At the end of next year, Aetna, one of the companies that made Hartford the insurance capital of the world, will move its headquarters to Manhattan. The decision may be disappointing to Connecticut residents, but it’s another sign that old-line Fortune 500 companies that once shunned major metropolises are coming back.
In addition to Aetna, GE and UBS are moving employees out of the Nutmeg state, and for several reasons. It doesn’t have sunny climate like Arizona or Florida; it also isn’t as unregulated as Alabama or Delaware. Connecticut cut corporate tax rates, and now has the lowest total effective tax rate in the country, but the state ended up becoming highly dependent on large companies and the income taxes from their employees.
The other big issue at hand is the country’s revived interest in cities. For example, GE left Midtown in the 1970s and built a suburban campus in Fairfield County, but it’s now going to Boston. These companies are having trouble attracting the top talent because the suburbs or small cities like Hartford don’t offer the quality of life that was once desirable. It also has to do with women in the workforce—it’s hard to bring in someone from outside to a place like Hartford, where the job candidate’s spouse may have a hard time finding a job. It’s much easier for two-earner families to find jobs in Boston or New York.
Slate staff writer Henry Grabar spoke with WNYC’s Richard Hake about the future of the suburban tax incentive, and what Aetna’s move might mean for New York City.
Date:July 05, 2017