Low-wage workers still suffering from economic downturn brought by COVID

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. 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.” 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 in-person 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.

There is limited financial help for some of those who don’t feel safe to return. In Connecticut, the state issued guidance July 31 informing those who are considered at “high risk for severe illness from COVID” that they can refuse an offer to return to work and still collect unemployment. However, that protection did not extend to those who may expose a high-risk family member to the virus by returning to work.

The U.S. Department of Labor, however, on Feb. 25, released guidance allowing those who “work at a worksite not in compliance with coronavirus health and safety standards” to become eligible for federal unemployment compensation.

“Until now, many workers have faced a devil’s bargain: risk coronavirus infection, or choose some level of safety and live without income support,” said Suzi Levine, the agency’s principal deputy assistant secretary of labor for employment and training. “Today’s guidance means more workers and families will be able to put food on their tables as our nation fights this virus, while we work to help millions of Americans return to good jobs.”

That hasn’t helped Pearson’s husband much. His application for unemployment was denied after he decided not to return to campus as a chef when students returned because he has a pre-existing condition. He’s challenging the denial, a process that typically takes months.

So, for now, the family is living off the $1,070 Denitra receives in unemployment compensation each month. After losing her job, she also applied for state aid to help her pay for food. She gets $500 a month.

“But how does that help when you can’t cook. I’m in a hotel with a fridge and a microwave,” she said.

The unemployment money she got last Monday was gone by Wednesday, she said. demand from pent up residents to eat out, shop, and travel. A massive third round of federal relief aimed at boosting the recovery will also route more aid to struggling businesses, entertainment venues, and residents to infuse money into the economy.

“Our economy is like a coiled spring. I think it could snap back and snap back pretty quickly,” Lamont told business leaders earlier this month. “I think our budget is strong. I think we’re going to make a big effort to get people back to work.”

“We’re in the ninth inning of all this. I’ll say the light at the end of the tunnel, we can really see it now,” said DiPentima, the leader of the state’s business coalition. “Those businesses that are in that struggling bucket only need to get through another one or two months where we’re almost back to normal, if you will. I think the [federal recovery package] will take them there.”

But Lamont, a baseball fan, reminds people that a lot of games are lost in the ninth inning.

“If we stick to our strategy, we’re going to find June is a pretty nice month,” he said.

Some economists, however, warn it will take years to return to pre-pandemic job levels.

Don Klepper Smith, an economist from DataCore Partners who was chief economic adviser in the late 2000s to former Gov. M. Jodi Rell, said the combination of federal stimulus dollars and wealthy residents, who weren’t financially impacted as harshly as others, is artificially rightsizing the state’s fiscal coffers and somewhat masking the structural weakness of the state’s economy. Growing back the lower- and mid-wage jobs will be critical to ensuring a healthy economy, he said.

“My sense here is it’s going to be a long haul for Connecticut,” he said. “The economy is like a spring coil? What a nice idea and something I could understand coming out of the mouth of the governor of Connecticut. I think I see that as more rhetoric than factually based. He’s not looking at the same data I am.”

“… Saying the Connecticut economy is ‘poised like a spring’ is like saying the Red Sox are poised to score six runs in the third inning of a nine inning game against the Yankees,” Klepper Smith added. “That’s the very nature of short-term thinking and it’s myopic. You need to look at the long-term for a true picture of economic health. Short-term trends, by definition, are very volatile.”

University of Connecticut Economist Fred Carstensen also isn’t optimistic.

“Connecticut’s economy is in a very, very deep hole. It is the worst performing state economy in the nation, by a WIDE margin,” he posted March 27 on LinkedIn. “When will the challenge of climbing out get serious, sustained attention in Hartford?”

There are some glimmers of hope in the typically private industry data being tracked by the team at Harvard.

The amount of time people are spending out of their homes at grocery stores, retail stores, and in transit are on the rise for the last month, as is business revenue from companies located in both low- and middle-income neighborhoods, but all of these markers are still below pre-pandemic levels. Gross domestic product also increased at one of the fastest rates during the last three months of last year, though the state’s 4.1 percent drop in GDP throughout 2020 was one of the largest in the country.

Monthly job postings are down 2 percent, but those which require minimal education are significantly up.