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Connecticut's Unemployment At 15-Year High

state labor

By JANICE PODSADA | The Hartford Courant

December 19, 2008

The unemployment rate in Connecticut rose to 6.6 percent in November, the highest level in 15 years, the state Department of Labor reported Thursday.

The state lost 5,100 jobs last month, a figure that rivals the monthly losses of August 2000, when the state lost 5,300 jobs, and October 2002, when the state lost 4,800 jobs, both as a result of the last recession, which began in mid-2000 and lasted through 2003.

Job losses have been mounting in recent months: Since September, the state has lost 11,300 jobs. And another study released Thursday showed that Connecticut has more people in long-term unemployment than the national average.

"The national recession has really caught up to us and pulled us down," said state labor economist John Tirinzonie.

The state's nonfarm employment fell to 1,693,400 last month from 1,698,500 in October. Compared with a year earlier, on a seasonally adjusted basis, the state has lost 10,500 jobs since November 2007.

Nationally, the unemployment rate rose two-tenths of a percentage point, from 6.5 percent in October to 6.7 percent last month, while the state's unemployment rate rose from 6.5 percent in October to 6.6 percent last month. The last time the state's unemployment rate was 6.6 percent was June 1993, the tail end of the recession that lasted from 1989 through 1993, a period in which the state lost more than 150,000 jobs.

"The numbers are disconcerting, but not unexpected. We were expecting a minimum of 3,000 job losses," said Don Klepper-Smith of DataCore Partners LLC in New Haven, who is chairman of the Governor's Economic Advisory Panel.

Klepper-Smith has predicted that Connecticut will lose a total of 60,000 to 80,000 jobs by early 2010. That will challenge not only workers and their families, but state government.

"When people start losing their jobs, they not only lose their ability to pay their bills, but they lose their ability to pay their taxes, which becomes a concern to states and municipalities," Klepper-Smith said. "We've got a domestic recession that's taking on greater definition and stands to get worse before it gets better."

Of the state's 10 major industry sectors, seven lost employment and two were unchanged, the labor department report said.

Only one sector — educational and health services — showed a gain, adding 600 jobs after losing 1,100 in October.

The largest loss occurred in the trade, transportation and utilities sector, which lost 2,500 jobs, a figure that accounted for nearly half of last month's total job loss.

The state's manufacturing sector lost 900 positions last month. Since November 2007, the sector has lost 3,400 jobs, or 1.8 percent of its labor force. While the percentage is still lower than the national figure of 4.5 percent, the state's manufacturing sector continues to announce mass layoffs.

On Monday, the 241 nonunion factory workers left at the DriveSol Worldwide Inc. car parts plant in Watertown received notice that they would lose their jobs as early as two months from now. The plant, which designs and builds steering wheel shafts for the car industry, is scheduled to close by March 15.

The Watertown plant, which employed as many as 780 two years ago, has had drastic layoffs due to a continuing drop in car sales. Plant officials said the company is also closing a plant in Kendallville, Ind., and its U.S. headquarters in Troy, Mich.

Watertown plant Manager Gabe Rosa said he is now in the process of alerting the company's customers, including the major car manufacturers Chrysler, General Motors and Ford, of the plant's closure.

"We're working with all of our customers to find someone else to make their parts," he said.

Rosa began working at the plant 19 years ago, when it was still owned by the Torrington Co., once a landmark business in Litchfield County. Timken Co. acquired the plant and a facility in Torrington in 2003 for $840 million, then sold the Watertown plant three years later to DriveSol.

"The writing has been on the wall," Rosa said. "We've been slow because of the downturn in the automotive industry. It's not like we haven't been feeling the pain for the last six months. This year has been absolutely brutal."

The plant provides parts for about 12 car manufacturers, he said.

The incidence of long-term unemployment in Connecticut is higher than the national average, according to a study released Thursday by New Haven-based Connecticut Voices for Children. More than 20 percent of the state's unemployed have been out of work for more than 26 weeks, compared with the national average of 17.6 percent.

The study also found that Connecticut's unemployment rate is characterized by significant racial and ethnic disparities. The state's unemployment rate for minorities is more than twice as high as the unemployment rate among whites. Unemployment among minorities averages about 8.5 percent, compared with 3.5 percent for white workers, the report said.

"This is a dire economic and fiscal situation," said Douglas Hall, acting managing director of Connecticut Voices for Children. "We're bracing ourselves for what looks like a pretty difficult legislative session. We're looking at deficits down the road of over $3 billion."

As a result, he said, policymakers may be tempted to close the gap by cutting human services.

"There's a major temptation to be penny wise but pound foolish," Hall said. "That's not what Connecticut needs right now. To restore economic prosperity ... we need to step up supports for families during a recession, not undercut them and create a downward spiral."

Courant Staff Writer Lynn Doan contributed to this story.