Now that the charm of suburban life has worn off, companies are following their workers and moving back to cities.
An FKD Feature exclusive

Following World War II, there was a massive corporate shift from cities to suburbs.

Between 1955 and 1980, more than 50 corporations also left New York City. Following promises of company tax breaks, IBM, Gulf Oil, General Electric, PepsiCo, U.S. Tobacco and many others chose to head for smaller cities and suburbs, and ultimately drawing workers out.

However, the appeal of suburbia wore off for many people and companies over the last 50 years.

Companies are no longer saving money by being in isolated, suburban areas. They can’t hire the workers they want because high-earning workers now want to live in cities. So companies are now following workers.

A prime example of this shift is what’s been happening in Connecticut.

Connecticut built its wealthy economy on large businesses, luring them out with tax breaks and incentives that just kept coming. Because of this, Connecticut held the title of the wealthiest state in America for quite a while, and though it’s no longer true, it still maintains that reputation.

Though it remained financially appealing for several decades, the state has recently seen a huge shift in stability as companies including General Electric and Aetna have decided to leave for other states with better metropolises.

There has been an immediate change in income tax. The contribution of the state’s hundred biggest earners recently fell by 45 percent. Connecticut’s tax income receipts are experiencing their first major decline since 2009, when the state fell into the Great Recession.

Connecticut’s problems also go beyond taxes. Its housing markets have been some of the hardest hit in the United States and the state’s job growth has been dismal. Fairfield, Hartford and New Haven have each seen declines in home worth, and all three have remained in the bottom 25 cities for post-recession job growth.

Metropolises in Connecticut haven’t been doing well for quite a while. Suburban separatism in Connecticut has exacerbated the class and race-based divisions that already existed in its cities. Tensions have left Connecticut’s urban areas in depressing and concerning states, which are only being worsened by the absence of big companies and jobs.

This leaves Connecticut at a sort of identity crossroads — should the state be trying to cut taxes even more, or should it just rebrand altogether?

With struggling midsized cities and notable gaps in wealth, Connecticut is crumbling without the powerhouse companies that it once relied on. Large cities are once again becoming places that companies want to be, leaving suburban oriented places, like Connecticut, in the industrial dust.


In the age of globalization, cities and states must constantly compete with each other, giving their citizens and corporations a reason to be based there. It isn’t advantageous for a company to have a huge but isolated headquarters anymore when small offices in many cities are more useful.

Connecticut offers dilapidated cities and affluent suburbs, leaving it without a desirable middle ground. Millennials make up the largest living demographic, but most of them don’t want to live in a run down city but can’t afford an upscale suburb.  

In order to appeal to new blood, Connecticut needs to rethink its systems. Policies need to be updated and urban areas need to be revitalized, or people will continue to flee the state.

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Header image: Adobe Stock



Posted 06.19.2017 - 01:18 pm EDT