Stimulus funds retrain 350 jobless here, report says

More than 350 dislocated workers from eastern Connecticut secured employment over the past three years after receiving retraining paid for by federal stimulus funding, according to a report released Wednesday.

The $1.18 million in funding that the region received through the American Recovery and Reinvestment Act resulted in more than $23 million in economic activity, said the study compiled by the Eastern Connecticut Workforce Investment Board, which administered the retraining programs.

In addition to $12.6 million in direct wages, according to the study, the funding spurred $10.5 million in indirect economic activity and 229 additional jobs in the region. The additional jobs were created because of so-called multiplier effects, meaning each position creates residual benefits that show up throughout the economy.

"These results show an early pay-off 4 percent higher than in national studies," the study said - proof, according to U.S. Rep. Joe Courtney, D-2nd District, that the region used stimulus money wisely.

Don Klepper-Smith, chief economist and director of research at DataCore Partners, a contributor to the report, noted that eastern Connecticut, especially the Norwich-New London market that includes Westerly, has endured a much more difficult labor situation than the rest of the state and nation. Several hundred layoffs or losses by attrition have been announced over the past few years at major employers such as Pfizer Inc., Electric Boat and the Mohegan Sun and Foxwoods Resort casinos.

A report this week in The Hartford Business Journal stated that the Norwich-New London area had officially emerged from the Great Recession that most of the country had shaken off by 2010 just this past December.

"While the rest of the state is more than two years into the economic recovery," according to the report, "southeastern Connecticut just emerged six months ago."

The report, based on newly released statistics from the state Department of Labor, noted that southeastern Connecticut lost 12,300 jobs during the region's 43-month recession that was nearly double the length of the statewide downturn. The Norwich-New London area is currently 11,800 jobs below its employment peak four years ago, and its unemployment rate of 8.2 percent is half a percent higher than for Connecticut as a whole.

"Rebuilding a job base after significant erosion occurs must literally be approached one job at a time, and every job counts, so these re-employment efforts are critical to our path to recovery," Klepper-Smith said in a statement.

According to the study of retrained workers who faced layoffs with little chance for re-employment at the skill level they had at the time, 440 completed training, and 80 percent of those found a new job - double the national average for those who became unemployed during the recession.

Local workers averaged annual pay of $36,843 in their new jobs, a bit above the national average and considered to be impressive considering that more than half were forced to change industries because of structural changes in their fields of experience.

"If you are able to stay in the same industry ... you have a much better chance of replacing your former wage," John Beauregard, executive director of the Eastern Connecticut Workforce Investment Board, said during a press conference at the agency's Franklin headquarters.

"National reports show that on average, workers who are forced into a different industry due to downsizing in their field are likely to experience wage losses that are double those of their peers who stayed in the same field," according to the study.

The study of local workers showed lost wages upon re-employment among all age groups, but those 50 and over were hit especially hard, losing 16 percent of their original pay after finding a new job. Workers in their 20s and below, on the other hand, found their wages virtually unchanged.

Those involved in professional and technical services were able to retain more of their original earning power, while people in the retail field fared the worst upon re-employment, the study of local workers found.

Overall, the retrained workers lost almost 13 percent of the earning power they had before losing their job.

"There was a clear pattern that showed when skills used in a worker's prior position can be upgraded to reflect current technology, reasonably successful outcomes could follow," said Beauregard, the workforce board official.

In a nine-month follow-up, 89 percent of the retrained workers who found jobs were still employed, the study said.

Beauregard said that without additional federal money to retrain workers in the future, his agency will be hard-pressed to make the kinds of strides in workplace readiness and economic stimulus show in the study released Wednesday. The workforce board, which runs four jobs centers in eastern Connecticut, will need to rely more on online training, he said, which has limitations compared with classroom education.

Rep. Courtney said the study results speak to the need for more federal efforts to spur job creation.

"This is a very powerful argument we are bringing back to Washington," he said during a press conference.

l.howard@theday.com

STUDY FINDINGS

• 353 out of 440 dislocated workers who went through training found new jobs

• The $1.18 million investment netted $23.1 million in regional economic activity

• Retraining led to 229 indirect new jobs related to the economic stimulus created by the retraining

• 80% of retrained workers locally found new jobs, twice the percentage nationally of dislocated workers seeking jobs who didn't receive retraining

• Retrained workers who found jobs retained 87.1 percent of their original earning power

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