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As New London County lost lower-paying jobs in pandemic, average wages soared

New London County experienced one of the largest decreases in employment in the country but one of the largest increases in average weekly wages in the third quarter of 2020, according to data the U.S. Bureau of Labor Statistics released last week.

Amid the COVID-19 pandemic, the county experienced an 11.5% drop in employment in September 2020 compared to September 2019, a rank of 342 out of the 358 largest counties in the country. But average weekly wages in the third quarter were up 10.7% over the previous year, the 27th highest percentage of change.

Connecticut economists attribute this to New London County seeing a precipitous drop in lower-wage service jobs, which make up a larger share of total jobs here than elsewhere in the state, but steady employment in higher-wage jobs such as manufacturing.

Patrick Flaherty, acting director of the Office of Research in the Connecticut Department of Labor, said in the third quarter of 2019, jobs in accommodation and food services — which includes casino jobs — made up 7.8% of jobs statewide but 20.2% of jobs in New London County.

That unusually high share in southeastern Connecticut is noteworthy because 58% of jobs lost in New London County from September 2019 to September 2020 were in this sector.

The average wage for the county is $61,000 while the average accommodation and food services wage is $31,000, Flaherty said, so "when you have a huge job loss in a low-wage industry, you're going to see the average wage increase."

While the county shed 9,300 jobs in accommodation and food services, it lost only 214 in manufacturing and 156 in professional and scientific services, Flaherty said, which have respective annual wages of $101,000 and $104,000.

Economist Don Klepper-Smith said that the disproportionate loss of lower-wage jobs in retail and restaurants "promotes more economic polarization," commenting that "coronavirus has not been an equal-opportunity employer."

Klepper-Smith also called the Norwich-New London labor market "highly nuanced," more so than any one he's researched over the last 40 years. He said there's a misconception that there's one Connecticut economy, whereas he argues there are 169 economies — one for each municipality in the state. Southeastern Connecticut has what he calls "very strong niche markets" that include the casinos and Electric Boat.

He called local economic figures a "tale of two cities" in which the quantity of jobs has "been really lackluster" but the jobs that do exist are good-quality ones, as evidenced by the wage growth.

Pointing to EB, he said that workforce development does make a difference and that manufacturing jobs beget nonmanufacturing jobs, not the other way around.

Klepper-Smith has had a close working relationship with the Eastern Connecticut Workforce Investment Board, which he said has "been the most progressive and the most effective of any labor market I've seen in 41 years."

Both Klepper-Smith and EWIB President and CEO Mark Hill pointed to the multiplier effect of manufacturing jobs, with Hill saying that for every job created in manufacturing, 1.55 other jobs are created, and other industries don't have that high a multiplier.

This gives Hill reason to be optimistic, considering EB hired just under 2,000 new employees in 2020 and expects to hire another 2,000 this year, though more than half will be in Rhode Island. The company plans to double its trades workforce in Groton over the next decade, hiring about 600 people a year.

Hill noted that manufacturing jobs were down only 1%, which he considers to be holding steady. He also noted that the placement rate from EWIB's Manufacturing Pipeline Initiative — a free training program that places unemployed and underemployed workers at local manufacturers, mostly at EB — has had a 95% placement rate, comparable to before the pandemic.

The Bureau of Labor Statistics expects to release county-level data on the fourth quarter of 2020 in May.


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