Connecticut’s High-Wage Jobs Still Lag
The latest Connecticut Economic Digest (March 2016), which reports on jobs and unemployment by sector from 2006 to 2015, reveals continuing weakness in the state’s labor market.
The news is more telling in the details rather than in the aggregate. Connecticut’s slow recovery shows a new and growing problem in job quality.
Key examples are in the growth of lower-wage jobs and continued poor recovery of higher-wage jobs.
From 2006 to 2015, for example, leisure and hospitality grew from 132,600 to 151,500 jobs, while high-paying financial services jobs are still down from 144,300 in 2006 to 130,000 in 2015.
Retail is fairly flat (184,300 jobs in 2015, down from 191,300 in 2006), but manufacturing dropped from 193,000 jobs in 2006 to 159,000 in 2015.
Jobs with good benefits and incomes ranging from $50,000 to $250,000 are being replaced with jobs that pay well below $50,000 and offer few or no benefits.
Purchasing power, home ownership, and tax revenues have all suffered in the shift.
Connecticut's slow recovery shows a new and growing problem in job quality.
Take Connecticut's unemployment rate, now at 5.5%. While that’s better than 9.1% unemployment in 2010, it’s not the low 4.3% we saw in 2006.
On the other hand, U-6 unemployment statistics (which count discouraged workers and part-timers who desire full-time work) have improved from 15.4% in 2011 to 10.9% in 2015.
I’m expecting more good news in this area, as our average weekly initial claims for unemployment are now the lowest in the 10-year period.
In sum, we have more work to do than just recovering jobs. We need to encourage investment that creates high-paying jobs in Connecticut.
Pete Gioia is an economist with CBIA. Follow him on Twitter @CTEconomist.
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