One of Connecticut’s largest unions, AFSCME Council 4, is pressuring Gov. Ned Lamont, along with Sen. Paul Cicarella (R-North Haven) and Rep. Mary Mushinsky (D-Wallingford), to intervene in stopping the planned layoffs of 49 federally funded, temporary employees at the Connecticut Department of Labor (CTDOL).
In a call to action posted on AFSCME’s website on Oct. 15, the union argued that “these layoffs are NOT due to a shortage of work,” claiming that these workers are still essential as job growth has “severely declined nationally.”
AFSCME also painted a grim picture, warning that “a recession is anticipated soon” and suggesting that Connecticut’s government is ill-equipped to handle an economic downturn when it materializes.
According to the union, there are currently more than 8,000 pending unemployment insurance (UI) cases, which will only increase the backlog if the employees are laid off.
Moreover, claimants may have to wait three months or more for their cases to be adjudicated with the loss of these employees.
However, CTDOL is challenging AFSCME’s narrative. In an email to Yankee Institute, Juliet Manalana, CTDOL Communications Director, addressed AFSCME’s claims, revealing that the positions in question were always considered temporary because they were funded by federal pandemic relief dollars that are now expiring.
“CTDOL has approximately 50 federally funded contract positions that expire at the end of this year,” the department stated, adding “the ‘end of assignment’ is standard for durational workers paid through specific grants or temporary funding streams.”
CTDOL acknowledged the valuable contributions of these workers, who helped reduce the Appeals unit backlog from 21,000 claims to around 7,800 and cleared the pandemic unemployment benefits application backlog. Additionally, the department offered to provide job search and placement assistance to these workers once their contracts conclude.
In response to the union’s assertion of an imminent recession, CTDOL pointed to current economic indicators that suggest stability. “Read the monthly labor situations on our press releases page,” the department advised, highlighting that Connecticut’s economy is “stable and steady” with low unemployment benefit filings, a low unemployment rate, and over 80,000 job openings statewide.
Indeed, since the positions were federally funded, extending their employment would shift the financial burden of wages, pensions, and costly healthcare plans directly onto Connecticut’s taxpayers.
However, if AFSCME’s recession warnings are accurate then their alarm ironically strengthens recent calls for a state employee wage freeze, giving lawmakers a strong reason to embrace fiscal restraint in these uncertain times.
Financial expert and nationally recognized columnist Red Jahncke proposed the idea of a state employee wage freeze in his Sept. 5th column, arguing that it’s essential for addressing Connecticut’s unfunded pension liabilities.
According to Jahncke, Connecticut’s pension crisis shows little sign of improvement, despite billions in extra payments into the State Employee Retirement System (SERS). Under the state‘s spending reforms known as the “fiscal guardrails,” excess revenues from volatile sources, like the pass-through entity tax, are directed into the Budget Reserve Fund ( or “Rainy Day Fund”).“
Once the fund hits its legal cap, the excess money is used to pay down debt, including pensions. Yet, despite these measures, SERS’s financial health has barely budged.
When Gov. Lamont took office, SERS faced a $21.2 billion unfunded liability. Five years and billions in extra payments later, that liability has only dropped by $1.1 billion to $20.1 billion — just a 5% improvement over five years, or 1% per year.
“At that pace, SERS will not reach full funding until the 22nd century,” Jahncke wrote.
Jahncke also noted that pension liabilities are directly tied to wages, meaning as wages go up so do pension payouts. Since Gov. Lamont took office in 2019, Connecticut’s state employees have received multiple raises that when compounded together comes to a total increase of 33%. In his column, Jahncke provided an example: if a state employee earned $100,000 in 2019, that same person now earns $133,000. Conversely, national private sector wages have risen by just 23.5% during the same timeframe.
Furthermore, Jahncke wrote, “Not only that, but unionized state workers’ wages have outpaced inflation by 8% over this six-year period. The Consumer Price Index (CPI-U) is up 25% since January 1, 2019, according to the CPI Inflation Calculator on the BLS homepage.”
Ultimately, Connecticut’s state employee never ending wage hikes means our pensions debt is unlikely to be fully paid anytime soon. Freezing wages now will not only help stabilize the pension system and prevent an even greater strain on Connecticut‘s taxpayers but it will ensure that state employees, like private-sector workers, share in the responsibility of weathering economic hardship during the recession AFSCME claims is coming.
AFSCME’s demands are completely irresponsible, as they push for increased spending while the economy is likely, according to them, going to endure a recession.
In times of economic uncertainty, a responsible approach would be to prioritize essential spending, not lock the state into commitments that risk future fiscal stability. Yet, the union’s apparent disregard for the financial burdens it could create demonstrates that their primary concern is to protect union members from an economic crisis at the expense of state taxpayers.
