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Connecticut Economic Digest: April 2002 issue
Union Membership Trends | Industry Profile: Insurance Carriers and Agents | Town/City Profile: South Windsor | Spring Brings Signs of Economic Revival in Connecticut | Industry Clusters | Housing Update

Union Membership Trends
By Jungmin Charles Joo, Associate Research Analyst, DOL

This article will discuss the latest union membership data for Connecticut, the states, and the nation, released by the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor. The nation's union membership by industry and occupation, demographic characteristics of union members and their earnings will also be briefly summarized.

Union membership estimates are obtained from the Current Population Survey (CPS), the nationwide household survey that provides the basic information on the labor force, employment, and unemployment. The survey is conducted monthly for the BLS by the U.S. Census Bureau from a scientifically selected national sample of about 60,000 households. Union membership and earnings data are tabulated from one-quarter of the CPS monthly sample and are limited to wage and salary workers. Excluded are all self-employed workers. "Union members" data refer to members of a labor union or an employee association similar to a union. "Represented by unions" data refer to union members, as well as workers who have no union affiliation but whose jobs are covered by a union or an employee association contract.

Union Membership in Connecticut and the U.S.

In 2001, 15.8 percent of wage and salary workers in Connecticut were union members. This was a slight decline from 16.3 percent in 2000; the number of union members dropped from 246,000 to 237,000 over the year. By comparison, the unionization rate for the nation was lower at 13.5 percent last year, unchanged from 2000. Connecticut had the 16th highest unionization rate among the 50 states and the District of Columbia last year.

In addition, 250,000 Connecticut workers were represented by unions even if they were not union members, making up 16.7 percent of the total employed, down from 17.4 percent in 2000. Nationally, this rate also fell, from 14.9 percent to 14.8 percent over the year.

From a historical perspective, the rate of union membership in Connecticut has been on an uneven but downward trend. As the chart on the front page shows, the unionization rate has declined more than four percentage points between 1995 (earliest data available at the state level) and 2001 to 15.8 percent. Union membership in the U.S. has also been falling, from 20.1 percent in 1983, the first year for which comparable union data are available, to 13.5 percent in 2001. The shrinking of unionization follows the decline of auto, steel, textiles and other manufacturing-based industries beginning in the late 1970's. Additionally, anti-union legislation, automation and the rise of a global economy all played roles in the trend of falling union membership. Connecticut's rates have been consistently higher than the national average rates, in part due to a higher concentration of manufacturing industries than in the nation as a whole.

Union Membership by State

State union membership rates continued to show a clear geographic pattern in 2001. All states in the East North Central division of the Midwest census region, Middle Atlantic division of the Northeast region, and Pacific division of the West region had unionization rates above the national average of 13.5 percent, while all states in the East South Central and West South Central divisions of the South census region had rates below it. One hypothesis regarding this pattern is that it is due, in part, to the differences in the occupational/industrial mix among the different divisions. For instance, the East North Central, Middle Atlantic, and Pacific divisions have a higher concentration of manufacturing industries, which tend to be heavily unionized, than the East South Central and West South Central divisions. Also, differing labor laws in each state may have an effect on unionization rates among the geographic divisions. Overall, 29 states had union membership rates below that of the U.S. average, while 21 states and the District of Columbia had higher rates. Four states had union membership rates over 20.0 percent in 2001- New York, Hawaii, Alaska, and Michigan. Two states had unionization rates below 5.0 percent- North Carolina and South Carolina. See the table on page 3 for a complete history of unionization trends of all states for 1995 through 2001.

Membership by Industry

Data on the industry, occupation, demographic characteristics, and earnings of union members are not available for Connecticut, but the data for the nation may provide an indication of what also exists in our State. Nationally, workers in the public sector (37.4 percent) continued to have unionization rates that were about four times higher than their counterparts in private industry (9.0 percent) in 2001. Union membership rates of government employees have held steady since 1983, while those of private nonfarm employees have declined. Local government, which includes many workers in the heavily unionized occupations of teachers, firefighters, and police officers, had the highest unionization rate, at 43.1 percent. Among the private nonfarm industries, the union membership rate was the highest in transportation and public utilities (23.5 percent). The construction and manufacturing industries also had higher-than-average unionization rates, at 18.4 percent and 14.6 percent, respectively. The nonfarm industry with the lowest unionization rate in 2001 was finance, insurance, and real estate with 2.1 percent.

Membership by Occupation

Among the occupational groups, protective service workers continued to have the highest union membership rate in 2001, at 38.0 percent. Precision production, craft, and repair workers and operators, fabricators, and laborers also had above-average unionization rates, 21.5 and 19.9 percent, respectively. These workers typically are employed in the highly-unionized industries of construction and manufacturing. Professional specialty workers, a group that includes teachers, also had a higher-than-average union membership rate, at 19.1 percent. The rate was lowest among sales occupations, 3.5 percent.

Demographic Characteristics of Union Members

Last year, union membership rates were higher among men (15.1 percent) than women (11.7 percent). This has been the case since 1983, but because of a more rapid decline in rates for men than for women, the gap in unionization rates has been closing since that time.

Blacks were more likely to be union members (17.0 percent) than either whites (13.1 percent) or Hispanics (11.3 percent). Black men continued to have the highest rate of union membership among all the major worker groups, at 18.9 percent. Hispanic women and white women had the lowest rates of unionization, 10.7 percent and 11.1 percent, respectively. Workers ages 45 to 54 were more likely to be unionized than either their younger or older counterparts. Full-time workers were more than twice as likely as part-time workers to be members of a union.

Earnings

In the U.S., full-time wage and salary union members had median weekly earnings of $718 last year, compared with a median of $575 for wage and salary workers who were not represented by unions. The difference reflects a variety of influences in addition to coverage by a collective bargaining agreement, including variations in the distributions of union members and nonunion employees by occupation, industry, firm size, and geographic region.

SOURCE:
Current Population Survey, Bureau of Labor Statistics; part of this article was excerpted from the BLS's January 2002 news release, "Union Members Summary,"http://www.bls.gov/news.release/union2.nr0.htm.


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Industry Profile: Insurance Carriers and Agents
By Kolie Sun Chang, Senior Research Analyst, DECD

Introduction

So, class, what do Aetna, The Hartford, Hartford Steam Boiler, Phoenix, and Travelers all have in common? If you guessed the City of Hartford, Connecticut, the insurance capital of the world, then go to the head of the class. You guessed right!

Despite the diversification of our economy in the last decade, recent data shows that the insurance industry continues to be one of the most important industries in Connecticut.

Insurance carriers (SIC 63) and insurance agents, brokers & service (SIC 64) are two major industries within the finance, insurance, real estate (FIRE) sector. Insurance carriers are companies that design, offer and market insurance policies, while insurance agents and brokers sell insurance policies for the carriers and either work independently or are employed by them.

Employment and Establishments

In 2000, employment in these two industries alone reached over 71,000 and accounted for more than half of FIRE employment. And, importantly, insurance carriers had 60,249 jobs in Connecticut, representing the fourth highest total in the State among two-digit SIC groups, trailing only health services, business services, and eating and drinking places.

The insurance carrier industry has lost over 10,000 jobs (or 14.4 percent) from its peak employment level of 70,400 in 1991. The employment of insurance agents, brokers & service remained flat over the same period.

The number of establishments in the insurance carriers and insurance agents, brokers & service industries increased at a faster rate (3.7 and 5.0 percent, respectively) in 2000 than a year earlier. However, this is primarily attributed to changes in firms' reporting status, rather than actual new business start-ups.

Wages and Gross State Product

The financial sector leads all industries in terms of wages and earnings. In 2000, insurance carriers average wages, at $70,264, was 53 percent higher than that of the private industry statewide average ($46,027), while wages for insurance agents, brokers & service employees, at $59,659, was 30 percent higher. Wages almost doubled from 1990 to 2000 for insurance carriers, and rose 62 percent for the insurance agents, brokers & service group.

Gross State Product (GSP) is the total value of all final goods and services produced in the State and is considered a key measure of the overall health of the economy. The two aforementioned insurance industries have continued to emerge as an integral part of the State's economy, as illustrated by the fact that their share of GSP has grown from 4.1 percent in 1990 to 7.3 percent in 1999.

Outlook

According to the Career Guide to Industries, published by the U.S. Bureau of Labor Statistics, employment in the insurance industry nationally is projected to increase six percent between 2000 and 2010, more slowly than the 16 percent average for all industries combined. Connecticut's forecast follows the national trend. According to a recent Connecticut Department of Labor forecast, the insurance industry is projected to gain 7.9 percent in employment between 1998 and 2008, while all other industries will do slightly better at 9.7 percent.

Conclusion

Despite the recent reduction in industry employment, the outlook for insurance carriers and agents, brokers & service remains positive. As this analysis demonstrates, they continue to serve as an important economic foundation for the State of Connecticut.

Insurance Industry Covered Employment, Wages, and GSP

Industry Code. Description

Establishments

Employment

Wages

Gross State Product (Mil.$)

1990

2000

90-00
% Change

1990

2000

90-00 Change

1990

2000

90-00
% Change

1990

Share

1999

Share

No.

%

Total Private Industries

100,215

104,569

4.3

1,420,078

1,462,534

42,456

3.0

$28,841

$46,027

59.6

$98,939

 

$151,779

 

Total Insurance

2,210

2,457

11.2

80,847

71,482

-9,365

-11.6

$36,831

$64,962

76.4

       

63. Insurance Carriers

562

701

24.7

69,697

60,249

-9,448

-13.6

$36,714

$70,264

91.4

$3,323

3.4

$10,077

6.6

64. Insurance Agents, Brokers & Service

1,648

1,756

6.6

11,150

11,233

83

0.7

$36,948

$59,659

61.5

$691

0.7

$998

0.7


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Town/City Profile: South Windsor
By Mark Prisloe, Senior Economist, DECD

Introduction

With a population of 24,412, located in north central Connecticut on the east bank of the Connecticut River, with easy proximity to Hartford and Springfield, South Windsor is a growing community that features mixed pastoral beauty as well as desirable suburban real estate and a burgeoning industrial/commercial base. It is a town rich in history and promising in its future.

Rich in History

According to local historians, in the mid-1600's English settlers of Windsor began using land on the east bank of the Connecticut River for grazing and farming. By the end of the century several families had made their homes in the area now known as South Windsor. In 1768, the residents of the area incorporated as the separate town of East Windsor, which then included all of East Windsor, South Windsor and Ellington. Known for its agriculture and shipbuilding, the town supplied more than 200 volunteers for the Revolution as well as supplies of cattle and cloth. South Windsor incorporated in 1845.

A seal of the Town, officially adopted in 1969, features elements identified with the Town's character including the shad, shad-blow blossoms, arrowheads, tobacco, rocket, shield, and lattice. The course of the Hartford Marathon, run in October each year, includes the length of South Windsor's picturesque Main Street, also part of a historic district near the birthplace of such an 18th Century luminary as preacher Jonathan Edwards.

Economic Base

Today, industry is dominated by manufacturing and services, rather than agriculture. Together they constitute 43 percent of all jobs, but there are important contributions from wholesale trade with 15 percent, retail trade with 11 percent, transportation, communication, and utilities with 10 percent, and construction with another 9 percent. South Windsor's labor force was 13,229 in 2001, still below its 1991 peak of 14,253, but with remarkably low unemployment at 2.2 percent. Over half of the Town's population falls in the prime adult employment age of 25 to 64. As the table below shows, the average manufacturing wage of $49,536 in 2000 is topped only by the very small finance, insurance, and real estate sector at $61,217; however, Travelers and Aetna are among the Town's top ten taxpayers.

In the last decade housing permits, peaking at 143 in 1992, averaged over 100 per year, dropping to 69 in 2001. Housing consists of a blend of single-family units, planned developments and condominiums, and multifamily units. A 1997 regional profile puts the median sales price of a single-family home at $158,750, compared with a regional median sales price of $138,000. A continuing growth in market values complements the Town's image as a steady, solid community. Retail sales of $272.1 million in 2000 have nearly tripled in the last decade.

Outlook

As its Web site notes, South Windsor "affords a blend of gracious residential living, a thriving commercial community and an expanding high-tech industrial base." Only minutes from Bradley International Airport, freight rail lines also connect the Town with the entire northeast corridor.

While Manchester, bordering to the southeast, boasts one of the fastest growing commercial areas in all of Southern New England with its sprawling Buckland Hills Mall and environs, South Windsor's own development includes a new Lowe's Home Improvement Warehouse and Target stores that recently opened. In recent years, the town has gained 1.3 million square feet of new business.

Developers have proposed one of the largest projects in the State- a 1.2 million-square-foot retail, hotel, and office complex on 232 acres near a town-designated "gateway" zone. In addition, South Windsor offers some of the finest recreational, open-space, and park facilities anywhere. The future looks bright indeed.

South Windsor Employment and Wages

Industry

1990

1999

2000

Units

Jobs

Wages

Units

Jobs

Wages

Units

Jobs

Wages

Total

794

12,546

$27,224

802

11,696

$37,707

785

11,745

$38,471

Agriculture

22

159

$18,879

21

170

$15,469

21

157

$16,595

Construction

154

963

$30,618

115

972

$42,001

119

1,099

$42,766

Manufacturing

104

3,676

$33,924

98

2,754

$48,382

97

2,750

$49,536

Trans.,Comm. & Utilities

38

794

$34,037

34

1,162

$32,537

31

1,172

$32,954

Wholesale Trade

93

1,632

$33,069

103

1,711

$45,589

106

1,764

$46,009

Retail Trade

108

1,517

$15,198

102

1,430

$22,995

91

1,288

$21,751

Finance, Ins. & Real Estate

50

287

$28,603

47

350

$63,056

46

308

$61,217

Services

203

2,688

$17,289

256

2,212

$25,608

249

2,243

$26,628

Federal Government

2

45

$29,944

3

44

$44,717

3

40

$46,538

State Government

n

n

n

3

40

$43,944

3

40

$45,257

Local Government

17

725

$31,354

17

838

$39,216

17

878

$40,663

n = nondisclosable


Economic Indicators \ Year

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

Population

22,070

22,082

22,237

22,315

22,381

22,433

22,498

22,711

22,867

24,412

NA

Labor Force

14,253

14,235

14,172

13,849

13,067

13,119

13,026

12,940

13,119

13,475

13,229

Employed

13,517

13,343

13,416

13,242

12,503

12,533

12,585

12,651

12,825

13,253

12,937

Unemployed

736

892

756

607

564

586

441

289

294

222

292

Unemployment Rate

5.2

6.3

5.3

4.4

4.3

4.5

3.4

2.2

2.2

1.6

2.2

New Housing Permits

106

143

113

113

78

99

124

134

106

68

69

Retail Sales ($mil.)

80.2

89.6

93.3

124.1

134.2

159.0

160.0

178.6

243.9

272.1

NA


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Spring Brings Signs of Economic Revival in Connecticut

Spring is a time for revival. At the national level, there are definite signs that the economy is improving. Real GDP grew at a much better than expected annual rate of 1.4% in the fourth quarter of 2001. The FOMC at its meeting on March 19 decided to leave the target federal funds rate unchanged at 1.75%. More importantly, it changed its stance from accommodative to neutral between growth in the economy and inflation.

Readers of last month's Economic Digest probably have read that, with the rebenchmarking of total nonfarm employment, the current downturn in the Connecticut economy most likely started in July 2000 rather than October 2000 as I reported last month. This month, the CCEA-ECRI coincident and leading employment indexes are still based on unrevised data. We will start the process of revising our indexes based on the re-benchmarked data, and will be able to report the result to you next month.

Thus, based on our current data, the CCEA-ECRI coincident and leading employment indexes both fell in January 2002 on a year-to-year basis. The CCEAECRI Connecticut coincident employment index declined for the tenth time since the beginning of 2001, from 113.8 in January 2001 to 108.4 in January 2002. Once again, all four components are negative contributors to the index on a yearto- year basis, with a higher insured unemployment rate, a higher total unemployment rate, lower total employment, and lower total nonfarm employment. On a sequential month-to-month basis, the CCEA-ECRI Connecticut coincident employment index rose from a revised 107.7 in December 2001 to 108.4 in January 2002. All four components are positive contributors, with a lower insured unemployment rate, a lower total unemployment rate, and higher total employment and total nonfarm employment.

The CCEA-ECRI leading employment index declined from 115.1 in January 2001 to 111.9 in January 2002. Five components of this index are negative contributors, with lower total housing permits, a lower Hartford help-wanted advertising index, a higher short duration (less than 15 weeks) unemployment rate, higher initial claims for unemployment insurance, and lower average weekly hours worked in manufacturing and construction. The sole positive contributor to this index is a lower Moody's Baa corporate bond yield. The leading employment index barely changed from a revised 111.92 in December 2001 to 111.95 in January 2002 on a sequential month-to-month basis. Three components are negative contributors, with a higher Moody's Baa corporate bond yield, a decrease in total housing permits, and higher initial claims for unemployment insurance. The three positive contributors are a lower short duration (less than 15 weeks) unemployment rate, a higher Hartford help-wanted index, and higher average weekly hours worked in manufacturing and construction.

This is the first time since the beginning of the slowdown that both the coincident and the leading employment indexes have shown an improvement on a sequential month-to-month basis. This, together with reports of an improving national economy are causes for optimism that the worst may be over for the Connecticut economy.

Francis W. Ahking, Department of Economics, University of Connecticut, Storrs, CT 06269. Phone: (860) 486-3026. Stan McMillen [(860) 486-0485, Storrs Campus], Connecticut Center for Economic Analysis, University of Connecticut, provided research support. Leading and coincident employment indexes were developed by Pami Dua and Stephen M. Miller, in cooperation with Anirvan Banerji at the Economic Cycle Research Institute. Components of Indexes are described in the Technical Notes on page 27.


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Industry Clusters
DECD Recognized for Economic Development Efforts

Connecticut's Economic Competitiveness Strategy, known as the State's Industry Cluster Initiative, has earned a 2001 Silver Economic Development Achievement Award from Business Facilities magazine. The publication's prestigious annual Economic Development Achievement Awards Program distinguishes outstanding initiatives throughout the United States and worldwide.

Connecticut's Economic Competitiveness Strategy, overseen by the Department of Economic and Community Development (DECD), was recognized in the competition's Statewide Economic Development Strategy category for its innovation, effectiveness and pro-business impact.

Developed by the Governor's Council on Economic Competitiveness & Technology, the Industry Cluster Initiative is a public/private partnership, driven by industry and the private sector, to identify, develop, implement, and nurture cluster activity in industries and markets critical to the state's economic growth. Clusters are groups of industries that create products and services related by a common technology, market or need, and the firms that support those businesses. Connecticut's existing clusters are in aerospace, bioscience, metal manufacturing, maritime, software and information technology, plastics and tourism.

The Department of Economic and Community Development is the lead agency for Connecticut's economic and community development activities. More information about DECD and other state initiatives can be found at www.decd.org. To view Connecticut's award and all of the Business Facilities Award winners, visit www.tfmgr.com/ busfac/2001edwinners7.htm.


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Housing Update
Permits Up from Previous Month

[DECD] Commissioner James F. Abromaitis of the Connecticut Department of Economic and Community Development today announced that Connecticut communities authorized 633 new housing units in February 2002, a 10.3 percent decrease compared to February of 2001 when 706 units were authorized.

The Department further indicated that the 633 units permitted in February 2002 represent a 5.3 percent increase from the 601 units permitted in January 2002. The year-to-date permits are down 20.6 percent, from 1,555 through February 2001, to 1,234 through February 2002.

Hartford Labor Market Area added 271 new housing units, an increase of 115 units compared to a year ago, while Stamford Labor Market Area decreased 240 units during the same period. This reduction may be attributed to the one large multi-unit (248 units) authorized in Norwalk a year ago. South Windsor led all Connecticut communities with 75 units, followed by Newtown with 26 and Shelton with 18 units. From a county perspective, Hartford County had the largest percentage gain (117 percent) compared to a year ago.

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Last Updated: October 15, 2002