CT ends 2021 with fewer jobs than before pandemic
“Supply chain issues and labor shortages are a major, major problem. Throughout the state you an hear that as a common refrain — and it’s fueling a lot of problems that were unintended consequences of the pandemic.”
State Sen. Norm Needleman, D-Essex
With Connecticut still slower to recover jobs lost in the pandemic than many neighboring states, new data suggests that take-home pay for many workers did not keep pace with inflation in the past year — despite corporations acknowledging they are paying more to recruit new employees.
Connecticut added a net of 51,200 jobs last year, according to estimates based on surveys released Monday by the state Department of Labor. That put the statewide jobs count at just over 1.62 million jobs — about 71,000 fewer from two years ago before the onset of the COVID pandemic.
Connecticut’s unemployment rate dropped to 5.8 percent in December, according to DOL estimates. The U.S. unemployment rate was 3.9 percent in December.
DOL reported an average 1 percent increase in weekly December wages in Connecticut from the previous year — with the gain resulting from a slight increase in average working hours. The Consumer Price Index, by contrast, was up 7 percent in December from a year earlier, and 4.7 percent on an annualized basis.
“Given nominal income growth, given inflation, given the tax scenarios — what that says in all probability is that consumer spending power in Connecticut was probably up something in the neighborhood of 1 to 2 percent max,” said Don Klepper-Smith, an economist with DataCore Partners focused on the state economy. “Job numbers drive income.”
The first week of January, the U.S. Department of Labor reported the lowest number of Connecticut residents receiving unemployment benefits for any start to a year dating back to the late 1980s. Counting those who do not qualify for benefits for various reasons, DOL estimates that about 105,000 people are not working who could join the labor pool, versus just over 69,000 people who were out of work in December 2019.
“It’s essential that policymakers avoid labor mandates and tax policies that have held back our economy for too long,” Chris DiPentima, CEO of the Connecticut Business & Industry Association, said in written comments after Monday’s jobs report. “They must make job and economic growth a central focus of the 2022 legislative session so that we can realize Connecticut’s tremendous economic potential.”
Connecticut’s official unemployment rate ebbed slightly from DOL’s 6 percent estimate in November, while remaining well above the state’s 3.6 percent unemployment rate in December 2019 before the onset of the COVID pandemic.
Against Connecticut’s estimated 600 jobs added in December, New York reported a gain of more than 45,000 jobs, while Massachusetts tacked on 20,000 and New Jersey 10,000.
Leisure and hospitality employers had the biggest rebound in Connecticut employment last year with a 13.4 percent gain, followed by the construction sector at 7.1 percent. Connecticut’s finance and information sectors were the only two to record declines in employment of major industries tracked by DOL.
Companies continue hiring, including major manufacturers in Connecticut like ASML, which builds big machines that print circuitry on semiconductors and flat screens. The company hired more than 6,000 people globally last year, with its Wilton workforce numbering well over 2,000 people. CEO Peter Wennink credited the Wilton plant with helping pick up extra work after a fire damaged an ASML factory in Germany.
“The biggest challenge that we currently see is that the demand significantly exceeds our capacity — I think it’s unprecedented, I have never seen this before,” ASML CEO Peter Wennink said last week in a review of the company’s results last year and its outlook in the months ahead. “COVID — we cannot predict it, but it is still there. The infection rates around the globe are shooting up and it will inevitably also lead to some absenteeism.”
During a CBIA economic summit on Friday, Gov. Ned Lamont acknowledged the challenges companies face in recruiting people to fill open positions. Others weighed in on the issue as well, including state Sen. Norm Needleman, D-Essex, who owns a manufacturing company.
“Supply chain issues and labor shortages are a major, major problem,” Needleman said during a CBIA panel on Friday. “Throughout the state you an hear that as a common refrain — and it’s fueling a lot of problems that were unintended consequences of the pandemic.”