Low-wage workers suffer from economic downturn due to COVID

One hundred and forty days have passed since Denitra Pearson lost her job caring for the elderly in their homes. Forty-two days have passed since she, her husband, and children lost all their belongings after a fire engulfed their house on a snowy winter night.

They’re now living in a hotel.

Fast food and non-perishables are their primary diet. There’s no kitchen in their small living quarters.

Although a Section 8 housing voucher ensures they can pay rent, they can’t find an apartment within their budget that isn’t infested with mice or mold.

Pearson, a New Haven mother of six, has an associate’s degree and two job certificates but only one of the dozens of applications she’s filled out has led anywhere, landing her another low-wage job at a local clinic vaccinating people against COVID-19. Her husband, who was a chef at a nearby university before the pandemic disrupted the college campus, is still looking for work.

“I don’t wish that on my worst enemy, like ever. This is insane. Hotel [living] is not the life,” Pearson said.

Pearson — and many other low-wage families — are waiting for the economic recovery to reach them.

Of the nearly 300,000 jobs lost almost overnight when the pandemic hit Connecticut last March, about 58 percent have returned, a figure that has not seen any appreciable improvement since September, just as the number of unemployed remains largely unchanged.

The brunt of this downturn, however, is primarily falling on certain families and neighborhoods.

While unemployment rates for Connecticut workers who were making more than $60,000 a year before the pandemic have almost entirely rebounded, employment among those who were making low-wages was still down 28 percent through the first week of February. Unemployment claims are similarly lopsided toward poor residents.

Communities that were already struggling with poverty before the pandemic were hit particularly hard when the jobs vanished. While the federal stimulus dollars and expanded unemployment benefits have helped sustain many households and small businesses in the short-term, more people than ever are relying on food pantries, racking up debt, withdrawing money from their retirement, or putting off paying rent to get them through.

“What this pandemic has done has just really exposed and magnified some of the issues that we already knew were there. But now, you can’t ignore it. You can’t ignore businesses closing at alarming rates. You can’t ignore students that are off track,” said AJ Johnson, the pastor of the Urban Hope Refugee Church in Hartford’s North End and a community organizer with the Center for Leadership and Justice. “It just has exposed and magnified things in a way that the world can see it.”

That attention is fading, he worries.

“A year later, people are starting to move and start to get their lives back together and working has become a real thing — and so it becomes a distant thing of the past,” he said. “I’m afraid that we might miss a moment — where when we say ‘Black Lives Matter’ and really matter — I’m afraid that we are driving by that moment to do something really substantial.”

In an effort to keep the spotlight on this issue, numerous grass roots groups and labor organizations have joined together to host rallies and voice displeasure with the state’s uneven recovery.

“Poor people demand justice” proclaimed a 4 foot tall sign held by two New Haven moms outside the Governor’s Residence during a Feb. 20 rally hosted by the “Recovery for All” coalition.

The same coalition last week hosted a rally in Danbury. There, a teacher of Spanish speaking children shared the story of how the mother of one of her students recently showed up on her doorstep, out of work, and attempting to sell jewelry so she could buy food.

Open for business?

It’s unclear just how many companies have gone out of business in Connecticut since last March. The state’s business closure data is not meant to measure business levels.

However, the number of small businesses that are open is drastically down. In low-income neighborhoods, small businesses that are open now compared to last

March is down by 37 percent compared to 34 percent in middle-class communities. This typically private financial transaction data collected by Harvard Economist Raj Chetty’s team shows no noticeable gains in businesses reopening since the vaccine rollout. The U.S. Census Bureau’s bi-weekly surveys of small business in Connecticut also indicates more companies each week are reducing their workers’ hours than increasing them.

Retail vacancy and foottraffic data collected by some municipalities and local business organizations also offers some clues.

In downtown New Haven, businesses being able to partially reopen last June helped, but foot traffic has lingered at 65 percent below its pre-pandemic levels ever since. Several of the businesses didn’t survive, and by the fall, one out of every five storefronts downtown were vacant, according to the city’s deputy economic director.

“We did see an immediate bump in our pedestrian statistics — and then it plateaued, and that’s kind of where we’ve stayed,” said Win Davis, the executive director of New Haven’s Town Green District, which tracks foot traffic.

In downtown Bridgeport, one out of every eight ground floor businesses, which are most often retail establishments, were vacant before the pandemic. Now it is one-in-six.

Nationwide, retail foot traffic is down by nearly 60 percent, with cities seeing much sharper declines that suburban communities, according to Springboard, a company that measures pedestrian traffic by installing small electronic devices in communities around the country, including a handful in Connecticut. The firm’s research also shows that shoppers are more than twice as likely to shop at an outdoor shopping mall during the pandemic than a downtown area.

Some attribute the exponentially higher unemployment rates among city residents and low-income residents to the drop-off of retail and hospitality jobs that were once fueled by customers who are now working from their suburban homes. In Bridgeport and New Haven, about half of the pre-pandemic workforce commuted from the suburbs. In Hartford, two-thirds of commuters traveled from the surrounding towns.

“Places like Hartford were struggling before in terms of economics — and with people working from home, Hartford doesn’t work. Hartford’s economics are just not working,” said Johnson. Hartford — which had the second highest unemployment rate in the state with one out of every eight people out of work in January — is home to numerous state office buildings, and many state employees continue to work entirely from home. “A lot of our income comes from people driving in. … The minute we shut down businesses and state buildings and workplaces, you begin to see the real economy in Hartford.”

This downturn is showing up in the state’s unemployment numbers.

Each week, 2.5 times more newly unemployed workers are applying for the first time for benefits — 3,250 people last year compared to about 8,200 now. And four times as many people are requesting their unemployment benefits be extended another week — that’s 176,000 weekly claims now compared to 42,400 a week pre-pandemic.

Restaurant workers have seen the sharpest declines in the workforce, a population that tends to be low-income and disproportionately Latino, according to census data.

“I think that when large organizations in downtown New Haven bring their workforce back downtown, we will certainly see things improve,” said Davis, pointing out that City Hall and Yale employees are still mostly working remote. “A percentage of everybody’s workforce seems to be kind of missing from downtown so I think one of the things that will truly help us is when everyone is comfortable enough to come back to work.”

Connecticut has one of the highest rates of workers teleworking still. The U.S. Census Bureau reports that at least 46 percent of employees in Connecticut are teleworking — a rate that hasn’t budged since September, when the bureau first started tracking it. In Connecticut, high wage earners in March were teleworking an estimated 4 times the rate of lowwage workers.

A full return to the office is still a ways off for many businesses, however.

Chris DiPentima — the leader of the state’s largest business organization, the Connecticut Business & Industry Assocation — said in the upcoming months about 50 percent of businesses whose employers are working remotely are expected to return full time, 25 percent part-time, and the remainder will continue to work remotely.

“So a good portion will come back into the office, either full-time or at least a hybrid way. But, it’s still going to jeopardize the commercial real estate that we have. We don’t know for sure which businesses fully returned. We’re hearing some talking about July, others talking about September or October, so I don’t think we have a real good assessment of what that means to commercial real estate in our cities,” he said. “When we do reopen, we [need to to be] able to grow our cities, because the state will only be as successful as our cities. So that’s gonna be critical.”

A survey conducted by CBIA of 3,200 businesses throughout the state in January found that 24 percent were operating with reduced hours and capacity and 35 percent have laid off staff as a result of the downturn.

In Bridgeport, the leader of the city’s downtown district said she has been told by several property owners that they are expecting most offices to return “somewhere around June.”

“That foot traffic is really important for many of our downtown businesses,” said Lauren Coakley Vincent, the presidents of the Bridgeport Downtown Special Service District. “We really look forward to the near future when, for example, bars are able to reopen and get back to kind of businesses normal and have daytime office workers return to their workplaces.”

In the meantime, the rate of vacant storefronts in Connecticut’s largest cities are higher than both the overall New England regional figure, as well as other downtown districts in the region.

“We thought at the beginning, ‘Oh, we can sustain. A month of this will be still a hit but we’ll make it through. And then as the pandemic raged on, by the summer we just, we couldn’t. We couldn’t go any further, unfortunately,” said Marcella Kovac about having to close her co-working spaces in Bridgeport and Southport. “It was, of course, emotional. We really put a lot of our own blood, sweat, and tears, especially early on. It was very much bootstrapped and then as the business started to grow we really had very high hopes for it to continue to help people wanting to set up shop in Bridgeport get their first step and we saw such a positive impact. … It was so sad to not only have to close the doors to Bridgeport, which we had grown for seven years, but also to sort of close the doors to that dream.”

The space remains vacant today.

Who and where the pandemic is economically impacting is apparent to Glendowlyn Thames, chief operating officer of the state’s Department of Economic and Community Development. If employees start to return to their offices, it will have an impact.

“What will the environment look like in six months? Is it going to look like January 2020, or is it going to look like more of February 2021? And what are going to be those permanent changes as a result of COVID?” she said. “The pandemic significantly impacted low- to moderateincome workers and people in communities of color, and it exacerbated sharply the issues that were long standing — and now are glaring right in everybody’s consciousness. We’re really trying to focus on how do we use our resources wisely to really be targeted and intentional because we know where the pain is and where the bleeding is happening.”

Labor-force drop outs

A host of reasons are keeping people home and unemployed, including child care challenges and health concerns.

In Connecticut, 150,000 students have not stepped into a classroom this school year — either because schools are not open or because their families are too worried about the virus to send them back — Gov. Lamont told business leaders earlier this month.

“Our job now is to get the kids who are reluctant back into school, just like their parents who are reluctant, to get them vaccinated,” said Lamont, a Democrat.

As more schools welcome students back full-time and the number of vaccinated adults grows, Lamont anticipates more people will return to work.

Pearson’s three sons and two daughters returned to school in New Haven last week ahead of her starting her new job.

‘They needed to get out of this hotel and see their friends and get their minds off of what’s going on here,” she said.

For Gina Pavao, the fact that Meriden offered her son and daughter a full return early in the school year meant she could return to work as a cashier at the SaveA-Lot convenience store in town. Her son and daughter missed their friends and their grades were plummeting as she struggled to help them do their work at home. She was also not getting as much in unemployment compensation as she would have earned working after the $600-a-week unemployment boost was scaled back to $300. The Federal Reserve estimated that even with the $600 boost, the wages of 16 percent of low-income workers still shrunk.

“I had to stay home and watch the kids, and it was a lot. It was a lot,” she said. “I went back to work when they went back to school.”

Meriden is one of the few high-poverty school districts in Connecticut that enrolls mostly Black and Latino students and has been open full time the majority of the school year. The state’s two largest school districts decided not to return until recently. Bridgeport is slated to return full time next month, while New Haven began offering the option of inperson learning for elementary students in late January and middle school students in early March.

But many have grown discouraged by the job market or don’t yet feel it’s safe enough to return.

The state’s 8.5 percent unemployment rate — which is twice as high as it was before the pandemic — doesn’t account for these labor-force drop outs. Participation in the workforce among those over age 16 dropped from 67 percent pre-pandemic to 60 percent in February.