates, mom-and-pop shops will be able to survive and hopefully thrive, as smaller businesses face the highest tax burdens.

In November of 2021, because of a strong stock market and federal coronavirus aid, the current fiscal year budget surplus climbed by $400 million to roughly $900 million.2 According to the most recent fiscal report from the Office of Policy and Management, the fiscal year 2022 surplus would be $894.7 million — above the forecast $274.9 million surplus. The current expected surplus comprises $802.7 million in excess collections and $92 million in net spending below the legislature’s authorized

Connecticut is a considerable economic contributor to the nation.

The state is no stranger to small businesses; in fact, when the financial system in Connecticut is examined, it is sometimes referred to as the “state of small business.” Connecticut’s support for small companies has been obvious in its pro-business attitude over the past several years, which continues to assist If a comprehensive tax relief strategy that benefits both small thousands of businesses and help them operate in the businesses and individuals is implemented, then Connecticut present climate. In order to foster growth in the state’s can become a business hub while also attracting individuals to economy, two things should be done First, restore the fill its workforce. … Reinstating or increasing tax incentives such Research & Development as the R&D Tax Credit and the Apprenticeship Credit can act as Tax Credit (R&D Tax Credit) to recruit entrepreneurs, catalysts for much-needed positive growth. nurture new enterprises, and encourage private sector investment. The R&D Tax Credit is provided to businesses that create new or better budget. Connecticut’s rainy-day fund is expected to reach about business components such as processes, computer software, $5 billion by June 30, 2022. With a current balance of $3.1 billion methods, formulations, or innovations that result in new or — the statutory maximum — the state’s reserve fund that had enhanced functionality, performance, dependability, or quality. little capital in 2011 is now one of the healthiest in the country.

It is a straightforward dollar-for-dollar tax savings measure that Excess revenues must be used to reduce unfunded obligations in decreases a company’s tax bill. There is no annual restriction the Connecticut Employees’ Retirement System and the Teachers’ on the amount of costs and credits that companies can claim.

Retirement System, according to legislation.

This tax credit frequently offers a source of extra income to In 2017, bipartisan fiscal reforms laid the groundwork for a reversal a wide range of businesses — up to 10 percent of yearly R&D in fiscal fortunes. Connecticut’s bond credit rating reflects a expenses for federal purposes and substantially more when state significant improvement in the state’s fiscal practices.3 The surplus incentives are taken into account. It is one of the best options for represents an opportunity for the state to start paying long-term businesses to significantly cut their tax obligations. Companies liabilities and begin minimizing future deficits. If a comprehensive from a variety of sectors can qualify for federal and state tax tax relief strategy that benefits both small businesses and breaks for what amounts to their everyday operations, which individuals is implemented, then Connecticut can become a allows them to recruit qualified personnel, invest in new goods business hub while also attracting individuals to fill its workforce. and service lines, and expand their operations. Best of all, the R&D The implemented tax policy should indicate the level of importance Tax Credit is available to businesses of all sizes, not only large STEM sectors are to the state, which can benefit the state as a corporations with research facilities. Second, reduce state and whole and help it grow. Reinstating or increasing tax incentives pension spending; the total debt for costs, including retirement such as the R&D Tax Credit and the Apprenticeship Credit can act costs, totaled $79.5 billion in 2021. By broadening the tax base as catalysts for much-needed positive growth.

18

CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2022

OPINION

Figure 17: Connecticut GDP All Industry Total

https://foreignusa.com/small-businesses-in-connecticut/. https://www.cbia.com/news/issues-policies/tax-relief-calls-as-budgetsurplus-jumps/. https://portal.ct.gov/Office-of-the-Governor/News/PressReleases/2021/05-2021/Governor-Lamont-Says-Four-Credit-RatingUpgrades-Recognize-a-Major-Shift. https://portal.census.gov/pulse/data/.

Adrielys Gomez ’22 Major: Behavioral Economics Hometown: Guaynabo, Puerto Rico

https://www.cbia.com/wp-content/uploads/2021/03/Marcum_20.pdf. https://www.cbia.com/news/small-business/2019-small-businessclimate/.

1

Small Business Pulse Survey.

2

Survey of Connecticut Businesses.

3

Report: High Taxes, Mandates Hurt State’s Small Business Climate

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

19

20

CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2022

OPINION

The Labor Shortage: What Needs to Be Done, and Who Can Fix It? BY: JOE POVEROMO

W

ith 2021 coming to a close, it is clear that the fallout of COVID-19 is still being felt throughout the nation, especially in the field of labor economics — specifically, the shortage of labor plaguing the U.S. The high unemployment rates seen in 2020 were followed by an impressive rebound as countrywide employment bounced back faster than expected. This labor crisis was always inevitable; the pandemic only catalyzed the reactions we have now.

We have seen an amazing rally of workers during and immediately after the pandemic. People working at home have realized how poorly, in some cases, they are treated in the workplace. In turn, this realization has allowed them the opportunity to redetermine how their positions should function within an organization. One of the biggest problems today lies in the video game industry. The sexual assault and harassment allegations at Activision Blizzard are a perfect example of employees stepping up and holding their supervisors and leaders accountable. Another major problem that was highlighted involved employees being forced to work numerous overtime hours to get games out on schedule. These toxic working conditions were at the company for a long time and it took a lot to empower the workers to stand up for themselves.

Another significant facet of the labor crisis is a very simple issue: wages have simply not increased enough to incentivize people to work. Even before the pandemic, the income disparity between the rich, the working class, and the poor was a huge social issue.

But after COVID-19, it is clear how exploited the American worker is — and this exploitation has taken away any real incentive to find work. The income differences are incredible. The curves are shaped like a “K,” with the top 1 percent’s income trending heavily upward and the middle and lower classes in freefall. With this exploitation of workers at the forefront of American labor economics, the people want and desperately need wage increases. The minimum wage has been the same for years, and big firms have been paying their employees too little for far too long.

The final factor actively contributing to the current labor crisis is the financial cushion that the U.S. government gives the American people. During the pandemic, monetary and fiscal policy was purely expansionary. Not a single politician was brave enough to suggest a tax raise, and not a single federal employee thought higher interest rates were a good idea. Interest rates sat at zero, and the stimulus packages given to the American people made the 2008 stimulus look like pocket change. Atop this massive influx of cash came an increase in savings — specifically for middle- and lower-class people. Because of this cushion, people are not as worried about getting back to work. We saw state pandemic aid fail to get people back to work because employees had enough cash that there was no immediate need for income.

These three situations have created a perfect storm for a labor shortage: the exploitation of workers, the sexual abuse of women in the workplace, and the cash infusion of COVID-19 stimulus. To alleviate these issues, both firms and the federal government must take steps.

As a country, we must address the disgusting allegations brought upon Activision Blizzard and ensure those responsible for such heinous acts are punished swiftly. The American worker has it bad already; the last thing we need is more workplace sexism and discrimination. The government must back up these women, threaten to punish the company as a whole, and set a precedent for future firms to ensure strict sexual harassment policies are implemented and abided by.

A potential fix for the income disparity issue is simply to pay workers more. This seems like an incredibly simple claim because, quite honestly, it is. Big companies have been paying workers terribly, and income for the average American worker has barely risen since the 1970s. As suggested by research done by the Pew CONTINUED >

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

21

OPINION

The Labor Shortage

CONTINUED

Research Center, the median income for the upper class was $207,400 in 2018 versus $192,200 in 2000 (Horowitz et al., 2020). These levels are fairly expected and do not say much alone.

However, when we see that the lower-class median income rose from $28,200 in 2000 to $28,700 in 2018, it is obvious that the income disparity problem is and has been a long-time issue. In the same 18-year span, the upper class has increased its median income by $15,200, whereas the lower class’s median income has risen by only approximately $500 (Horowitz et al., 2020).

These numbers do not take into account 2019–2021, when the rich gained incredible wealth while the lower and middle classes struggled to increase their income. The bottom line is this — companies need to increase their wages and ensure they pay fairly.

This responsibility falls to them. If they want workers, then they have to pay a living wage.

The final fix concerns the cushioning effect caused by the extreme expansionary measures that the government took during the pandemic. The fix is to incentivize buying and economic activity in consumer markets, make people want to spend their money, and circulate this money in the economy. With this increase in spending alongside time and monetary or fiscal policy, people will eventually have to return to work and fill the positions that so many organizations desperately need. Increasing interest rates would be a smart move here; doing so also tackles the nationwide inflation problem. Alternatively, the government could go the fiscal route and increase taxes levied or restrict certain unemployment benefits. By following these contractionary steps, the U.S. government can expect more people to go to work and fill spots firms so desperately need.

REFERENCE

Joseph Poveromo ’22 Major: Economics with a Philosophy and History Minor Hometown: Naugatuck, CT

22

CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2022

Horowitz, J. M., Igielnik, R., & Kochhar, R. (2020, August 17). Trends in U.S. income and wealth inequality. Pew Research Center’s Social & Demographic Trends Project. https://www.pewresearch.org/social-trends/2020/01/09/trends-inincome-and-wealth-inequality/

A COLLECTION FROM THE COLLECTIVE The University of New Haven Economics Collective is an online space where faculty, students, and business industry leaders can connect and network by sharing content, whether it be report analysis, political commentary, or anything else on their mind. Members can comment on each other’s posts, creating a meaningful and enriching dialogue that extends beyond the traditional classroom educational experience. In the Collective, all members are economists, whether the poster is a freshman student or a Nobel Prize winner. The lines of stature are blurred through the medium of the internet, leading to more thoughtful and genuine discussions. These moments of connectivity construct social capital, which helps build up the Economics Department as more than an office of the University of New Haven, rather making it a community of people who care for one another beyond the academic setting.

The Collective has already been used as a method of surveying and will be used as such in the future to further employ the method of using the wisdom of crowds.

The following titles are just a glimpse of content shared on the collective. Visit the Collective at www.universityofnewhaveneconlab.org/forum

Are Electric Cars Really Green?

Claude Chereau, June 3, 2021 Electric cars are being promoted around the world as being ‘greener’ than their fossil-fuel counterparts. While electric cars do not indeed emit CO2, we need to take a whole-life cycle approach and answer the following questions: 1) how is the electricity used to power the cars generated? 2) how is the lithium to make the batteries extracted? 3) how are the batteries recycled? This post addresses only the 2nd question.

A Great Example of Mainstream Media Choking On Their Own Words and Preconceived Beliefs.

David Sacco, June 4, 2021 This Vanity Fair article provides a great timeline and synopsis of how the Wuhan Lab leak theory has gone from conspiracy theory to a better than even money odds explanation of how COVID-19 actually started. It will be left to economists and future historians to decide how much Trump Derangement Syndrome will wind up costing our global economy with this being a prime example. For those of us old enough to remember the indisputable evidence presented as proof of Iraq's WMDs which is the greater oxymoron?

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

23

ABOUT THE NEW HAVEN ECONOMIC PERFORMANCE LABORATORY The Connecticut Economic Activity Report is a publication of the Department of Economics and Business Analytics, Pompea College of Business, University of New Haven, 300 Boston Post Road, West Haven, CT 06516. www.universityofnewhaveneconlab.org

Research Staff Adrielys Gomez ’22 Jamie Hickey ’22 Eimy Mena Medina ’22 Francesca Micallef ’22

Walter Pico ’21 Joseph Poveromo ’22 Amanda Sanfilippo ’21

Supervising Faculty and Research Directors Esin Cakan, Ph.D., Professor

The research staff are upper-class students in the Department of Economics and Business Analytics. Although all students work under the auspices of the supervising faculty and research directors, each student is individually responsible for interpreting and analyzing the data. The Laboratory is a teaching space, and this report is a product of that space. In addition, staff members work closely with the University of New Haven Economic Collective (http://unheconomicscollective.ning.com), which brings together students, faculty, alumni, and members of the broader community to foster a meaningful and relevant exchange of ideas. A fundamental focus of the Laboratory is to formulate, construct, and examine nontraditional socioeconomic metrics applicable to the southern region of Connecticut by employing traditional empirical methods as well as data and text-mining methods.

Claude Chereau, Ph.D., Practitioner-in-Residence Patrick Gourley, Ph.D., Assistant Professor Brian A. Marks, J.D., Ph.D., Senior Lecturer and Executive Director, Entrepreneurship and Innovation Program A. E. Rodriguez, Ph.D., Professor Kamal Upadhyaya, Ph.D., Professor

Administrative and Editorial Staff Esin Cakan, Ph.D., Professor Anthony Calabro, MBA, Managing Editor Brian A. Marks, J.D., Ph.D., Senior Lecturer and Executive Director, Entrepreneurship and Innovation Program A.E. Rodriguez, Ph.D., Chair, Department of Economics and Business Analytics

For inquiries or questions about the Connecticut Economic Activity Report, contact: Anthony Calabro, MBA, Managing Editor acalabro@newhaven.edu

24

CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2022

The Connecticut Economic Performance Laboratory is affiliated with the University of New Haven Department of Economics and Business Analytics. Any opinions contained herein do not reflect the opinion of the University of New Haven or its Pompea College of Business. The Laboratory and the printing of the report are funded by the Pompea College of Business, the Pompea College of Business Advisory Board, and other sponsors of the Laboratory.

If you are interested in supporting this student initiative, please contact Ms. Kimberly Williams, Director of Development, University of New Haven, at kpwilliams@newhaven.edu or +1.203.923.7143.

POMPEA COLLEGE OF BUSINESS 300 Boston Post Road West Haven, Connecticut 06516

Your Success Starts Here AACSB Accredited AACSB accreditation means that our Pompea College of Business has met a rigorous set of standards.

Graduates from AACSB-accredited schools are recognized and generally receive higher, more competitive salaries.

About the University of New Haven The University of New Haven, founded on the Yale campus in 1920, is a private, coeducational university situated on the coast of southern New England. It’s a diverse and vibrant community of more than 7,000 students with campuses across the country and around the world.

Within our colleges and schools, students immerse themselves in a transformative, career-focused education across the liberal arts and sciences, fine arts, business, healthcare and health sciences, engineering, public safety, and public service. More than 100 academic programs are offered, all grounded in a long-standing commitment to collaborative, interdisciplinary, project-based learning.

At the University of New Haven, the experience of learning is both personal and pragmatic, guided by a distinguished faculty who care deeply about individual student success. As leaders in their fields, faculty provide the inspiration and recognition needed for students to fulfill their potential and succeed at whatever they choose to do.

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

25