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Connecticut Rebound: Higher-Paying Jobs Start To Stir

Low-Wage Gains Marked Recovery Until Recent Months

Mara Lee

May 22, 2011

The strong hiring across the country and in Connecticut last month came as a relief, but the mix of jobs being created shouldn't be forgotten in the glow of the good news.

"Last year, we were seeing very unbalanced growth, with most of the job growth coming from mid- and especially low-wage industries," said Annette Bernhardt, who has studied the job gains as policy co-director of the National Employment Law Project. "In the last few months we're starting to see growth pick up in some of the higher wage industries that last year were still continuing to lose jobs."

In Connecticut from 2010 until April, the job gains were disproportionately in temp agency hires and retail, which are largely low-wage, and in health care, which carries a mix of pay levels.

"On average, we were adding poor-quality jobs. That was the same as the national pattern," said economist Fred Carstensen, director the Connecticut Center for Economic Analysis at the University of Connecticut.

The recession job losses were heaviest in fields with lots of well-paid workers — insurance and finance — and in areas with lots of solid middle-class jobs, like construction, real estate and manufacturing. Industries that fall in the top third of salaries sustained 40 percent of the job cuts.

Since the start of 2010, improvement has been slow in total numbers of jobs, and even worse when it comes to replacing the best jobs that were lost. Nationally, through January of this year, just 14 percent of the jobs gained back were in high-wage industries, but February, March and April were better, and now 24 percent of the hiring has been in the best-paying industries.

Connecticut began adding jobs at the start of 2010, and since then, employers in the state have added back 31,000 positions — better progress than the nation as a whole. Still, that's only 26 percent of the hole the recession blew in the state's labor market, well below the pace of recovery of most previous recessions.

The experience of a few unemployed workers in information technology in Connecticut, and the perspective of their would-be employers, illustrates the problem in high-wage areas.

Mike Krenesky, of Beacon Falls, was one of tens of thousands of Connecticut's high-wage workers who were downsized. He worked for an India-owned company that writes specialized software that helps companies such as Pepperidge Farms manage sales and inventory.

His company had programmers in India and sales employees in Norwalk, including Krenesky, a project manager for about four years, who made more than $85,000 a year. His department was eliminated in October 2009.

It was the third time he'd been downsized since he began working in IT 30 years ago, but this job hunt has been nothing like the others. When he was laid off from IBM in 2002, it took him six months to find a new job in Wallingford, though he took a 13 percent pay cut. When he was laid off from the Wallingford company when those jobs moved to Atlanta, in 2005, it took him five months to get the Norwalk job, and he was able to get the same wage.

Now, at age 59, he says on Internet job sites that he'd be willing to take a job that pays $65,000. He's gotten some in-person interviews, but no offers. He's willing to take a $15 an hour as an Apple Genius if the New Haven store opens, but not for the same job they've offered him in White Plains.

A recruiter has found Krenesky a six-month consulting gig in New York that is pitched as a temporary-to-permanent opportunity, paying $60 an hour, which he will apply for.

"I'm feeling more positive that the opportunities are growing out there, but I'm not much more than 60 percent enthused with where things are," he said. "I think the real challenge right now is the long-term unemployment. I've had three separate recruiters now [say] 'Oh, you've been unemployed longer than six months? I'm sorry, we can't market you.'"

Seeking The IT Job

In February, Cisco Systems held an IT job fair in Farmington with six local firms, drawing more than 200 people for a total of 30 openings.

Of those six companies, four hired people, including East Hartford's Kelser. The 42-person company was looking for three networking specialists and three sales people.

Tom Sharp, Kelser's vice president of sales, said the company has given an offer to one Connecticut man who had been working as an independent consultant, and is expecting to hire two more people who are in technical school working toward their Cisco certification. Entry-level network engineers generally make in the low $40,000s, Sharp said.

He said that at the job fair there were many people who had more networking expertise, but that "they were a little higher than we were looking to bring on."

The more than $40,000 gap between the hire Kelser made and Krenesky's last salary shows that an analysis of the wages of new jobs by looking at industry growth is dicey, which NELP economists recognize.

Kelser, which has 40 employees in the state, up from 36 a year ago, still wants to hire those three sales people, even though Sharp said none of the candidates at the job fair was the right fit.

"I didn't think it'd be this hard, but given what I'm looking for right now, the right experience, the right presence, I'm trying to be a little more picky right now," Sharp said. He said he wants someone with three years of technology sales experience.

Edwin Atiles drove up from Fairfield to that job fair, hoping to break into IT sales. Atiles, 44, spent 11 years in sales with Russ, a company famous for making stuffed animals and other tchotchkes sold at Hallmark stores. He was laid off from his regional manager over sales people at the end of 2007, and then worked in a commission-only position selling furniture to small stores until the end of 2009, when 40 percent of his customers either went out of business or stopped adding to their inventories.

Since he's been self-employed, he has made about half of his pre-recession income.

"I am blessed. The week I lost my job, my wife got a contract. She's been carrying the torch," he said. Atiles' wife is a makeup artist on TV and movie productions in New York.

In February, he said, "I'm planning to stay in sales, and hopefully change industries. Technology is where it's at."

But on Thursday, he said he has not found companies open to training him to sell IT products.

Stalking The Giants

Connecticut's high wages have a lot of explanations — the fact that more workers here have college degrees, the higher degree of unionization in health care and manufacturing, the concentration of insurance and finance jobs and proximity to New York City, to name a few.

Another reason is that more people work for large corporations, and those companies often pay more than medium-sized and small companies.

That reliance on the big boys, like United Technologies Corp., Travelers, The Hartford and Aetna, has a down side, however.

"The problem in Connecticut — Connecticut is more dependent on large employers than any other state," said Carstensen. "On average, large employers are job destroyers, not job creators."

A roundup of large companies that dominate Hartford's business scene shows that's true. While CIGNA is up 126 jobs in the last year, Travelers and UnitedHealth Group are flat, The Hartford is down 800 from the end of 2009 through the end of 2010, Aetna shed more than 800 jobs from the end of 2008 through the end of 2010.

UTC won't say what the net result is from shrinking hundreds of production jobs while adding hundreds of engineers and other white-collar workers in the state in the last year.

"We need to get more firm creation in Connecticut," Carstensen said. He said the governor's plan to subsidize a major expansion of research at University of Connecticut Health Center in Farmington will generate a lot of those startups.

Genevieve Aurieli, of Rocky Hill, has spent her entire career in the IT departments of Connecticut's giant companies, starting at Pratt & Whitney and then Aetna, with her last job as a front-line manager of database administrators. She was cut in December 2008, when Aetna eliminated 375 workers in Connecticut.

In just three months, she found a new job at virtually the same wage at CIGNA, again as a front-line manager of database administrators, but she was laid off in November, a year and nine months later.

"They're trying to get rid of some management layers," said Aurieli, 47.

Since her second layoff, she's had three in-person interviews, though two of jobs ultimately were not funded, and has another scheduled for next week, all with big companies, all in management work — but she said her technical skills aren't up-to-date enough to compete for database administration jobs, even if she wanted to take a step back in her career.

She said the biggest areas of growth in IT in Connecticut are in security and in consulting. Of the laid-off IT professionals she knows, 80 percent that have gotten hired again have become independent consultants. "A lot of people aren't hiring employees," she said.

Contact Courant Reporter Mara Lee at maralee@courant.com, and find her on Twitter at MaraLeeCourant.