Quirk in job numbers points to new strategy DAN HAAR

If you’re reading this while on the job, working for yourself or for an employer in another state, youmight be part of a trend.

No, it’s not a rise in the number of people consuming news while working. Well, maybe that, too, but this is about the Connecticut job market.

A quirk in the numbers has experts perplexed, and it just might help explain why job growth in this state has been somewhere between lame and awful over the last several years. If weunderstand the quirk, and if it’s real, we might be able to market the state in a way that works better.

Since the recession, Connecticut famously has lagged almost all other states in job creation. This has been widely reported of course, and the problem seems to be growing worse, not better, as the economic boom that missed Connecticut winds down.

That is based on amonthly survey of thousands of employers, followed by revisions using actual payroll data.

But there’s another monthly survey— of a much smaller sample of households— that shows a consistently different picture. The number of Connecticut residents in that survey who say they are working has risen fairly nicely over the last six years, since it bottomed out in 2013.

The difference is awhopping 86,000people over the last six years, and that’s the mystery. Do they really exist?

Could it be that we’re not counting all the people who are working in Connecticut— and the picture isn’t quite as badas it looks? Who are these missing people who say they have jobs but don’t appear on the statistically accurate jobs count?

Are they working from home, for companies in other states that don’t report Connecticut job totals? Are they selfemployed. Oris all of this just statistical noise, a sort of cosmic economic joke?

Experts don’t agree. Here are the numbers:

Between 2013 and 2019, the number of added jobs in Connecticut’s economy has totaled an anemic 39,500, or 6,600 per year, as measured by the survey of employers and payroll data. That’s about onethird of 1 percent per year; it’s the figure we in the economics game report widely, and it’s considered accurate.

In2018, the gain was only 2,200. I’musing annual averages including the the first six months of 2019. There are other ways to measure this but theydon’t change the picture.

Then we have the household survey, which has show nan increase of 125,500 Connecticut residents since 2013 who say they’re working. That comes out to 20,900 a year, a healthy rise of well over 1 percent per year if it’s true.

Both numbers can’t be right unless some weird stuff is happening.

“Statistical significance is what it comes down to,” said Donald KlepperSmith of Data Core Partners, who has tracked the state’s jobs picture for decades.

That household survey queries a maximum of about 1,500 people amonth, sometimes half that. It’s the survey the Department of Labor uses to determine the unemployment rate, whichis statistically dicey. “Every state has issues with statistical validity with respect to the household survey,” KlepperSmith said.

Certainly for any one month, or any one year, we trust the employerbased jobs numbers over the household numbers because of “data noise.” But over six years?

“That kind of trend shouldn’t holdu pthat long as noise,” said Andy Condon, director of research at the state Department of Labor.

Let’s assume it’s acombination of factors including noise. We knowthe financial services industry is resurgent in New York, and not somuch in Connecticut, since the recession. That, Condon and others say, could account for someof the quirk.

David Lewis, CEO of Operations Inc, a Norwalk based humanresources firm, said an increase of people working in New York probably doesn’ t explain the whole 86,000person quirk. “That seems improbable, but I can get you maybe 10,000,” he said, largely by looking at the apartment boomin the South End of Stamford.

Condon added, “There’s been an increase in people going to Massachusetts” to work, while still living in Connecticut.

Tha twould make sense considering the sharply rising number of jobs, especially in metro Boston, and the nutty housing prices there. If you live in, say, Fairfield and you land a job in Waltham, Mass., and youhave kids in the local schools, wouldn’t you at least ask if you could work from home and maybe com mute a fewdays amonth to avoid uprooting to a house that costs twice what youcan fetch for yours?

Then there’s the rise in selfemployed people, especially in the socalled gig economy. We knowthey are not captured by the survey of employers. The U.S. Department of Labor conducted a study, Condon said.

“They found not ahuge increase of people working as contractors ... and there’ s no reason I can think of in Connecticut why that would be entirely different here.”

But it’s possible self employed people are part of the picture, as with remote workers, if they don’ t want to leave Connecticut and find better work that way than in the mainstream corporate and smallbusiness economy.

We could have a more accurate picture if the state were able to see detailed IRS data, Condon said, but he added, “The difficulty of obtaining IRS data is significant, especially for a small shop like ours.”

So the labor force has been rising while job totals have not, at least not asmuch. That might be changing, Condon said, pointing to a flattening and decline in 2019 of both the labor force numbers from the household survey and the jobs numbers. “There’s anew dynamic going on,” he said. “We’re running out of people.”

That is, the number of people in Connecticut of working age— whether or not they’re working— is declining.

That’s a problem for employers and for the state as a whole. Which brings us to marketing. Right now we’re trying to attract and keep companies as a strategy.

Cassidy Norton, associate publisher and media relations chief for The Warren Group, a Bostonbased real estate information business, has a different idea.

“I think Connecticut should rebrand itself as a place where people can work remotely,” Norton said.

Why not? Marketing works best when it follows trends that are already happening.

Dan Haar / Hearst Connecticut Media Rina Patel is manager of the Stanley Black & Decker factory in Danbury. A quirk in the state’s job growth numbers has experts perplexed, and it just might help explain why job growth in this state has been somewhere between lame and awful over the last several years.