Southeastern Connecticut lags way behind in job recoveries
The Malloy administration's decision to trumpet a report showing that Connecticut has now recovered all of the private-sector jobs it lost during the Great Recession took a hit on several fronts Friday, as economists pointed out that southeastern Connecticut has been left behind in the recovery and that when casino positions are considered, the picture is far less rosy.
The Norwich-New London-Westerly area, which gained 300 positions between October and November, still wound up with 500 fewer jobs last month than were recorded in November a year ago.
The region is the only labor area in the state to have lost jobs over the past year, according to numbers released this week by the state Department of Labor.
It gets worse when looking at the region's recovery since its high-water mark for jobs in May 2008.
Since then, Norwich-New London has lost more than 11,000 jobs — by far the worst performance of any other area in the state, and in percentage terms one of the worst in the nation.
And while Connecticut as a whole has regained nearly 89 percent of all jobs lost during the Great Recession, the Norwich-New London area has recovered only 8 percent of its positions.
"Eastern Connecticut has really dealt with some pretty depressed economic conditions for a substantial amount of time," Pete Gioia, chief economist at the Connecticut Business & Industry Association, said Friday. "It really has to get on the radar soon. People have to start screaming from your area. What's it going to take — another recession?"
But Don Klepper-Smith, chief economist for DataCore Partners in New Haven, said he thinks eastern Connecticut is poised for a turnaround. He pointed out that the region's job base is up 1,000 from its low point in April and said he expects a further moderate recovery over the next year.
"There's no doubt in my mind that southeastern Connecticut is on a legitimate path of economic recovery," Klepper-Smith said. "We're poised for a new period of economic growth."
Klepper-Smith saw hope in some of the new repair work being taken on at Electric Boat, but said he expected smaller sectors of the local economy to lead the way toward recovery.
Already, the region's unemployment rate at 5.2 percent is much lower than last year's 6.6 percent, according to Labor Department statistics released Friday. At its peak, the local jobless rate was more than 9 percent.
"We're starting to get some traction," said John Beauregard, executive director of the Eastern Connecticut Workforce Investment Board.
Beauregard, who pointed out that recovery has been brisker in northeastern Connecticut than locally, said he believes the region's job picture is brighter than some numbers might indicate.
This is partly because he tracks other numbers showing increased local workforce participation despite lagging jobs, a discrepancy he said that could partly be explained by people going out of the area to look for work.
Economists also pointed out that without the nearly 10,000 jobs lost over the years at local casinos because of the recession and increased gaming competition beyond Connecticut's border, the region's job recovery would look more solid — in line with the rest of the state.
"At the top of the list has to be southeastern Connecticut casinos," Klepper-Smith said in explaining the key reasons why the local economy has suffered over the past seven years.
The other two main issues, he added, were the downsizing of local Pfizer Inc. operations when the company closed its huge research-and-development headquarters in New London and related issues with the local housing market.
"Right now, the one area of the state that's taking it on the chin is southeastern Connecticut," Klepper-Smith said.
Not so coincidentally, Klepper-Smith said, Malloy conveniently left out government jobs when he declared a full recovery for the state.
Casino jobs that affect southeastern Connecticut more than any other part of the state are included under the government heading through a quirk of data sorting because the gaming meccas are run by local Indian tribes.
"You can't cherry-pick the data," Klepper-Smith said in a phone interview, adding in a note to clients: "this was a pretty blatant attempt to skew the jobs data and make it look better than it is."
CBIA economist Gioia pointed out that the 5,100 jobs added statewide last month constituted one pretty good report that followed two pretty bad reports.
Citing stiff small-business taxes and other policies that discourage growth, he said the bottom line remains that Connecticut still is way behind the national economic recovery.
"Our problems are not problems caused by outside conditions," he added. "Our problems are self-inflicted wounds."
Peak jobs: 139,100 (May 2008)
Low point: 126,600 (April 2015)
November jobs: 127,600
Jobs recovery rate: 8 percent
State recovery rate: 89 percent
SOURCE: DataCore Partners