UI Covered Employment Reaches a New High in 2000
By Edward T. Doukas Jr., Research Analyst, DOL

Employment in Connecticut covered by Unemployment Insurance (UI) increased 23,501 during 2000, a growth rate of 1.4 percent, according to preliminary figures. The State's over-the-year increase marked the eighth consecutive year of expansion. The annual average employment figure posted for 2000, 1,676,709, also set a new high for UI covered employment, breaking the previous record set in 1988 at 1,662,044. Total private industry employment, constituting 87.2 percent of the State's employment total, increased 1.3 percent while government employment grew 2.6 percent in 2000.

The average annual wage of Connecticut workers was $45,451 in 2000, a 6.5 percent increase over the previous year. Private industry workers recorded an annual wage of $46,027, up 6.9 percent from 1999, while government sector employees earned $41,520, an increase of 4.1 percent.

The number of business establishments also increased in 2000, up 1.3 percent from 1999, reaching 108,239 compared to 106,867 a year earlier. Private establishments increased 1.3 percent, while government work sites decreased 0.5 percent.

Monthly employment and quarterly wage data are compiled from reports from employers who employ workers who are covered by the State's unemployment insurance laws. This information is first and foremost used to determine displaced worker benefit levels and employer tax rates. Beyond that purpose, the Connecticut Department of Labor's Office of Research makes ongoing efforts to enhance the quality of this data in order to provide the best possible information on the State's economy for informed decisions by policymakers and planners. The result is the largest available universe of employment and wage data by industry and area representing approximately 96 percent of all Connecticut employment. Employment that is not covered by unemployment insurance includes some workers in agriculture, domestic services, railroad employees, student workers, elected officials, employees of religious organizations, and self employed and unpaid family workers.

Employment

Among the nine major industry divisions, only manufacturing experienced decreased employment during 2000. Employment in the manufacturing sector dropped 5,430, or 2 percent; durable goods employment decreased 3,888, or 2.1 percent, and nondurable goods dipped 1,539, or 1.9 percent.

Reviewing employment figures at the two-digit Standard Industry Classification (SIC) level shows that over half of the decline in the manufacturing division was attributed to transportation equipment manufacturing (SIC 37). While still having the highest employment total among two-digit manufacturing industries, SIC 37 dropped 2,825, or 5.9 percent during 2000.

The construction division had the largest percentage increase in annual average employment, up 6.6 percent or 4,067. Special trade contractors (SIC 17) sparked this growth by increasing 7.2 percent, or 3,039. General building contractors (SIC 15) and heavy construction (SIC 16) both increased 5.5 percent over 1999. The table on page 3 shows the number of establishments, employment and wages for each major industry division and two-digit SIC subdivisions for 1999 and 2000.

Wages

During 2000, mining was the only industry division to show a decrease in average annual pay. The earnings of workers in mining dropped 2.8 percent to $58,464 in 2000 compared to $60,164 in 1999. Despite the lower average wage in 2000, mining workers still earned a wage that was 27 percent higher than that of private sector workers overall.

The retail trade division had the greatest increase in average wage for 2000, rising 13 percent to $23,589 compared to $20,870 the previous year. Despite this increase, retail workers still earned a wage that was 48.7 percent below that of all private industry workers. This is due in some part to the large number of part-time workers in this industry. At the two-digit industry level, miscellaneous retail (SIC 59) had the largest increase in pay, up 40.3 percent, $37,690 compared to $26,855 in 1999. This was the largest percentage increase for any two-digit industry in any division.

The average annual earnings varied widely among the other seven industry divisions, from a high of $85,638 in finance, insurance, and real estate (FIRE) to a low of $25,743 in agriculture, forestry, and fishing. Within FIRE, security and commodity brokers (SIC 62) ranked first among two-digit SIC subdivisions with an annual pay of $237,387. This was an increase of 16.1 percent from the 1999 figure of $204,435 and was over five times higher than the average for private sector employees overall. Workers in other industry divisions had the following average annual pay: wholesale trade, $61,785; manufacturing, $59,966; transportation and public utilities, $48,009; construction, $44,861; and services, $38,561.

Return to Top

Expanded Current Population Survey and its Effect on Labor Force Data Estimates
By Salvatore DiPillo, Labor Statistics Supervisor, DOL

The Connecticut Economic Digest has mentioned in previous articles the important contribution that the U.S. Census Bureau's Current Population Survey (CPS) makes to national, state and local areas labor force statistics. The CPS provides a comprehensive body of information on the employment and unemployment experience of the nation's population, classified by age, sex, race, and a variety of other characteristics. Annual average labor force data for all states, the District of Columbia, New York City, and the Los Angeles-Long Beach metropolitan area are derived directly from the CPS. Monthly estimates for these areas are produced using estimating equations based on regression models that combine data from the CPS, the Current Employment Statistics (CES) program, and state unemployment insurance (UI) systems. Estimates for substate labor market areas (other than the two areas mentioned above) are produced through a building-block approach which uses data from several sources, including the CPS, the CES program, state UI systems, and the decennial census, to create estimates that are adjusted to the statewide measures of employment and unemployment.

In September 2000, the U.S. Census Bureau expanded the monthly sample for the CPS to meet the requirements of the State Children's Health Insurance Program (SCHIP) legislation. This legislation requires that the Census Bureau improve state estimates of the number of children who live in low-income families and lack health insurance. The expansion of the monthly CPS sample was one part of the Census Bureau's plan for strengthening the SCHIP estimates. The monthly CPS sample was increased in 31 states and the District of Columbia, and the total number of households eligible for the survey rose from about 50,000 nationally to about 60,000. In Connecticut, the CPS sample doubled, from approximately 600 to about 1,200. The additional households were introduced into the survey over a 3-month period beginning in September 2000.

The Bureau of Labor Statistics (BLS) which develops national labor force data and under whose direction the states develop state and local area labor force data, determined that it would not use the additional sample to produce the official labor force estimates prior to the release of July 2001 data in August. This delay would allow for sufficient time to evaluate the differences, if any, between estimates obtained from the current and the expanded household sample. BLS evaluated the monthly data for the nation and states from the two samples and found no statistically significant differences in estimates, nor any unusual effects due to the CPS expansion. The expanded sample results in reductions in the estimated standard deviations for the CPS and model estimates and in actual model prediction errors. Thus, for both national and subnational estimation, the expanded sample will be used beginning with July 2001 estimates. National data is set for release on August 3; Connecticut's data will be available August 17.

With the release of July estimates, revised June state and sub-state labor force estimates also will reflect the expanded sample data. This will allow for the analysis of over-the-month change on a consistent basis. The state and area labor force estimates for January through May will not be revised at that time. Rather, the January - May expanded sample will be incorporated into the labor force estimates as part of the annual benchmarking of 2001 data. These data will be made available in March 2002.

Based on results for the early months of the year, the larger CPS sample in Connecticut is likely to produce higher unemployment rates than originally estimated for those months, with the number of residents employed somewhat lower and the number of unemployed higher. The experience of the other affected states was mixed, some with higher rates and others with lower rates or no change. It is important to keep in mind that the revised labor force estimates for June 2001 and following months at both state and substate levels will not be directly comparable to those of earlier periods; comparisons should not be made without acknowledging the potential effect the differing sample sizes may have on the data.

Return to Top

Industry Profile: Aerospace
By Mark Prisloe, Senior Economist, DECD

Introduction

Long a backbone of Connecticut's manufacturing sector, the aerospace industry is a sustained contributor to employment, output, exports, and the Connecticut economy. Since the beginning of the aerospace age, Connecticut's aerospace manufacturers have enjoyed a long-standing reputation for supplying high quality products. Those products include aircraft and parts, aircraft engines, helicopters, and other aerospace components.

Employment

Employment in Connecticut's aerospace industry (Standard Industrial Classification code 372) was 33,898 in 2000, the latest year for which data are available. According to the Connecticut Department of Labor, the State's total manufacturing employment level showed a steady decline from 343,099 in 1990 to 262,508 in 2000, or a drop of 23.5 percent. Aerospace, a major component of the manufacturing sector, demonstrated a more pronounced downward trend during the same period, having dropped nearly twice as much (table). Dramatic declines occurred during the 1993-95 period, followed by job gains in 1997 and 1998, before falling again in the last two years (chart). Moreover, aerospace jobs, which accounted for 17.8 percent of the total manufacturing industry in 1990, shrank over the decade to 12.9 percent in 2000.

Wages

Over the 1990-2000 period, the average annual wage per worker in the aerospace manufacturing industry grew 63 percent, while the overall private sector's rose by 60 percent. The aerospace industry paid an average of $68,737 per worker in 2000, which was almost 15 percent higher than the manufacturing sector overall.

Establishments

In 1990, the Connecticut aerospace industry had 164 establishments. During the 1989-1992 recession that number steadily rose and reached a high of 190 in 1992. In fact, over the ten years between 1990 and 2000, the number of establishments grew by 5.5 percent, while total manufacturing saw a 7.9 percent decline. While these numbers reflect the experience of businesses with a primary Standard Industrial Classification (SIC) code of 372, they do not include the numerous suppliers to the aerospace industry that may be categorized under another primary SIC. From industry sources, for example, it is clear that Connecticut has a growing number of aerospace component manufacturers.

Aerospace Core Created

A core group of Aerospace Components Manufacturers (ACM) has initiated a program to strengthen Connecticut's aerospace cluster. Through support from the Connecticut Department of Economic and Community Development (DECD), a new non-profit 501C(3) organization has been formed to manage the group's programs under the direction of a six-member board of directors, all of whom are company presidents. A two-year plan aimed at achieving worldwide recognition as a premier source of aerospace components is being financed by DECD's $125,000 investment and will be leveraged with over $500,000 in industry support.

Expanding World Market

A $1.3 trillion world market for aerospace products is forecasted to materialize by 2018. This expanded global market offers excellent opportunities for Connecticut's small and medium sized aerospace manufacturers. In terms of dollar volume, transportation equipment manufacturing (SIC 37), which includes the aerospace industry, remains Connecticut's single largest merchandise export. In 2000, this industry alone exported over $2.2 billion, which represented 38 percent of total merchandise exports.

Output and Productivity

Connecticut's aerospace industry is among the most productive in the world. As measured by the dollar value of final output, gross state product (GSP) in the State's aerospace industry in 1999 amounted to $4.3 billion. Industry sales have been on an expanding trajectory since the recovery began. Connecticut's productivity, or dollar value of output per employee, was at $125,527 in 1999, making it among the highest in the nation.

Return to Top

Industry Clusters
Teaching Entrepreneurship

July 11, the DECD, the National Foundation for Teaching Entrepreneurship (NFTE), and Yale University hosted the first NFTE University's VIP Day at the Yale School of Management. The fundamental purpose was to recognize corporate supporters, teachers, and other partners involved in Connecticut's mission to provide inner city youth with entrepreneurial skills. 

The highlight of the evening was a NFTE business plan presentation by Vicktoria Barokha, first place winner of the 2001 BizPlan competition at West Woods Alternative High School in Bristol. After successfully completing the NFTE course curriculum, Barokha won a $200 first place cash award in her high school's BizPlan competition. 

William Donaldson, retired chair-man and CEO of the Aetna, keynoted. Steve Mariotti, founder and president of NFTE, also attended. Yale will host training 37 teachers for one week in the NFTE course curriculum. In September, the teachers will work in select high schools in Bridgeport, Bristol, Danbury, East Hartford, Hartford, New Haven, Norwalk, and Stamford. 

NFTE's curriculum includes classroom and on-line instruction, interactive, business-oriented field trips, speakers, and other components. The Department of Education supports NFTE's efforts. NFTE is an integral part of the multi-pronged Inner City Business Strategy. For  more information on the NFTE program contact Elaine Thomas Williams at (860) 270-8235 or email: elaine.thomwilliams@po.state.ct.us. 

Return to Top

Housing Update
July 2001 Housing Permit Activity

Commissioner James F. Abromaitis of the Connecticut Department of Economic and Community Development announced that Connecticut communities authorized 793 new housing units in June 2001, a 6.0 percent decrease compared to June of 2000 when 844 units were authorized.

The Department further indicated that the 793 units permitted in June 2001 represent a decrease of 5.7 percent from the 841units permitted in May 2001. The year-to-date permits are down by 2.6 percent, from 4,648 through June 2000, to 4,529 through June 2001.

Hartford Labor Market Area (LMA) recorded the largest number of new authorized units in June with 335. New Haven and Bridgeport Labor Market Areas followed with 87 and 70 units respectively. Burlington led all Connecticut communities with 28 units, followed by Danbury with 21 and Farmington with 18. From a county perspective, all except Fairfield and New Haven showed a net gain in new housing authorizations compared to a year ago.

Return to Top