UI Covered Employment Declines in 2001 - First Time in Eight Years
By Edward T. Doukas Jr., Research Analyst, DOL

Employment in Connecticut covered by Unemployment Insurance (UI) decreased by 9,030 during 2001, a decline of 0.5 percent, according to preliminary figures. After eight consecutive years of expansion, the State's over-the-year decrease marked the first decline in annual average employment since the period of 1991-1992. Total private industry employment, constituting 85.9 percent of the State's employment total, decreased 2.1 percent, while government employment grew 9.9 percent in 2001. Some of the decline in private employment and increase in government employment is attributed to the change in the classification of Indian tribal councils and related establishments. In the past these establishments were assigned a private ownership code. Beginning with the first quarter of 2001, due to a change in federal law that governs the way Indian tribes are treated under the Federal Unemployment Tax Act (FUTA), federally recognized Indian tribes and related establishments are now classified in local government and assigned a local government ownership code.

The average annual wage of all Connecticut workers increased by 3.3 percent to $46,990 in 2001. The annual pay of private industry workers grew 3.6 percent in 2001 to $47,737, while pay for government sector employees was $42,447, an increase of 2.2 percent.

The number of business establishments in the State remained virtually unchanged in 2001. Total business establishments totaled 108,132 at the end of 2001, compared with 108,114 at the end of 2000. Total private establishments numbered 104,447 in 2001 versus 104,441 in 2000. Government work sites equaled 3,685 for 2001 while totaling 3,673 at the end of the prior year.

Data based on NAICS

Monthly employment and quarterly wage data are compiled from reports from employers who employ workers 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 98 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.

This article presents the first look at Connecticut's annual average industry employment, wages, and establishment count based on the North American Industry Classification System (NAICS) structure. NAICS categorizes business establishments on a production-oriented approach, how products or services are created, as opposed to the Standard Industry Classification (SIC) system which categorized business establishments based on the end product produced or service provided. NAICS is the result of a cooperative effort on the part of the statistical agencies of the United States, Canada, and Mexico. To learn more about NAICS, access the Census Bureau web site at http://www.census.gov/epcd/www/naics.html.

Employment

The NAICS sector agriculture, forestry, fishing and hunting, recorded the largest percentage increase in annual average private employment over the previous year, up 3.1 percent. (See the complete table on pages 4 and 5.) The two NAICS sectors that are the most sensitive to changes in government spending showed the next highest percentage gains in employment during 2001. Health care and social assistance and educational services had employment gains of 1.9 percent and 1.6 percent, respectively. The other NAICS sectors to show increased employment during 2001 were: Construction, 1.5 percent; other services, except public administration, 1.5 percent; and finance and insurance, 1.1 percent.

On the other side of the ledger, arts, entertainment, and recreation had the largest percentage decline in employment, dropping 41.6 percent during 2001. As explained earlier, this drop is attributed to the reclassification of Indian tribal councils and related establishments from private ownership to local government ownership. Mining showed the next largest drop in annual average employment, 4.9 percent, followed by administrative and waste management, 4.3 percent, and transportation and warehousing also down 4.3 percent. The remaining NAICS sectors recorded the following declines in annual employment: Utilities, 4.1 percent; manufacturing, 3.5 percent; information, 3.2 percent; management of companies and enterprises, 2.9 percent; real estate and rental and leasing, 2.0 percent; accommodation and food services, 0.9 percent; retail trade, 0.8 percent; professional and technical services, 0.8 percent; wholesale trade, 0.3 percent.

The Bureau of Labor Statistics (BLS) and its NAICS partner agencies have further grouped NAICS sectors upwards to form the top level goods-producing and service-providing aggregations referred to as "domains." The goods-producing domain is composed of the four NAICS sectors agriculture, forestry, fishing, and hunting; mining; construction; and manufacturing. The service-providing domain encompasses the remaining NAICS sectors.

Aggregating 2001 annual Connecticut employment in this manner reveals that 17.9 percent of the State's employment was in the goods-producing domain, while 82.1 percent of the total employment was in the service-providing domain. An even closer look highlights that the goods-producing domain's annual average employment declined 2.3 percent during 2001, which accounted for 78.8 percent of the State's drop in employment. The service-providing domain's employment dropped by only 0.1 percent during the same period.

Wages

Average annual pay levels for Connecticut varied greatly by industry. However, it should be taken into account that the annual pay level among industry sectors are affected by various factors, including hours worked (full or part-time), the composition of the workforce, and weather and seasonal influences.

The highest average annual wage was earned in the management of companies and enterprises (i.e., corporate headquarters) sector, $104,884. Workers in this industry sector, which account for less than two percent of private sector employment, earned an annual wage that was 119.7 percent higher than the State average for private sector employees in 2001, which was $47,737. The next highest pay level was found in the finance and insurance sector, $98,242. Workers in this sector earned a little more than double that of all private sector employees. Within the finance and insurance sector are found the highest NAICS sub-sector (three-digit) level wages, $256,972 and $108,283, respectively, for securities, commodity contracts, investments workers (NAICS 523) and funds, trusts, and other financial vehicles employees (NAICS 525). Ranking third highest in sector-level average annual pay were workers in the utilities sector, at $78,096, a figure 63.6 percent higher than the private statewide average.

On the opposite end of the scale, workers in the accommodation and food services sector recorded the lowest pay, $15,519, 67.5 percent less than the private sector statewide average. The next lowest pay was earned in the agriculture, forestry, fishing and hunting sector, $23,922, and the arts, entertainment, and recreation sector, $24,548.

The largest over-the-year percentage pay increase in the private sector was recorded in the finance and insurance sector, 8.5 percent. The next highest increases were in administrative and waste management, 6.9 percent, followed by educational services, 5.7 percent. The largest over-the-year percentage pay decrease occurred in the management of companies and enterprises sector, down 6.3 percent. Other industry sectors to show deceased annual wages were retail trade, 3.6 percent; arts, entertainment, and recreation, 2.4 percent; agriculture, forestry, fishing and hunting, 0.4 percent; and information, 0.2 percent.

Reviewing annual average wage figures at the domain level shows that workers in the goods-producing sectors earned $53,464 during 2001. This represented an increase of 2.5 percent over the previous year. Goods-producing workers earned an annual wage that was 13.8 percent higher than the average for all Connecticut workers during 2001. Workers in the service-providing sectors earned $45,579 for 2001, an increase of 3.6 percent over the previous year, but three percent less than the average for all Connecticut workers and 14.7 percent less than their counterparts in the goods-producing industries.

Labor Market Areas

Among Connecticut's ten Labor Market Areas (LMAs), only New London and Danielson showed an increase in annual average employment during 2001 due, in part, to hiring at the Indian tribal-run casinos. The New London area's total annual average employment for 2001 was 131,328, up 1.5 percent from the previous year. The Danielson LMA showed an increase of 0.4 percent, to 21,969. The largest percentage decline in employment among LMAs was found in the Stamford and Waterbury areas. Both of these LMAs showed a 1.8 percent drop in employment during 2001. Stamford's employment level dropped to 205,496, while the Waterbury LMA's declined to 84,330.

Every LMA posted increased wages during 2001. As with employment, the Danielson LMA had the greatest percentage increase in its annual average wage, up 8.6 percent to $34,213. The Danbury and New London LMAs had the next greatest percentage increase, both up 4.5 percent. The Danbury LMA's 2001 earnings level was $45,231, while workers in the New London LMA earned $38,175.

The highest average annual wage earned during 2001 was in the Stamford LMA, $80,251, a figure 70.8 percent higher than the statewide average. The lowest average wage was earned in the Torrington LMA, $33,823. Torrington LMA workers earned 28.0 percent less than the statewide average.

The UI covered annual employment and wages by industry data are also available at http://www.ctdol.state.ct.us/lmi/lmidata.htm#covwages.

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Out-of-State Executives Impressed with Connecticut
August 2002 Economic Digest Article

According to a just released survey, the State's initiative to promote Connecticut as one of the nation's fastest growing technology hot spots is producing results. Over 80 percent of nearly 200 technology industry executives, responding to a telephone survey, indicated that their image of Connecticut as a growing technology "hot spot" was enhanced after visiting the "Technology...You Belong in Connecticut" exhibit at the Gartner Symposium/ ITxpo 2002 in San Diego,  California. The symposium is the largest gathering of information technology (IT) professionals worldwide. 

The symposium was the latest element of the You Belong in Connecticut campaign, implemented on behalf of thousands of Connecticut based BioScience and IT companies, by the Connecticut Technology Council  (CTC), CURE - Connecticut's BioScience Cluster, and the State Department of Economic and Community Development (DECD). CTC is the "driver" of the State's Software and Information Technology Cluster.  Among the advantages touted are Connecticut's strategic location between  Boston and New York, top rankings nationwide for number of  patents issued, financial resources available for investment, educational system, and investments in research  and development with commercial potential. The survey was conducted by Strategic Sales and  Marketing. 

More information about the You Belong in Connecticut campaign is available at www.YouBelongInCT.com.

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Housing Update

Commissioner James F. Abromaitis of the Connecticut Department of Economic and Community Development today announced that Connecticut communities authorized 782 new housing units in June 2002, a 1.4 percent decrease compared to June of 2001 when 793 units were authorized.

The Department further indicated that the 782 units permitted in June 2002 represent a 18.3 percent decrease from the 957 units permitted in May 2002. The year-to-date permits are up 5.9 percent, from 4,529 through June 2001, to 4,796 through June 2002.

The Danbury Labor Market Area added 86 new housing units, an increase of 17 units compared to a year ago. Danbury led all Connecticut communities with 33 units, followed by Middletown with 19 and Vernon with 18 units. From a county perspective, Windham County had the largest percentage gain (53.1 percent) compared to a year ago.

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