State of Working Conn. 2010

EMBARGOED UNTIL
Friday, September 3, 2010

9:00 AM
State of Working
Connecticut, 2010
Joachim Hero, M.P.H.

Orlando Rodriguez, M.A.
Jacob Siegel
September 2010
Produced with the generous support

of the Stoneman Family Foundation,
The Melville Charitable Trust, and the
staff of the Economic Policy Institute.
The State of Working Connecticut, 2010
I. Introduction ...................................................................................................................... I-1
II. The Face of Working Connecticut

o Gender......................................................................................................................... II-1
o Race and Ethnicity..................................................................................................... II-2
o Educational Attainment ............................................................................................ II-4
o Age ............................................................................................................................... II-6
III. Payroll Employment

o Total Payroll Employment ....................................................................................... III-1
o Employment by Industry Sector ............................................................................. III-3
o Employment Trends in Occupation Groups by Wage ........................................ III-7
IV. Unemployment, Long-Term Unemployment, and Underemployment

o Unemployment .......................................................................................................... IV-1
o Unemployment by Town ......................................................................................... IV-2
o Long-Term Unemployment ..................................................................................... IV-5
o Underemployment ..................................................................................................... IV-6
o Unemployment, Long-Term Unemployment, and Underemployment by
Demographic Category ............................................................................................. IV-7
V. Wages
o Hourly Wage Trends Overall ................................................................................... V-1
o Annual Wages............................................................................................................. V-5
o Wages and Demographics ........................................................................................ V-6
o Wage Inadequacy ....................................................................................................... V-10
VI. Conclusion ....................................................................................................................... VI-1

I. Introduction
In an August 27 Gallup poll, over 60% of respondents said they believed the economy is getting worse. 1
Yet, in many ways the current economy, weak and fragile as it is, represents a better alternative to what
might have been a greater disaster. A series of bold federal actions have appeared, so far, to have brought
the national economy away from the brink of a second Great Depression. While there is ongoing debate
over whether the federal stimulus was well designed or whether the country will need to do more, reputable
economic analyses have found that the effect of the federal stimulus on jobs and the economy has been
substantial, lifting national GDP by as much as 4.1% in 2010 and reducing unemployment by perhaps a
percentage point or more. 2 To date, close to $4 billion in federal funds have come to Connecticut in the
form of grants, loans, and entitlement benefits from the federal government. 3 Regional estimates based
upon projections from the Council of Economic Advisors have calculated that stimulus policies will help
save or create 44,000 jobs in Connecticut in 2010, almost half the total jobs lost over the recession. 4
However, a recent string of disappointing economic data suggests that the economic momentum that began
in around January of this year is now sputtering just as the federal stimulus is winding down. Additionally,
while several leading economic indicators have improved since their recession lows, unemployment remains
stubbornly high and has offered no signs of easing. Without an improvement in employment, there will not
be the wealth generation necessary to reignite consumer demand and sustain a recovery. As federal stimulus
funds begin to run out, some experts worry that the stimulus may not have been equal to the size of the
crisis. Adding to these worries is the steady wave of anti-stimulative budget cutbacks at the state and local
level that have lead to service reductions, layoffs, and public divestment—all of which harm economic
recovery. Avoiding further damage to the economy and returning to growth will depend in part on actions
of government on both the federal and state levels.
Potentially adding to public dissatisfaction is that much of the recent economic progress has not directly
affected the majority of the workforce. In fact, in some ways the current economy feels like a continuation
of trends that have occurred throughout this decade, where the rewards of economic improvement are
concentrated among a small and increasingly wealthy segment of the population while the pain is
concentrated among poor, uneducated, and minority workers. This feeling was exemplified when many of
the country’s largest corporations managed to remain profitable even as the economy struggles and millions
of Americans are unemployed.
The State of Working Connecticut: 2010 provides a detailed look at the most recent 2010 employment and
unemployment data in Connecticut, as well as wage and salary data by distribution and demographic groups
up until 2009. It compares short- and long-term labor market performance in Connecticut to the nation and
to surrounding states, reports the relative growth and contraction of various employment sectors, tracks
state wage data over the last couple decades, examines trends in unemployment and underemployment, and,
when possible, compares labor market indicators by gender, race, and education. This year’s report also
includes a local area supplement that provides wage and unemployment data for each of the state’s Labor
Market Areas.
1 Gallup Daily. U.S. Economic Outlook. http://www.gallup.com/poll/110824/Gallup-Daily-US-Economic-Outlook.aspx Site
last accessed August 31st, 2010.

2 Alan Blinder & Mark Zandi. “How the Great Recession Was Brought to an End” July 27, 2010; Congressional Budget Office,
“Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from April 2010
through June 2010.” Pub. No. 4201. August 2010.
3 Funds awarded and received can be tracked online through a dedicated website.
http://www.recovery.ct.gov/recovery/site/default.asp Site last accessed August 31st, 2010.

4 Estimates calculated by Jeff Thompson, of the Political Economy Research Institute.
Connecticut Voices for Children I-1

The State of Working Connecticut puts special focus upon economic indicators that best reflect labor
market conditions for people in the labor force. While movement in indicators such as financial markets,
the national trade balance, and GDP are closely watched as barometers of broad economic health, they are
not always meaningful to the human component of economic conditions.
And for many workers, labor market conditions in

Connecticut remain poor. Connecticut’s July 2010 Regional Variation. While statewide
unemployment level, at 8.9%, is modestly lower than the statistics on employment, unemployment
March 2010 peak of 9.2%, but is still higher than at any and wages provide insight into the net
point from 1977 until the current recession. Additionally, impact of economic conditions on labor
long-term unemployment and underemployment have market indicators, they also mask
risen to record highs. In 2009, Connecticut’s long-term significant local variation.
unemployment rate—the proportion of Connecticut’s
unemployed who have been unemployed for over 26 For information about employment,
weeks—was 4th highest in the nation at 36.7%. unemployment and wages in a particular
Compared to national levels, overall unemployment in region of the state, please refer to our
Connecticut remains slightly lower (9.5% vs. 8.9%), but supplemental report: The State of Working
job losses in Connecticut have mirrored national losses, Connecticut 2010, Trends in Local Labor
with both experiencing around a 6% drop in jobs over Market Areas. (LMA).
the recession.
Unfortunately, the dramatic disparities in employment by demographics and geography make the reality in
Connecticut more troubling than it appears. In Connecticut, unemployment and underemployment rates for
African Americans and Hispanics are higher than national rates among these groups and close to two times
the unemployment rate for whites. In 2009, a quarter of African Americans and Hispanics were either
unemployed, working part-time against their preference, or too discouraged to be looking for work.
Disparities along lines of education were even stronger, with 2009 data showing workers without a high
school degree were four times more likely to be unemployed than workers with a bachelor’s degree or
higher. Summary measures of the labor force in Connecticut obscure the extreme and harmful differences
in labor conditions between demographic and geographic communities within the state.
Wage data in Connecticut from 2009 demonstrate the continuation of trends that undermine future
economic prosperity and threaten the well-being and economic security of our families. Wages at the lowest
levels have decreased over the past decade and are lower today than they were in 1989, a level of decrease
that is among the largest in the country over this period. At the same time, wages at the highest levels have
increased more quickly than any other wage level and by some of the highest margins in the country,
continuing a pattern of divergence that has occurred for decades. Wages in Connecticut also continue to be
highly unequal by race.
Over the past economic cycle, economic data suggest that high-income and high-education workers reap the
highest benefit from an expanding economy, while low-income, low-education, and minority populations
suffer the highest consequences when the economy turns sour. Until the rewards and consequences of our
economy are shared by all the people whose hard work contributes to that economy, we cannot truly say
that economy conforms to our basic human values.
Connecticut Voices for Children I-2

II. The Face of Working Connecticut
Any policies that seek to strengthen the workforce should be responsive to its composition and dynamics.
A review of the Connecticut workforce in 2009 shows that it is highly educated, slightly older than in most
other states, and slightly less racially/ethnically diverse than the U.S. average. Over time, Connecticut’s
workforce has grown older, more educated, and more diverse, mirroring the nationwide trend. The
following section details Connecticut’s workforce composition along lines of gender, race/ethnicity,
education, and age.
Gender
Connecticut’s labor force 1 in 2009 Labor Force Proportion & Participation Rates by Gender
was 52% male and 48% female.
Women make up a slightly greater Proportion Participation Rates
proportion of the labor force in Male Female Male Female
Connecticut than they do in the United States 53% 47% 72% 59%
nation as a whole, and the New England 52% 48% 73% 63%
proportion of the workforce that Connecticut 52% 48% 74% 64%
is female is higher in Connecticut
than it is in all but six of the other TABLE II-1 Source: CT Voices and Economic Policy Institute
analysis of CPS data.
states in the U.S.
Men, however, are still much more likely to participate in the workforce than women. The labor force
participation rate 2 , which measures the proportion of a population that is either working or seeking
employment, shows that the proportion of women who participate in the workforce is far smaller—
nationally, regionally, and statewide—than the proportion of men who participate in the workforce. 3 (Table
II-1.)
Male participation rates in Connecticut exceed national rates by two percentage points while the state’s
female participation rate is five percentage points higher. Among other states in New England, both
Connecticut’s female labor force participation and male labor force participation rates are slightly higher
than average.
1 The labor force includes all persons who are either employed or unemployed. Workers are classified as employed or
unemployed based on their employment status during a “reference week,” the week preceding the monthly sampling on which
the Current Population Survey (CPS) is based. As discussed further in section IV, there may be individuals without jobs who are
not considered “unemployed” (e.g., because they have stopped looking for work). These people are thus not considered part of
the labor force as defined here.
2 The labor force participation rate measures the labor force as a proportion of the civilian, non-institutional population
(defined as persons aged 16 years and older who are not on active duty in the Armed Forces and not inmates of institutions).
3 The large difference between participation rates and labor force proportion by gender may stem in part from the exclusion by
the CPS of non-civilian and institutionalized populations, which tend to be disproportionately male. While male participation
rates are much higher, the rate is applied to a smaller overall population.
Connecticut Voices for Children II-1

Figure II-1, below, shows that between 1979 and 1997, the state’s gender gap in labor force participation
declined by more than half, mirroring national trends. With a larger proportion of Connecticut women in
the workforce, the importance of family-friendly policies that maximize the ability of parents to assure
competent care of their children, while contributing to the economy, also has grown. At the same time,
while the participation rate for females increased steadily in the years preceding 1991, progress has stalled,
and the rate has consistently remained between 60 and 65% for the past two decades. Though the female
participation rate increased from a 15-year-low of 60.0% in 2004 to 63.9% in 2009, bringing the gender gap
in the labor force participation rate gap to a historic low of 10.1%, it is not certain whether this is the
beginning of a long-term trend toward further narrowing of the gap.
Connecticut's labor force participation rate by gender,

1979-2009
Labor Force Participation Rate
85.0%
80.0%
75.0%
Male
70.0%
Female
65.0%
60.0%
Figure II-1 Source: CT Voices and EPI Analysis of Current Population Survey Data
55.0%
50.0%
Figure II-2 Source: CT Voices and Economic Policy Institute analysis of CPS data.
Race and Ethnicity

Connecticut’s workforce is less racially and ethnically diverse than the country as a whole but more diverse
than New England as a region, as shown in Figure II-2, below. Connecticut’s labor force is 77% White, 8%
African-American, 9% Hispanic, and 4% Asian/Pacific Islander, generally reflecting the racial/ethnic
composition of Connecticut’s total population. (Data released by the United States Census Bureau shows
that in 2008, Connecticut’s population was approximately 74% White Non-Hispanic, 9% Black Non-
Hispanic, 12% Hispanic/Latino (of any race), and 3% Asian/Native Hawaiian and Other Pacific Islander.) 4
By comparison, the United States labor force is 68% White, 11% African American, 15% Hispanic, and 5%
Asian/Pacific Islander.
4 The race and ethnicity data for the total population of Connecticut is from the United States Census Bureau’s American
Community Survey (ACS), 2008. Labor force data on race and ethnicity are based on Economic Policy Institute (EPI) analysis
of the Census Bureau’s Current Population Survey (CPS). The CPS uses four racial categories: White, Black, Asian or Pacific
Islander, and American Indian, Aleut, Eskimo. A separate question determines Hispanic origin. In this report, "Hispanic" refers
to any person with Hispanic origin, while "White", "Black", and "Asian / Pacific Islander" refer to non-Hispanic person of that
race.

Connecticut's labor force by race/ethnicity, 2009
100%
90%
80%
70%
60%
Asian/Pacific islander
50% Hispanic
40% African-American
White
30%
20%
10%
0%
Connecticut New England United States
Racial and ethnic demographics in the workforce have been changing in Connecticut toward greater
diversity over the past several decades. Since 1980, the White share of the Connecticut labor force has
declined from 91.1% to 77.3%, while the Hispanic share has increased from 2.3% to 9.2%, the African-
American share has increased from 6.0% to 8.4%, and the Asian/Pacific Islander share has increased to
4.2%. 5 The demographic shift in Connecticut generally mirrors the shift that has occurred throughout the
United States, which has largely been driven by a growth in the Hispanic population 6 . Connecticut’s
proportion of Hispanic workers grew by more than four and a half times since 1980, while the national
proportion has increased by close to three times. Figure II-3, below, shows the dynamics of Connecticut’s
labor force composition by race/ethnicity over the past three decades.
5 The Asian/Pacific Islander share of the labor force in 1980 and 1985 was too small to meet sample size standards, though was
likely slightly higher than 0.0%.
6 While both Connecticut and the nation as a whole have experienced growth in their Hispanic populations, it is important to
recognize differences in the composition of those populations. Over half of Hispanics in Connecticut are Puerto Rican, while
only 10% are Mexican. Nationwide, almost two-thirds of Hispanics are Mexican, while only about 9% are Puerto Rican.

Minorities are an increasing portion of
Connecticut's labor force
100%
90%
80%
70%
60%
50%
40%
Asian/Pacific islander
30%
Hispanic
20%
African-American
10% White
0%
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Figure II-3 Figure II-2 Source: CT Voices and Economic Policy Institute analysis of CPS data.
Educational Attainment
Labor Force by Educational Attainment
Connecticut’s labor force is
highly educated: 40% of our Less than High Some Bachelor's or
high school school college higher
workers hold bachelor’s
degrees or higher, 25% have
United States 11% 29% 29% 31%
some college education (but
no degree higher than an New England 8% 28% 26% 39%
associate’s), and only 8% have
less than a high school Connecticut 8% 28% 25% 40%
education, as illustrated in
Table II-2 Source: CT Voices and Economic Policy Institute analysis of CPS data.
Table II-2. This compares
favorably to national averages of 31% with bachelor’s degrees or higher, 29% with some college, and 11%
lacking a high school degree. Among the 50 states, only Massachusetts, Colorado, and New Jersey had
higher shares of their workforce holding bachelor’s degrees or higher in 2009.
Connecticut’s labor force has become significantly better educated since 1980. The percentage of the labor
force with at least a bachelor’s degree has increased by 15 percentage points over the past 30 years, while
the percentage of the labor force lacking a high school diploma has decreased by 12 percentage points over
the same period of time (see figure II-4, below). Though these trends are common around the country
and reflect the increasing value of a college education in a modern economy, Connecticut's labor force
consistently has been more educated than the nation as a whole (see figure II-5, below).

Connecticut's workforce is increasingly educated
Proportion of the labor force
45.0%
40.0%
35.0%
30.0%
Bachelor's or higher
25.0%
Lacking high school
20.0%
diploma
15.0%
10.0%
5.0%
0.0%
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
Percent of labor force with bachelor's degrees or higher

45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
Connecticut
10.0%
Nation
5.0%
0.0%
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

Age
Labor Force by Age
Connecticut’s workforce 16-24 years 25-54 years
55 years and
has slightly more workers older
over the age of 55 than the United States 14% 67% 19%
national average, which has New England 14% 66% 21%
been true for many years. Connecticut 13% 66% 21%
As seen in table II-3, Table II-3 Source: CT Voices and Economic Policy Institute analysis of CPS data.
Connecticut has a smaller
share of the workforce who are young (16-24 years) than the national average (13% vs. 14%), 7 a smaller
share of the workforce who are between 25 and 54 years old (66% vs. 67%), and a larger share of the
workforce who are 55 years and older (21% vs. 19%).
Workers over 55 make up an increasing portion of the

Connecticut labor force; workers between 25-54 declining
80.0%
70.0%
60.0% 25-54 yrs
50.0%
40.0% 55 yrs and older
30.0%
20.0%
10.0%
0.0%
Trend data on the share of Connecticut’s workforce by age group, shown in Figure II-6 above, reveal
several noteworthy patterns. Between 1996 and 2009, workers aged 25 to 54 - the ‘prime age’ workforce -
declined from 74.6% to 66.2% of Connecticut’s labor force, a decrease of 11% (or 8.4 percentage points).
During this same period, the share of Connecticut’s workforce made up of older workers increased by 67%
(from 12.5% of the labor force to 20.9% of the labor force).
The increase in the workforce composition is explained by the entry of the baby boom generation into the
oldest age category, coupled with the low fertility rates of succeeding generations. The diverging trends of
old and young present a challenge for the future, as a comparatively large elderly population will be
dependent on a comparatively smaller younger population to support a variety of programs and services
on which older populations rely more heavily. According to projections from the Connecticut State Data
Center at the University of Connecticut, the number of Connecticut residents over the age of 65, per 100
residents between the ages of 20 and 64, will increase from 23 in 2005 to 30 by 2020 and 40 by 2030 8 .
7 Connecticut has a greater proportion of young people going on to post-secondary educational institutions than the national
average. This likely is one factor contributing to the relatively smaller share of our young population who are in the workforce.
8 Population projections from the Connecticut State Data Center, University of Connecticut. Available online at
http://ctsdc.uconn.edu/projections/state_wide.html.

However, the growth of Connecticut’s generally younger immigrant population may help to mitigate this
imbalance. 9
Change in Connecticut’s workforce composition is not solely due to changes in the underlying population
composition, but also to changes in the rate at which different age groups participate in the labor force.
Examining trend data, we also see a marked decline in the labor force participation rate of Connecticut’s
young people. Between 1979 and 2009, the labor force participation rate of 16-24 year olds in Connecticut
declined by 14 percentage points, from 72% to 58% (in part reflecting increased enrollment in post-
secondary education institutions). While the overall change in the labor force participation rate of older
workers has not been dramatic over this time period – increasing from 39% in 1979 to 45% in 2009 – the
more recent trend is noteworthy. The labor force participation rate of Connecticut workers aged 55 and
older has grown significantly since hitting a 25-year low in 1997 of 30%. The 2009 participation rate for
older workers represents a 15-percentage point increase since this 1997 low-point (see figure II-6, below).
It seems likely that the labor force participation rate for older workers will continue to grow as the aging
baby boomers move into what would normally have been considered their ‘retirement years’. Better health
and economic necessity (along with a desire to remain actively employed and to continue to enjoy a certain
standard of living) will result in a higher proportion of this older workforce actively working. Additionally,
recent damage to retirement accounts has caused many older workers to say that they intend to work
longer before retiring and causing some retirees to return to the labor force. 10
Since 1997, labor force participation rate increasing

among older resident; others staying constant
Labor Force Participation Rate
100.0%
90.0%
80.0% 25-54 yrs
70.0%
55 yrs and
60.0% older
50.0%
40.0%
30.0%
20.0%
FIGURE II-7 Source: CT Voices and Economic Policy Institute analysis of CPS data.
9See Rafael Mejia, Priscilla Canny, Immigration in Connecticut, a Growing Opportunity. Connecticut Voices for Children, 2007.
10Colette Thayer. Retirement Security or Insecurity? The Experience of Workers Aged 45 and Older. AARP Knowledge Management.
October 2008. http://assets.aarp.org/rgcenter/econ/retirement_survey_08.pdf;
Dave Carpenter. Putting off Retirement can Make a Huge Financial Difference. The Associated Press. September 29th, 2008.

III. Payroll Employment
Total Payroll Employment 1
At the peak of the last expansion, just before Connecticut’s employment was to enter into one of the most
precipitous declines in decades, Connecticut had 1,711,500 non-farm, payroll jobs. Over the course of the
following 21 months, Connecticut would lose 103,400 jobs—a rate of close to 5,000 jobs a month—
bottoming out at 1,608,100 jobs in December of 2009. Connecticut has since added back 12,000 jobs,
recently recording 1,620,100 jobs in July, representing 12% of the total jobs lost over the recession. (Figure
III-1, below.) At the present rate of job growth since last December, it would take almost four and a half
years to return to the level of jobs that existed before the recession began. Connecticut’s current level of
employment is equal to levels seen in the late 1990s.
Employment in Connecticut: July 2000 to June 2010

Employment in thousands Recession months
1720.0
July 2000: Jobs peak at March 2008: Jobs peak
1,701,100 at 1,711,500
1700.0
July 2003: jobs stop
1680.0 their decline at
1,640,300
1660.0
1640.0
Dec 2009: 1,608,100
1620.0 jobs; lowest since 1997
1600.0
FIGURE III-1 Source: CT Department of Labor, Labor Market Information Data, August 2010.
1 “Payroll Employment” is the number of employed persons on established payrolls, working full or part-time, but excludes the
self-employed and farm and agricultural workers. Persons who are on the payroll of more than one establishment are counted as
employed at each site (i.e., multiple times). Increased payroll employment indicates some combination of job growth, population
growth, and changes in people’s willingness to work. Similarly, decreased payroll employment would result from a contracting job
market, as well as impacts from decreased population growth, and reduced willingness of people to work. Source: Bureau of
Labor Statistics, Current Employment Statistics (CES) data.
Connecticut Voices for Children III-1
Table III-1, to the right, shows the Employment
percentage employment decline over the change from
Employment
recession in each state in New England, State beginning* of
change since
starting from the beginning of job loss in recent
recession to recent
each state and ending at the job low- employment low
employment low
2
point. Connecticut’s job market
contracted by 6.0%, from the peak of the United States -6.1% 0.5%
expansion in 2007 to its employment low-
point in late 2009. Since then, Connecticut -6.0% 0.7%
Connecticut employment has crept up by Maine -5.6% 1.4%
a little less than one percent. Employment Massachusetts -5.0% 1.9%
in Connecticut over the recession and New Hampshire -4.8% 1.4%
recovery has mirrored national trends, Rhode Island -9.6% 0.7%
declining by roughly the same proportion Vermont -5.7% 0.1%
over the economic contraction and * In this table, the beginning and end of each state's recession are marked by the
maximum and minimum levels of employment since the beginning of 2007
increasing by an only marginally higher
percentage over the expansion. Within TABLE III-1 Source: CT Department of Labor, Labor Market
New England, employment over the Information Data, August 2010.
recession and recovery in Connecticut has
performed slightly worse than average,
with New Hampshire and Massachusetts performing the best and Rhode Island performing the worst.
While the decline in employment has not been quite as severe in Connecticut as it has been in the rest of the
U.S., Connecticut entered into the recession after a sluggish recovery that barely brought employment levels
past highs in 2000. By comparison, the country as a whole going into the latest recession had recovered
three times the number of jobs lost in the 2001 recession. This divergence between national employment
trends and employment trends in Connecticut is illustrated in Figure III-2, below, which plots employment
levels in Connecticut and the United States as a percentage of employment in July 2000, an economic high
mark. Connecticut’s slow job growth compared to the rest of the country may be partially explained by
lagging population growth among the working-age population (16-64). According to the U.S. Census
Bureau, Connecticut’s working-age population has grown by 5.7% since 2000, while nationwide the working
age population has grown by 8.3% in that time. Slow population growth in this age group, however, could
be symptomatic of a less attractive job market in Connecticut than in other states. Even accounting for
differences in population growth, Connecticut’s job growth has lagged the nation’s since 2000.
2The end of the recession has not officially been declared by the National Bureau of Economic Research, but most states began
seeing employment gains at some point over the last year. Since states tend to enter and exit recessions on slightly different
schedules, table III-1 determines state employment losses over the recession by comparing the employment high-point with the
employment low-point of each state since the beginning of 2007.
Connecticut's employment growth lagged national growth
over last recovery period
Employment as a % of July 2000
1.06
1.04
1.02
United States
0.98
0.96
Connecticut
0.94
Employment by Industry Sector
Figure III-3, below, shows July 2010 employment estimates in Connecticut’s twelve largest industry sectors.
Above each sector bar, arrows and percentages indicate the net employment change in that sector since
March 2008, the beginning of the recession in Connecticut. These percentages are net of employment
changes over both Connecticut’s recessionary (March 2008 – December 2009) and expansionary (January
2010 – July 2010) months and represent the most recent employment estimates relative to employment rates
at Connecticut’s pre-recession peak. Sectors examined in this report include Educational and Health
services, with 308,500 jobs (19% of all non-farm employment), Government (which includes Indian tribal
government employment 3 ) (15%), Professional and Business Services (12%), Retail Trade (11%),
Manufacturing (10%), Leisure and Hospitality (9%), Financial Activities (8%), Wholesale Trade (4%), Other
Services (4%), Transportation and Utilities (3%), Construction (3%), and Information (2%).
Employment in most industry sectors remains well below levels at the beginning of the recession.
Construction, the hardest hit sector as a proportion of its size, remains over 25% smaller than it was in
March 2008. The Wholesale trade, Information, Professional and Business Services, and Manufacturing
sectors are each at least 10% smaller than they were in March 2008. Only the Health and Education sector is
significantly larger today than it was at the beginning of the recession.
3 Indian tribal government employment includes persons employed at Connecticut’s casinos at Foxwoods and Mohegan Sun.
Connecticut jobs by sector, July 2010, including percent
change since the beginning of the recession
350.0 4.6%
Seasonally Adjusted Employment, July…
300.0 2.7%
% Change since March 2008
250.0
5.0% 10.1%
10.0%
200.0
8.4% 0.7%
150.0 308.5
25.2 245.7
100.0 11.0 8.9% 5.0% 11.7%
% 169.5 181.4 187.6
% 132.6 139.1
50.0
47.9 51.1 60.4 61.6
34.0
0.0
Construction
Financial Activities
Business Services
Transportation and
Employment
Retail Trade
Wholesale Trade
Information
Other Services
Manufacturing
Hospitality
Health Services
Educational and
Leisure and
Government
Professional and
Utilities
Most CT jobs have been lost in Professional and Business

Services, Manufacturing, Constrution, and Financial Activities
Thousands of jobs gained/lost since March 2008 (Seasonally Adjusted)
13.5
15
10
5 0.9
0
-5
-10 -4.2 -4.7 -3.2
-8.2 -6.8
-15 -9.5
-20 -12.1
-25 -17.2 -18.9
-21.0
-30
-35
Information
Construction
Other Services
Manufacturing
Business Services
Employment
Transportation and
Wholesale Trade
Retail Trade
Hospitality
Health Services
Leisure and
Educational and
Government
Professional and
Utilities

Figure III-4, above, shows the number of jobs lost in each sector in Connecticut between the total non-farm
employment high-water mark in March 2008 and the latest employment estimates in August 2010.
Connecticut lost 21,000 jobs in the Professional and Business Services sector, 18,900 jobs in the
Manufacturing sector, 17,200 in the Construction sector, and 12,100 in Financial Activities. The
Educational and Health Services sector was the only sector that continued to significantly add jobs through
the recession and into the recovery, with employment growing by 13,500.
Over the long-term, Connecticut’s economy has made a dramatic shift away from manufacturing
and towards educational and health services. Figure III-5, below, shows the change in Connecticut
employment from January 1990 to January 2010. Connecticut shed 141,100 net manufacturing jobs
between 1990 and 2009, more than five times the losses in any other sector over this period. Retail Trade,
Financial Activities, Wholesale Trade and Construction were among the sectors that currently have fewer
jobs than they did twenty years ago. Over the same period, Connecticut gained 113,500 net Education and
Health Services jobs. Connecticut also gained net jobs in Government, and Leisure and Hospitality.
Long-term employment shifts in Connecticut, by sector

Thousands of jobs gained/lost Jan 1990 - January 2010 (Seasonally Adjusted)
150 113.5
100
50 28.6 36.5
2.7 8
0
-8.7 -0.6 -12
-50 -15.6 -19.3 -24.8
-100
-150
-141.1
-200
Business Services
Retail Trade
Information
Construction
Other Services
Manufacturing
Employment
Transportation and
Wholesale Trade
Hospitality
Health Services
Leisure and
Educational and
Government
Professional and
Utilities

The decline in Manufacturing and the growth in Education and Health Services account for the majority of
compositional change in the Connecticut workforce since 1990. Figure III-6, below, shows the seven
largest employment sectors and the proportion of the workforce that each represents in 1990 and in 2009.
In 1990, Manufacturing jobs accounted for almost 20% of the total non-farm workforce in Connecticut,
while Education and Health sector jobs accounted for 12%. By 2009, Manufacturing jobs had declined to
11% of the non-farm workforce (approaching half the proportion in 1990), while jobs in the Education and
Health sector grew to account for 19% of the non-farm workforce. Within the Education and Health
sector in 2008, 81% of the jobs were in Health Services, and the remaining 19% were in Education.
Figure III-6 Source: CT Voices and Economic Policy Institute analysis of CPS data.
Connecticut’s decades-long contraction in the Manufacturing sector quickened substantially over the last
recession, when it lost 22,400 jobs in just less than two years. (Figure III-7, below.)
Manufacturing job losses quickened over the recession

Jobs in thousands (seasonally adjusted)
195.0
190.0
185.0
180.0
175.0
170.0
165.0
160.0

Employment Trends in Occupation Groups by Wage
The number of jobs in the highest-paying occupations in Connecticut has grown in recent years
while middle-wage occupations have had steep job declines. The Connecticut occupations that, on
average, pay very high wages saw a net increase in number of jobs over the past several years, according to
an analysis of the Occupational Employment Statistics from the Bureau of Labor Statistics. The number of
jobs in the highest-paying fifth of Connecticut occupations by 2009 median hourly wage increased by 5.6%
between the May 2006 and May 2009 reports 4 , a net gain of 13,450 jobs. While this group of occupations—
which have median hourly wages above $31.56—fared well, the four other quintiles all had decreases in
number of jobs over the same period, as illustrated in Figure III-8, below.
Highest paying occupations gained jobs,

moderate-wage jobs suffered greatest losses
% Change in jobs, May 2006 - May 2009
8%
6%
+13,450
Occupations by Median
4% Occupational Wage
2%
Highest fifth Fourth fifth Middle fifth Second fifth Lowest fifth
0%
Highest fifth
-2%
-3,200 -8,430
-4% -8,970
-6%
-8% -14,020
Figure III-8 Source: CT Voices Analysis of Occupational Employment Statistics Data.
Job losses were particularly acute among the middle fifth of Connecticut occupations by wage, those
occupations that have median hourly wages between $18.52 and $24.18. These occupations, which include
middle-class jobs such as carpenters, truck drivers, and bookkeepers, had a net loss of 6.8% of positions.
This trend is distressing, as it indicates a loss in jobs within occupations that have traditionally provided
living wages. Furthermore, as middle and high wage occupations typically require extensive training,
workers in middle-wage occupations that are most impacted by job losses will face barriers to acquiring
employment in a different well-paying occupation.
While workers in the middle fifth of occupations faced the greatest net job losses, lower wage workers did
not fare much better: positions in the second-lowest fifth of occupations by wage fell by 3.4%. While
workers in the lowest fifth of occupations by wage saw a comparatively small relative net decrease in jobs of
1.9%, there were more workers employed in these low-paying occupations than in any other group.
4 Each OES report is based on data from the six previous semiannual “panels.” Thus, the May 2006 figure was collected in
November 2003, May 2004, November 2004, May 2005, November 2005 and May 2006, while the May 2009 figure was collected
between November 2006 and May 2009. Occupations for which data was not reported in both 2006 and 2009 were excluded
from the present analysis.
Therefore, the absolute decrease of 8,430 jobs was significant, though fewer than the 14,020 jobs lost in the
middle fifth of occupations. Job losses in each quintile are summarized in Table III-2, below.
Highest fifth Fourth fifth Middle fifth Second fifth Lowest fifth
Customer Food prep.
Dentists,
Accountants, Carpenters, service reps., workers,
Examples of lawyers,
sales reps., truck drivers, office clerks, janitors,
occupations: registered
electricians bookkeepers medical home
nurses
assts. health aides
Median hourly
>$31.56 $31.56 – 24.19 $24.19 – 18.52 $18.52 – 14.47 <$14.47
wage:
Net change in
jobs (May 2006- +13,450 jobs -3,200 jobs -14,020 jobs -8,970 jobs -8,430 jobs
May 2009):
Percent change
in jobs (May +5.6% -1.5% -6.8% -3.4% -1.9%
2006-May 2009):
Table III-2 Source: CT Voices Analysis of Occupational Employment Statistics Data.

IV. Unemployment, Long-Term Unemployment, and Underemployment
Unemployment
High unemployment is a concern for a number of reasons beyond the stresses that joblessness places on
households. Unemployment is tightly linked with the poverty rate, which tends to fall and rise in tandem
with the unemployment rate. 1 High unemployment increases demands on state government budgets as laid-
off workers turn to government safety nets such as cash assistance, food stamps, and healthcare.
Additionally, continued high unemployment levels can exacerbate an economic recovery as workers who
lose their jobs cut back on spending.
The unemployment rate measures the number of people age 16 years and older who are seeking work but
do not have a job. 2 Individuals must have actively sought work in the prior four months and must be
immediately available for employment. Individuals who are not working and do not want to work, or have
stopped looking for work, are considered outside the labor force and not counted as unemployed.
In July 2010, the monthly

unemployment rate, seasonally Seasonally Adjusted Unemployment Rates
3
adjusted , in Connecticut was 8.9% Connecticut and U.S.
compared to the national rate of
9.5%. 4 Connecticut’s monthly 12%
unemployment rate has remained
lower than the national rate
throughout the recession (Figure 10%
IV-1). In October 2009,
Connecticut’s unemployment rate 8%
was 1.4 percentage points lower
than the national peak of 10.1%.
US
Since then, Connecticut’s 6%
CT
advantage has narrowed to 0.6
percentage points. Connecticut’s
current unemployment rate is 4%
slightly lower than its recession

high of 9.2%. One hopeful sign
that the unemployment may Figure IV-1 Source: CT Voices and Economic Policy Institute analysis of
continue to improve is in initial CPS data.
claims for unemployment insurance. In Connecticut, initial claims for unemployment insurance decreased
by 23%, between June 2009 and June 2010, compared to a 24% decrease nationwide. 5
1 Hoynes H, Page M, Stevens A. Poverty in America: Trends and Explanations. NBER Working Paper No. 11681. Oct 2005. This can
be verified in Connecticut by tracking Connecticut’s historical unemployment rate along with its historical poverty rate as
estimated by the Current Population Survey (CPS).
2 Only the non-institutionalized civilian population is included. Part-time workers are considered employed even if they are
looking for full-time employment.

3 Seasonal adjustment is a statistical technique that eliminates the influences of weather, holidays, the opening and closing of
schools, and other recurring seasonal events from economic time series. It provides the best comparison between differing
months of the year.
4 CT Department of Labor (http://www1.ctdol.state.ct.us/lmi/LAUS/lmi121.asp)
5 Federal Reserve Bank of Boston, http://www.bos.frb.org/economic/neei/summaries/ct.pdf
Connecticut Voices for Children IV-1

In the thirty-year period from 1979 to 2009, the annual unemployment rate in Connecticut has been lower
than the national rate with two exceptions (Figure IV-2, below). In 1992, the unemployment rate in
Connecticut was 7.7% compared to the national rate of 7.5%. Then in 1996, Connecticut had an
unemployment rate of 6.0% compared to the national rate of 5.5%. In 2009, Connecticut experienced its
highest unemployment rate in the past three decades, at 8.1%. However, this was notably lower than the
national rate of 9.3%, in 2009.
Thirty-Year Unemployment Trends

1979 to 2009
12%
CT Unemployment Rate
10%
New England Unemployment Rate
National Unemployment Rate
8%
6%
4%
2%
0%
Figure IV-2 Source: CT Voices and Economic Policy Institute analysis of CPS data.
Unemployment rates in Connecticut have trended closely with regional rates with Connecticut having
slightly lower unemployment than the New England region. In 2009, the annual unemployment rate for
New England was 8.2%, compared to 8.1% for Connecticut. In July 2010, the monthly unemployment rate
in New England was 8.8%, the lowest among the country’s nine geographic regions, which was slightly
lower than the 8.9% rate for Connecticut. 6
Unemployment by Town
Unemployment rates vary significantly among the 169 towns in Connecticut. (Map IV-1, below.) The
highest unemployment rates are found in some of the state’s most populous towns (Table IV-1, below). In
July 2010, the highest unemployment rate was in Hartford, at 16.9%, and the lowest was 4.3%, in
Colebrook. Geographic clusters of unemployment can be found in the urban areas surrounding Hartford,
Waterbury, New Haven, and Bridgeport.
6 Bureau of Labor Statistics http://stats.bls.gov/news.release/laus.nr0.htm

Unemployment Rate - July 2010
Connecticut Towns
Hartford
Map IV-1
Source: CT Dept. of Labor, Local Area Unemployment
Statistics (LAUS), not seasonally adjusted
In July 2010, seventy-one towns had an unemployment rate that was higher than the statewide rate of 8.1%.
Seven of the ten towns with the highest unemployment rates in July 2010 were also in the top ten list in July
2009. (Table IV-1.)
Top Ten Unemployment Rates

CT Towns - July 2010
July 2010 July 2009
Town Unemployment Unemployment
Rate Rate
Hartford 16.9 14.7
Waterbury 14.4 13.6
Bridgeport 13.7 12.5
New Haven 13.5 12.0
New Britain 13.2 12.3
East Hartford 12.5 11.1
Windham 12.0 10.8
Plainfield 11.9 10.4
Ansonia 11.7 9.9
Thompson 11.6 9.1
Table IV-1 Source: CT Dept. of Labor, Local Area

Unemployment Statistics (LAUS), not
seasonally adjusted

Between July 2009 and July 2010, the change in unemployment rates also varied significantly among
Connecticut towns. (Map IV-2, below.) The largest increase in unemployment rates, at 2.7%, was in
Hampton. Statewide, some of the largest increases in unemployment rates were in rural towns (Table
IV-2, below.)
Change in Unemployment Rate - July 2010
Connecticut Towns
Hartford
Map IV-2
Source: CT Dept. of Labor, Local Area
Unemployment Statistics (LAUS), not
seasonally adjusted
Regionally, towns in southwestern Connecticut had the lowest increases in unemployment rates. In
contrast, eastern Connecticut had the highest increases in unemployment rates.
Twenty-three towns experienced a decline in unemployment rates between July 2009 and July 2010.
Thomaston had the largest decrease, at -1.4%. Thomaston had previously experienced the second
largest increase in unemployment between July 2008 and July 2009.
Top Ten Change in Unemployment Rates

CT Towns - July 2009 to July 2010
Change in July 2010 July 2009
Town Unemployment Unemployment Unemployment
July 2009 to July 2010 Rate Rate
Hampton 2.7 11.1 8.4
Thompson 2.5 11.6 9.1
Bozrah 2.5 8.9 6.4
Hartford 2.2 16.9 14.7
Woodstock 2.0 8.4 6.4
Sprague 1.9 10.8 8.9
Canterbury 1.8 9.3 7.5
Ansonia 1.8 11.7 9.9
Preston 1.8 8.7 6.9
Montville 1.7 9.0 7.3
Table IV-2 Source: CT Dept. of Labor, Local Area Unemployment

Statistics (LAUS), not seasonally adjusted
Long-Term Unemployment
Long-term unemployment includes individuals who have been categorized as unemployed for more than
twenty-six weeks (about six months). It excludes those who did not actively look for work in the prior four
months. It is reported as a percentage/share of total unemployment.
Yearly Long-Term Unemployment Shares

40%
2002 to 2009
CT Long-Term Unemployment as Percentage of Total Unemployed
National Long-Term Unemployment as Percentage of Total Unemployment
New England Long-Term Unemployment as Percentage of Total Unemployment
30%
20%
10%
2002 2003 2004 2005 2006 2007 2008 2009
Figure IV-3 Source: Economic Policy Institute (EPI) analysis of Current Population Survey (CPS)
Since 2002, the percentage of long-term unemployed workers in Connecticut has been higher than both
national and regional shares. (Figure IV-3, above.) In 2009, the long-term unemployed population in
Connecticut accounted for over one-third (37%) of all individuals classified as unemployed. For New
England, 33% of the unemployed population was considered long-term unemployed. Nationwide, the share
was 32%. Connecticut tied with Rhode Island for the highest share of long-term unemployed in New
England, which also exceeded the 34% share in New York, in 2009.
Long-term unemployment is more illustrative of Long-Term Unemployment Shares

worker hardship than the standard unemployment 2002 2007 2009
rate alone. Short-term periods of joblessness are United States 18.3% 17.6% 31.5%
easier to endure as they may be covered by New England 19.1% 18.2% 32.7%
unemployment insurance that can soften the impact Connecticut 20.7% 20.3% 36.7%
of lost wages and benefits. Significant increases in Maine 13.6% 14.2% 28.3%
long-term unemployment rates since 2002 (Table Massachusetts 21.6% 19.5% 31.2%
IV-3) illustrate the magnitude of the current
New Hampshire 14.2% 11.5% 32.2%
economic downturn.
New York 24.6% 22.4% 34.0%
Rhode Island 14.6% 17.1% 36.7%
Vermont na 16.2% 26.0%
Table IV-3
Source: Economic Policy Institute (EPI)
analysis of Current Population Survey (CPS)

Underemployment
The definition of underemployment expands beyond the unemployed to include some part-time workers
and people who have stopped looking for work. People who are working part-time, but want full-time
work, are considered underemployed. Discouraged job seekers who are jobless are also included if they
have stopped looking for work, as long as they did actively look for a job in the previous twelve months.
Consequently, rates for the underemployed will exceed unemployment rates. People who take jobs for
which they are over-qualified are not considered underemployed.
Yearly Underemployment Rates

18% 2002 to 2009
16%
CT Underemployment Rate
New England Underemployment Rate
14%
National Underemployment Rate
12%
10%
8%
6%
4%
2002 2003 2004 2005 2006 2007 2008 2009
Annual underemployment rates in Connecticut have been below national rates since 2002. (Figure IV-4,
above.) Underemployment rates in Connecticut have been higher than regional rates for New England for
five years of the eight years of available data, from 2002 through 2009. In 2009, Connecticut had an
underemployment rate of 14%, compared to 15% for New England, 14% for New York, and 16%
nationwide. Underemployment rates have increased dramatically since 2002 (Table IV-4) because of
worsening economic conditions that began in mid-2007.
The underemployment rate is a more comprehensive

Underemployment Rates
measure than the unemployment rate to show prevailing
conditions in the labor market. The underemployed are 2002 2007 2009
workers who, by definition, want to do more to support United States 9.6% 8.3% 16.2%
themselves and their families. Their inability to do so not New England 8.1% 7.7% 14.5%
only leaves them less well off, but also represents an Connecticut 7.5% 8.2% 14.4%
important underutilization of labor in the Connecticut Maine 8.8% 8.9% 14.7%
economy. Massachusetts 8.5% 7.3% 14.5%
New Hampshire 7.4% 6.5% 12.5%
New York 9.8% 8.1% 14.3%
Rhode Island 8.4% 8.3% 19.2%
Vermont 7.1% 7.0% 11.8%
Table IV-4 Source: Economic Policy Institute
(EPI) analysis of Current Population Survey (CPS)

Unemployment, Long-Term Unemployment, and Underemployment by Demographic Category
Age. The older population (55 yrs and Differences by Age Group
over) has the lowest unemployment rate,
but when they lose their jobs they take
50% 2009 45%
longer than younger workers to be 55 yrs and older 40%
rehired. In contrast, younger workers 25-54 yrs
(age 16 to 24) have a higher 16-24 yrs
unemployment rate than older workers,
26%
but are less likely to be among the long- 24%
25%
term unemployed. The rate of
underemployment among the youngest 15%
workers is more than double the 11%
13%
underemployment rate for the oldest 7%
6%
workers. In 2009, Connecticut had the
highest share of long-term
0%
unemployment, at 45%, for workers age Unemployment Rate Underemployment Rate Percentage of unemployed
55 and older in New England. (Figure that are long-term
IV-5, right.) Figure IV-5 Source: Economic Policy Institute (EPI) analysis of
Current Population Survey (CPS)
Race/Ethnicity. African Americans had the highest rates of unemployment, long-term unemployment,
and underemployment in 2009. Unemployment among African Americans is more than double the rate for
Whites. Hispanics are the least likely to be among the long-term unemployed, however, their
unemployment rate is nearly double the rate of Whites. Underemployment rates for Hispanics and African
Americans are similar, and more than double the rate for Whites. In 2009, Connecticut had the highest
share of long-term unemployment, at 37%, for Whites in New England. (Figure IV-6, below.)
Differences by Race/Ethnicity
50% 2009
45%
White
Hispanic 37%
African-American
26%
25% 26%
25%
16%
13% 12%
7%
0%
Unemployment Rate Underemployment Rate Percentage of unemployed that
are long-term

Education. Educational attainment and employment are highly interrelated. As educational attainment
increases, the rates of unemployment and underemployment decrease. Individuals who did not complete
high school are nearly four times as likely to be unemployed, or underemployed, compared to someone with
a college degree. In contrast, individuals with a college degree are the most likely to remain unemployed the
longest. (Figure IV-7, below.)
Differences by Educational Attainment

50%
2009
41%
Bachelor's or Higher
Some College 38% 37%
High School
Less than High School 31%
29%
25%
19% 20%
14%
11%
8% 8%
4%
0%
Unemployment Rate Underemployment Rate Percentage of unemployed that are
long-term

V. Wages 1
Note: To ease interpretation, each of the points along the wage distribution examined in this report is
given a descriptive label: very low wage workers are those at the 10th percentile, low wage workers are
those at the 20th percentile, median wage workers are those at the 50th percentile, high wage workers
are those at the 80th percentile, and very high wage workers are those at the 90th percentile. By
definition, 10% of Connecticut workers earn wages below the very-low wage level, while 10% of
Connecticut workers earn wages above the very high wage level.
Hourly Wage Trends Overall
Wages in Connecticut over the past decade have continued a pattern of divergence that has occurred since
at least the late 1970s and has accelerated since the early 1990s. Wages among the top earners in
Connecticut since 2000 have increased by some of the highest margins in the country while wages among
those who earn the least have had net decline. Since 2006, wage estimates trended upward for all wage
categories, with the largest percent increases occuring among the highest income categories and the lowest
percent increases occuring among the lowest.
Connecticut wages by percentile, 2000 - 2009

Real Hourly Wage
$50.00
$45.00
$40.00
$35.00
$30.00
$25.00
$20.00
$15.00
$10.00
$5.00
$0.00
= Wage high-point since 2000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Very High (90th) $40.47 $40.88 $41.36 $43.85 $42.52 $42.24 $41.11 $42.26 $43.95 $45.70
High (80th) $30.56 $31.68 $32.16 $33.96 $32.91 $32.81 $31.82 $32.48 $33.46 $35.08
Median (50th) $18.66 $19.53 $19.41 $19.87 $19.68 $18.96 $18.88 $19.15 $19.65 $20.37
Low (20th) $11.31 $11.88 $11.71 $11.53 $11.30 $11.10 $10.78 $10.98 $11.00 $11.10
Very Low (10th) $8.85 $9.27 $9.31 $9.24 $9.14 $9.02 $8.64 $8.89 $8.83 $8.95
FIGURE V-1 Source: CT Voices and Economic Policy Institute analysis of CPS data.
1Hourly wages in this report are derived from real (inflation-adjusted) wages reported by the United States Census Bureau’s
Current Population Survey Outgoing Rotation Group (CPS-ORG). Average yearly earnings are from the Quarterly Census of
Employed Workers (QCEW). These measures include compensation such as wages, salary, commissions, tip, and cash bonuses
before deductions for taxes, bonds, pensions, and union dues. Hourly wages from the CPS-ORG are estimates from a sample,
and are subject to sampling error from year to year.
Connecticut Voices for Children V-1
Figure V-1, above, shows estimated real (inflation-adjusted) wages by decile between 2000 and 2009. In
2009, very high wages in Connecticut, at $45.70 per hour, were 5.1 times higher than very low wages of
$8.95, the fourth highest gap in the country behind New Jersey, Virginia, and California. The median wage
in 2009, at $20.37, was 2.3 times higher than very low wages, equaling the second highest gap in the country
behind New Jersey. Very high, high, and median wages all rose to new Connecticut records, both for the
decade and since the CPS began tracking wages in 1979. Low and very low wages are still below their
maximum wages on the decade in 2001 and 2002, respectively. The historical wage peak (since 1979) for
very low wages was in 1989, when the wage was $9.37.
Hourly wage rates have increased in real terms for the majority of the wage spectrum since the beginning of
the recession in Connecticut, but well-documented cutbacks in hours within the public and private sector
mean that many families can earn less in spite of seeing increases in their hourly rates. 2 Public sector
workers in Connecticut have faced similar reductions, with state workers accepting six unpaid furlough days
over FY10 and FY11 in labor concessions.
Wages in 2009 continue a long-term trend of wage divergence and low-wage stagnation. Higher
wage estimates increased by greater proportions than lower wage estimates from 2008 to 2009, following a
trend that has occurred since at least 1989. Figure V-2, below, shows that wages for very low wage workers
have made little progress over the past thirty years while very high wage workers have seen over a 50%
increase.
Since at least 1989, wage growth has diverged

among higher and lower wage levels
% growth since 1979
60%
Very High Wage
(90th)
50%
Median Wage (50th)
40%
Very Low Wage
30% (10th)
20%
10%
0%
-10%
-20%
1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
Figure V-2 Source: CT Voices and Economic Policy Institute analysis of CPS data.
Wages at the lowest levels have lost ground over the past twenty years. Historical wage data shows
that real wage estimates at the bottom of the wage distribution were lower in 2009 than in 1989, contrasted
2See Steven Greenhouse, “More Workers Face Pay Cuts, not Furloughs.” The New York Times. A1, August 4th, 2010; Christina
McFarland, “State of America’s Cities Survey on Jobs and the Economy.” National League of Cities Center for Research and
Innovation. May 2010.
with a large appreciation of real wages at higher wage levels. Very low wages grew over the late 1990s, but
did not surpass previous highs before entering a downward trend in the early 2000s. Figure
V-3, below, shows parallel bar graphs that display the change in real wages since the last recession in 2001
and the change in real wages since the start of the previous recession in 1989. Both the short-term and the
long-term time frames show real wage growth among workers at the top of the wage scale, and real wage
depreciation or stagnation occurring for workers at the bottom. Indeed, whether short-term or long-term,
the two highest-earning wage groups received the largest wage increases as a proportion of their income,
while the two lowest-earning wage groups suffered the largest real wage decreases as a proportion of their income.
Real wages decline for Connecticut's low wage workers but rise
steeply for its high wage workers (long-term vs. short-term)
% Change
40%
35%
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
Very
Very Low Low Median High
30th 40th 60th 70th High
Wage Wage Wage Wage
percentile percentile percentile percentile Wage
(10th) (20th) (50th) (80th)
(90th)
Changes since 2001 -3.5% -6.6% -1.3% 1.0% 4.3% 7.7% 10.2% 10.7% 11.8%
Changes since 1989 -4.5% -4.9% 3.9% 9.9% 15.7% 20.9% 24.8% 29.0% 36.4%
Compared to other states, Connecticut’s lower wages performed poorly since 1989 while its higher
wages performed well. For workers in the 10th through the 30th percentiles, Connecticut ranks in the
bottom five states in wage growth since 1989. Over this time period, Connecticut’s very low wage workers
(10th percentile) experienced the most severe wage deterioration in the country. By contrast, Connecticut's
highest-paid workers have experienced close to the largest growth in the country. Connecticut ranks 2nd
best among the states in wage growth for high wage workers (80th percentile) and very high wage workers
(90th percentile).
Figure V-4, below, shows the ratio of very high wages (90th percentile) to very low wages (10th percentile)
in both Connecticut and the United States. In 2009, very high wages in Connecticut were 5.1 times its very
low wages. In Connecticut, this measure of wage inequality has risen steeply since 1989, when very high
wages were 3.6 times its very low wages, and outpaced the growth of wage inequality of all other states.
But wage inequality in Connecticut is not only a phenomenon that occurs at the extremes. For instance, the
gap between the 70th and 30th percentile wage in Connecticut—the 70th percentile wage is over twice as high
as the 30th—is the third largest in the country. This suggests that wage inequality in Connecticut is not

driven by a handful of billionaires, as some might expect, but instead reflects wage disparities that exist more
broadly throughout the population.
Because wages make up more than three fourths of total family income, the sustained and rapid divergence
in wages in Connecticut over this time contributes heavily to Connecticut’s onerous distinction in widening
income inequality. 3 The difference between top and bottom incomes, which includes both earned (including
wages) and unearned income (like capital gains and interest), grew more quickly in Connecticut over the past
few decades than in any other state. 4
Growing wage inequality in Connecticut

outpaces growth nationally
Ratio of 90th percentile wage to 10th percentile wage
5.3
5.1
4.9
4.7
4.5
4.3
4.1
3.9
Connecticut
3.7
United States
3.5
3.3
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009 Year
Figure V-5, below, shows that quick growth in wage inequality compared to other states results in part from
a decline (compared to national wages) in lower wages in Connecticut and a steep comparative increase of
higher wages in Connecticut. This figure shows that, after a period of equal growth, low wages in
Connecticut have been losing ground since 1989 while high wage growth continues to out-strip the national
high wage growth rate.
Note: Measuring inequality in wages markedly underestimates family income inequality in Connecticut by
failing to take into account the significant non-wage (e.g., dividend, interest, and capital gains) income of
Connecticut’s highest income families. Higher-wage workers tend to have much larger shares of non-wage
income than lower-wage workers. Were unearned income included in income inequality measures, it would
3 Mishel L, Bernstein J, and Shierholz H. The State of Working America, 2008/2009. ILR Press, 2009.
4 Hero, Joachim. Connecticut Leads the Nation in Multiple Measures of Income Inequality: 2007. CT Voices for Children, 2009.
push the income gap even wider. 5 The true scope of wage inequality growth in Connecticut is also muted
because 10% of Connecticut’s workers earn more than the very high wage reported here. Aggregate wages
earned by the top 10% is a significant portion of total wages in the state, estimated at 46% in Connecticut 6 ,
and wages get precipitously higher as one approaches the 100th percentile.
High wage growth in Connecticut since 1990 outpaces

national growth while low wage growth lags
Diff. in wage growth since 1979 between CT and the US
35%
30%
25% 80th Percentile
20%
15% 50th Percentile

(Median)
10%
5% 20th Percentile
0%
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Annual wages
Records that cover over 96% of the civilian workforce show that real (inflation-adjusted) average (“mean”)
yearly earnings declined in Connecticut in both 2008 and 2009, totaling a 3.8% drop between 2007 and
2009. (Figure V-6, below.) This is in spite of data that show that average hourly earnings from wages and
salary in Connecticut increased in these years. Declining average wages can occur for a number of reasons,
including reduced hours worked, reduced salaries, or shifts in the composition of the workforce. Evidence
suggests that Connecticut’s decrease stems in part from a reduction in the average hours worked per week.
Between 2007 and 2008, average hours per week declined from 34.3 to 34 hours, in 2009 they dropped
further to 33, a 3% drop. 7
Average measures have several limitations that require observers to interpret with caution. The very term
“average” can be misleading since the average wage need not represent a wage level that is typical of
Connecticut residents. In lopsided states like Connecticut in particular, where a large portion of total wages
is concentrated among a small segment of the population, the average wage can be much higher than that of
the majority of residents. Additionally, since wages fall into a distribution ranging from very low to very high
5 Mishel L, Bernstein J, and Allegretto S. The State of Working America, 2006/2007. ILR Press, 2007. Table 1.20
6 Estimated by Connecticut Voices for Children using the CPS estimate for total earned income in Connecticut.
7 Bureau of Labor Statistics, Current Employment Survey

wages, changes in the average yearly wage do not allow us to infer changes to yearly earnings of any
particular segment of that distribution. 8
Real average yearly earnings in Connecticut

declined in 2008 and 2009
Average annual earnings per worker
$61,000
$60,000
$59,000
$58,000
$57,000
$56,000
$55,000
$54,000
$53,000
2001 2002 2003 2004 2005 2006 2007 2008 2009
FIGURE V-6 Source: Quarterly census of employed workers, U.S. Bureau of Labor Statistics.
Wages and Demographics
This section analyzes wages along the lines of gender, race, and education. Wide variation exists among the
median hourly wages of these demographic categories. Some of this variation follows along lines like race
and gender, which is indicative of societal ills that persist in Connecticut and the rest of the country. Other
wage variation follows along the lines of valuable skills and institutions, like education and union status,
which demonstrates opportunities to promote broad-based wage growth if widespread access to those skills
and institutions exists.
Connecticut’s gender gap is greater than in most other states. In 2009, the estimated median hourly
wage for women, at $17.93, was 76% of the median wage for men, at $23.57. The gap between men and
women has narrowed over the past several decades. However, since the mid-nineties the progression
towards equal pay between men and women in Connecticut appears to have slowed or stopped (figure V-7).
Only five other states in the country ranked lower than Connecticut in 2009 on gender parity in wages. The
median female wage in Maryland, the state where the gap was found to be the smallest in 2009, was over
90% the median wage of men. Connecticut's 76% is below the national average of 82%.
8For example, if the annual earnings for the bottom 90 percent of the wage distribution decreased, but by a lower cumulative
amount than the amount that annual wages increased for the top 10 percent, average annual wages would still increase.
Connecticut’s wider than average gender gap may result in small part from its demographic make-up.
National data show that the gender gap is strongly tied to age, with women between 16 and 24 earning 93%
of what men in the same age group earn compared to women between 45 and 54 who earned just 74% of
similarly aged men. 9 Census data show that Connecticut’s female labor force has a slightly higher proportion
of women over 45 than the proportion in the rest of the country (and fewer women less than 45). 10
However, age differences alone are insufficient to explain the magnitude of the difference between
Connecticut and the rest of the country.
Women's wages in Connecticut have made slow progress,

but may have stalled
Women's wages as a % of men's
120%
110%
Equal Wage
100%
90%
80%
70%
60%
50%
40%
30%
20%
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Racial disparities are significantly wider in Connecticut than in the U.S. Figure V-8, below, shows
median minority wage as a proportion of median white wage in Connecticut, New England, and the United
States. In 2009, the median African American wage in Connecticut was 62% that of whites, while the
median Hispanic wage was 60% that of whites. The disparity between median white and African American
wages in the United States is over 15 percentage points smaller than that in Connecticut, a staggering
difference. Connecticut’s wage disparity between white and Hispanic workers is 10 percentage points wider
than the national disparity.
Racial disparities in wage are readily apparent across the country, but are more pronounced in Connecticut,
where the median hourly wage for white workers is $22.37 compared to $13.97 for African American
workers and $13.51 for Hispanic workers. (Figure V-9, below.) Connecticut’s wage disparities stem from
high median wages among whites relative to regional and national numbers. The median wage among
African Americans and Hispanics in Connecticut is roughly equal to regional and national medians, despite
the high cost of living in the state.
9Bureau of Labor Statistics, Highlights of Women’s Earnings in 2009. Report 1025. U.S. Department of Labor. June 2010.
Based upon Connecticut Voices Analysis of the U.S. Census’ American Community Survey, 2008. Table C23001. Sex by Age by
10
Employment States for the Population 16 years and over.

Racial disparities in wages are wider in Connecticut than in
New England and the United States, 2009
% of white median wage
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
African American Hispanic
Connecticut 62% 60%
New England 70% 69%
United States 78% 70%
Whites in Connecticut earn significantly more than

whites in New England and the United States;
minorities earn roughly the same, 2009
Median Hourly Wage
$25.00
$20.00
$15.00
$10.00
$5.00
$0.00
White African American Hispanic
Connecticut $22.37 $13.97 $13.51
New England $19.81 $13.90 $13.71
United States $17.49 $13.57 $12.21

A college education has a significant impact on wages at all levels of earnings. A bachelor's degree or
higher has a significant effect on wages earned across the entire wage distribution. According to Figure V-
10, below, workers with a bachelor's degree or higher who are earning low wages (20th percentile) earned
around $18.39 an hour, which was 85% higher than workers at the same wage percentile who had not
completed a four-year degree but had graduated from high school. Workers with a bachelor's degree or
higher who were earning high wages (80th percentile) earned $46.57 an hour, which was 87% higher than
workers at the same percentile who had not completed a four-year degree but had graduated from high
school. The 80th percentile wage in 2009 among workers with only a high school diploma was lower than
the 40th percentile wage among college graduates.
Education pays: workers with bachelor's degrees or higher

earn far more than workers without degrees at all income levels
Hourly wage
$50.00
$45.00
$40.00
$35.00
$30.00
$25.00
$20.00
$15.00
Bachelor's or higher
$10.00
Some college
$5.00
High school
$0.00
20th 30th 40th 50th 60th 70th 80th
Percentile
A college education in Connecticut is more valuable than ever before. Data from 1979 show that the
difference in median hourly wages among Connecticut workers with varying levels of education has been
growing. Figure V-11, below, shows that the real median wage of Connecticut’s highest educated has grown
from $20 an hour to over $30 an hour. However, for its least educated, real hourly wages have fallen from
slightly below $14 to about $10 an hour. Workers with only a high school education and workers with
“some” college have made little progress in thirty years, remaining at close to $15 dollars an hour.
The increasing median income of people with a bachelor’s degree or higher does not appear to be caused by
an increase in graduate-level degrees. Census data show that the composition of the highest educational
bracket in Connecticut did not change much between 1990 and 2000. In 1990, 40% of the highest
education category held a master's degree or higher, and in 2000 that percentage rose only slightly to 42%.
Barring other possible explanations, it appears that the value of a college education in Connecticut has
steadily risen since 1979, while the cost of not attaining a high school degree also has increased.

Education has become increasingly valuable since 1979
Real Hourly Wage
$35.00
$30.00
Bachelor's or
$25.00
higher
$20.00 Some college
$15.00
High school
$10.00
Less than high
school
$5.00
$0.00
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Wage Inadequacy
Some Connecticut residents who work in full-time, year-round jobs earn wages that leave them below the
Federal Poverty Level (FPL) ($22,017/ year for a family of four in 2008 11 ). Between 2006 and 2008, 6% of
Connecticut residents in poverty worked full-time, year round and 42% worked either part-time or part of
the year. But in Connecticut, where the cost of living is among the highest in the country, measurements of
wage inadequacy based upon national standards largely underestimate the scope and impact of inadequate
wages on state residents.
Adjusting for cost of living, Connecticut’s lower wage workers are paid among the lowest in the
country. Wages in Connecticut do not go as far toward meeting basic needs as in other states. Although
Connecticut workers at all wage percentiles earn more than workers in most other states at comparable
percentiles, Connecticut residents also must pay more for basic essentials. In the last quarter of 2009,
Connecticut was listed as having the third highest cost of living in the contiguous United States. 12 The same
index found that, in the contiguous United States, Connecticut was the most expensive state to buy
groceries, the fifth most expensive state in housing expenses, the second most expensive state in the price of
utilities, and the sixth most expensive state in health care costs.
11 The Federal Poverty Threshold, by comparison, varies both by size and composition of a family. The 2009 Federal Poverty
Threshold for a four-person family composed of two parents and two related children is $21,756.
12 Missouri Economic Research and Information Center. http://www.missourieconomy.org/indicators/cost_of_living/index.stm

A cost-of-living adjustment to Connecticut Connecticut's State Ranking
wages dramatically changes how they
compare to the cost-of-living adjusted wages 10th
50th
90th
of other states. Table V-1, to the right, percentile percentile
percentile
(Low (High
shows how the median wage, which in Wages)
(Median)
Wages)
Connecticut is the highest in the country,
falls to the 18th highest median wage in the Unadjusted for
contiguous United States when adjusted for Cost of Living
2rd 1st 3rd
the cost of living in each state. Connecticut
workers earning very low wages (10th Adjusted for
43rd 18th 11th
percentile) fare much worse, with their cost- Cost of Living
of-living adjusted wages ranking 43rd out of
the contiguous states (or 6th lowest). Very Table V-1 Source: Connecticut Voices for Children and EPI
analysis of Current Population Survey Data adjusted using ACCRA
high wages in Connecticut fell in rank from cost of living index.
3rd highest to 11th highest when adjusting for
cost of living expenses, although the exclusion of unearned income (capital gains, dividends, interest, rents,
etc.) greatly complicates the interpretation of wage adequacy at the top of the wage spectrum.
Many Connecticut residents pay more than

30% of their income for housing
FIGURE V-12 Source: CT Voices analysis of ACS data
High housing costs cut deeply into household budgets. Figure V-12, above, shows that half (50%) of
Connecticut's renters spend more than 30% of their income on housing costs and 37% of homeowners
spend more than 30% of their income on housing costs. According to the Department of Housing and
Urban Development, people who spend more than 30% of their income on housing costs are cost-
burdened and may have difficulty affording other necessities. The National Low-Income Housing Coalition
found that in 2009 a family in Connecticut would have to work full-time, full-year at $21.60 or greater an
hour to afford the Fair Market Rent of a two-bedroom apartment. 13 $21.60 is about 6% higher than the
median wage in Connecticut in 2009.
13Out of Reach 2009. National Low Income Housing Coalition. Last viewed, 08/11/10.
http://www.nlihc.org/oor/oor2009/data.cfm?getstate=on&state=CT
Developing a better national standard of income inadequacy. The enormous drop in state ranking that
occurs when Connecticut’s lowest wages are adjusted for the high cost of living here reveals a serious
inadequacy in the existing national poverty standard. While the cost of living expenses can vary widely
across regions, the threshold by which households and families are determined to live in poverty is the same
across the contiguous United States. In Connecticut, where costs are among the highest in the country, the
federal poverty threshold is likely to underestimate the number of people who have less income than they
need to meet their essential needs.
Today’s federal poverty threshold is also simplistic and sorely out-of-date, still using data from the 1950s
and 1960s to determine a threshold that is starkly out of line with current conditions. For example, the
federal poverty threshold is calculated by taking the price of emergency food supplies (using 1950s data) and
multiplying it by three, because in the 1960s food constituted about one-third of a family budget. Today,
food constitutes less than a sixth of a typical family budget. By relying only upon an outdated measure of
the cost of food to determine poverty, the current poverty threshold also ignores the current cost of
necessities as basic as housing and health care.
Legislators and advocates have been trying for years to propose modern alternatives to the existing federal
poverty threshold, most recently through the Measuring American Poverty Act. 14 On the state level, several
states have already proposed newer, more accurate measures of income adequacy. In 1999, Connecticut
developed its own Self-Sufficiency Standard, which was most recently updated in 2005. 15 The Standard
presents self-sufficiency wages for twelve regions in the state, accounting for family composition and
regional differences in the cost of basic needs.
14 Measuring American Poverty Act of 2009, S. 1625, 111th Cong., 1st Sess. (2009); Measuring American Poverty Act of 2009, H.R.
2909, 111th Cong., 1st Sess. (2009).

15 Diana Pearce, The Real Cost of Living in 2005: The Self-Sufficiency Standard for Connecticut (2005).
http://www.cga.ct.gov/pcsw/Publication%20PDFs/2005/FESS%20Executive%20Summary.pdf.
The Economic Policy Institute produces similar numbers using their basic family budget calculator. Updated basic family budget data
were released September 1, 2005 for over 400 communities nationwide. See
http://www.epi.org/content.cfm/datazone_fambud_budget.
VI. Conclusion
In spite of recent economic progress at state and national levels, uncertainty about the future and persistent
harmful economic trends show that state federal government solutions are needed now just as ever. A
review of the latest data on the state’s labor force finds that:
• Unemployment in Connecticut, at 8.9%, remains high compared with historical rates, and the
proportion of the unemployed who have been unemployed long-term in Connecticut is the fourth
highest in the country, at 37%.
• Underemployment, which adds to the unemployed both part-time workers who want to work full-
time and workers who have become discouraged from looking for a job, was 14% in Connecticut
and the highest for the state since the measure was first collected in 1994.
• Only the Educational and Health Services sector saw substantial job growth since the beginning of
the recession. Employment in all other sectors is either unchanged since December 2007, or has
experienced decline.
• High and low wages in the state continue to diverge, with the states highest wages increasing most
rapidly and the state’s lowest wages declining over the past decade. Connecticut’s wage disparity is
also not only focused at the extremes. The gap between the 90th and 10th percentile wage is the
fourth widest in the nation. The gap between the 70th and 30th percentile wage is the third highest in
the nation.
• The number of jobs in the highest-paying occupations in Connecticut has grown in recent years
while middle-wage occupations have had the steepest job declines. In fact, between 2006 and 2009
only the highest-paying category of occupations (the top 20%) saw net job increases.
• The levels of racial and ethnic disparities in Connecticut both in employment measures as well as in
wages are much wider than disparities at the national level. Unemployment and underemployment
rates for minorities in Connecticut are around double or more of rates for whites. African
Americans in Connecticut earn, at the median, only 62 cents on the dollar of the median white
wage.
Among the daily readings of the latest economic tea leaves, it is easy to forget the question that is most
important: how are economic changes affecting people? As the challenges for people who cannot find work
grow, basic security in the form of health insurance, food assistance, child care, job training, and job search
supports become ever more important. Government also has the power and responsibility to promote
economic vibrancy, while ensuring that workers who are employed are well treated and fairly compensated.
Government, whose function is foremost one of public protection, must work to avoid economic crises,
prepare for them if they should occur, and come to the aid of its citizens when they do. There are many
things that Connecticut’s government can do to promote shared future economic prosperity and protect its
families from economic harm:
Avoid more state budget cuts that would undermine the economy and weaken supports for
working families and the unemployed. With huge budget deficits projected for the coming fiscal years,
the General Assembly will need to use every tool at its disposal—including revenue options—to return the
state to fiscal health while preserving state and local public services that are critical to the wellbeing of the
population and to our future economic success. The FY10 – FY11 state budget relied upon a combination
of budget cuts, one-time revenues (primarily federal stimulus funds and the Budget Reserve Fund), tax and
fee increases, and borrowing to close the projected state deficit in 2010 and 2011. It slashed $3.3 billion in
spending relative to the Governor’s estimate of the funds necessary to maintain current services, so that
Connecticut Voices for Children VI-1

spending cuts exceeded ongoing revenue increases by a factor of nearly three-to-one. 1 The Office of Fiscal
Analysis now estimates that this budget will add to the current services deficit of $3.4 billion in FY12 and
more than $3 billion in each of FY13 and FY14. The state’s structural deficit, which existed even before the
economic downturn, has been exacerbated by an overreliance on borrowing when revenue reforms would
have improved the state’s long-term fiscal health. At the same time, state government, through budget cuts,
is reducing its ability to fight the economic crisis at precisely the moment when it should be doing more.
The Center for Economic and Policy Research (CEPR) released a report 2 quantifying the harm that states
can do to their economies by pursuing broad budget cuts to close growing budget deficits. The detrimental
impact on Connecticut of closing budget deficits projected for the state in FY12 and beyond could prove
devastating—both by increasing unemployment as well as reducing the flow of capital in the economy—if
Connecticut chooses to address them with deep, broad-based cuts (rather than increased on-going revenues)
in these out-years. For example, Connecticut’s education and health job sector, heavily dependent on public
investment, is the largest job sector in the state, with the greatest amount of growth, even during the
recession. Severe cuts to state spending in this area could undermine an area of progress in the state
economy, and weaken one of Connecticut’s economic advantages – its well-educated workforce.
Connecticut’s response to the unprecedented fiscal challenges that lie ahead must balance the use of well-
designed revenue enhancements with targeted and strategic spending reductions to minimize the negative
impact upon residents and our economic future.
Establish a clear, prioritized economic development strategy for the state. In the last decade, the
state’s economic development efforts have been fragmented, lacking a cohesive strategy. The Department
of Economic and Community Development released an Economic Strategic Plan for the state in September
of 2009, but, while many of the ideas in the plan are excellent, the plan does not offer a coherent and
prioritized roadmap for long-term economic growth. In an era of limited state resources, the state must be
prepared to invest adequately and strategically in areas that utilize the state’s strengths and position the state
for long-term stability and prosperity. 3 Any development plan should focus on:
• Closing the achievement gap in Connecticut’s schools. Connecticut has the nation’s largest
achievement gap, which poses a significant threat to the future economic health of the state. This
threat is amplified by demographic projections that show that minorities will compose a rapidly
increasing proportion of Connecticut’s labor force. Closing Connecticut’s very wide achievement
gap would also have a direct impact on economic growth. According to a recent national study by
McKinsey and Co., a leading consulting firm, if the achievement gap between black and Hispanic
students and white students had been eliminated, US Gross Domestic Product (GDP) in 2008
would have been two to four percent higher. 4
1 We measured spending cuts relative to the current services baseline published in the Governor’s February 2009 budget
submission. We obtain comparable results when comparing final appropriated spending to the estimated expenditure baseline
released by the Office of Fiscal Analysis in February 2009. See OFFICE OF FISCAL ANALYSIS, BUDGET BOOK, APPENDIX: STATE
AGENCY APPROPRIATIONS (2009) (actual appropriations), available at
http://www.cga.ct.gov/OFA/Documents/OFABudget/2009/Book/Appendix.pdf; Governor's Budget, FY 2010-FY 2011
Biennium, Budget-in-Detail (2009) (current services estimates by agency), available at
http://www.ct.gov/governorrell/cwp/view.asp?a=1317&q=433328.
2 Matthew Sherman, Will Workers Survive State Budget Belt-Tightening? Center for Economic and Policy Research. Issue Brief,
December 2008.
3 For a more detailed discussion of a strategic economic development strategy for Connecticut, see Eric Mitzenmacher and
Rebecca Phillips, “From Options to Planning: A More Strategic Approach to Growing Connecticut’s Economy.” Connecticut
Voices for Children. April 2010.
4 McKinsey & Company, “The Economic Impact of the Achievement Gap in America’s Schools.” McKinsey & Company Social
Sector Office. April 2009.

http://www.mckinsey.com/App_Media/Images/Page_Images/Offices/SocialSector/PDF/achievement_gap_report.pdf
• Evaluating the success of state economic development initiatives (whether through grants, loans or
tax benefits) by measuring the number of “good” jobs created and the preparedness of our
workforce, not just increased productivity and creation of low-wage and/or temporary jobs.
Economic development resources that are not achieving these objectives should be re-deployed
toward increasing jobs that allow self-sufficiency and ensure a well-educated, healthy workforce.
• Developing opportunities for interstate collaboration, particularly in expanding transportation and
energy infrastructure.
• Supporting and encouraging small business by streamlining processes for local and state permitting,
site preparation, and infrastructure improvement, while promoting smart energy, green building, and
low-impact development as tools for achieving economic growth responsibly.
• Promoting good governance protections within state economic development agencies through
increased transparency and accountability of corporate tax credits and better coordination of
business incubation efforts.
Ramp up supports for the families of lower wage workers and workers who have lost their jobs. The
severity of the current recession has caused many economists to warn that national unemployment may
remain high through 2011 and beyond. The precipitous rise in the underemployed and long-term
unemployed in Connecticut underscores the need for supports that go beyond those designed specifically
for the unemployed. For example, Connecticut could help families retain health insurance coverage by
subsidizing COBRA coverage for unemployed and part-time workers, and taking advantage of federal
opportunities to expand the HUSKY health insurance program. If the state does not act to ensure that
residents who are unable to find work have access to basic needs such as health care, food, and energy
assistance, the impact will be felt throughout the entire state economy through reduced consumption and
higher emergency-room costs.
As average weekly earnings decline, the state must also do more to help lower-wage families make ends
meet. Restoring funds cut earlier in the decade for programs that reduce family expenses (e.g., child care
subsidies, housing subsidies, energy assistance), ensuring affordable health insurance for all who are
uninsured or underinsured, making the state tax code more equitable (e.g., providing income tax deductions
for dependent children, a refundable state earned income tax credit), expanding the supply of housing
(including rental housing) that is affordable for lower wage families and curbing predatory lending practices
all will reduce the economy’s adverse impacts on children living in families earning lower wages.
Expand our public investment in education and training. Direct investment in education and training
helps to raise the earning potential of Connecticut’s workers, improves Connecticut’s competitive standing
with other states, and has been shown to effectively create jobs in both the short- and long-term. A recent
economic analysis of direct investment in education (including early childhood, K-12 and higher education)
in Connecticut found that a million dollars of investment creates between 25 and 33 jobs (between 30,000
and 40,000 per job) for teachers, aides, custodians, nurses, professors, bus drivers, and others. 5 The
employment gains occur while at the same time improving the quality of the workforce and expanding
opportunity for Connecticut residents. Barriers to college can also be reduced by investing more to reduce
the state’s enlarging achievement gap, targeting interventions to curb the number of youth who drop out of
high school, increasing funding for college scholarships, and expanding financial support to our public
colleges and universities to limit tuition increases. Ensuring that Connecticut’s workforce remains one of the
most highly educated in the nation not only helps Connecticut families, but also keeps Connecticut
economically competitive.
5 Jeffery Thompson, “Prioritizing Approaches to Economic Development in New England: Skills, Infrastructure, and Tax
Incentives.” Political Economy Research Institute, University of Massachusetts, Amherst. August, 2010.

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EMBARGOED UNTIL

Friday, September 3, 2010

Joachim Hero, M.P.H.

Produced with the generous support

I. Introduction ...................................................................................................................... I-1

II. The Face of Working Connecticut

III. Payroll Employment

IV. Unemployment, Long-Term Unemployment, and Underemployment

VI. Conclusion ....................................................................................................................... VI-1

1 Gallup Daily. U.S. Economic Outlook. http://www.gallup.com/poll/110824/Gallup-Daily-US-Economic-Outlook.aspx Site

last accessed August 31st, 2010.

http://www.recovery.ct.gov/recovery/site/default.asp Site last accessed August 31st, 2010.

Connecticut Voices for Children I-1

And for many workers, labor market conditions in

Connecticut Voices for Children I-2

Connecticut Voices for Children II-1

Connecticut's labor force participation rate by gender,

Race and Ethnicity

Connecticut Voices for Children II-2

Connecticut Voices for Children II-3

Connecticut Voices for Children II-4

Percent of labor force with bachelor's degrees or higher

Connecticut Voices for Children II-5

Workers over 55 make up an increasing portion of the

Connecticut Voices for Children II-6

Since 1997, labor force participation rate increasing

Connecticut Voices for Children II-7

Total Payroll Employment 1

Employment in Connecticut: July 2000 to June 2010

Employment by Industry Sector

Most CT jobs have been lost in Professional and Business

Connecticut Voices for Children III-4

Long-term employment shifts in Connecticut, by sector

Connecticut Voices for Children III-5

Manufacturing job losses quickened over the recession

Connecticut Voices for Children III-6

Highest paying occupations gained jobs,

Figure III-8 Source: CT Voices Analysis of Occupational Employment Statistics Data.

Connecticut Voices for Children III-8

In July 2010, the monthly

slightly lower than its recession

looking for full-time employment.

Connecticut Voices for Children IV-1

Thirty-Year Unemployment Trends

6 Bureau of Labor Statistics http://stats.bls.gov/news.release/laus.nr0.htm

Top Ten Unemployment Rates

Table IV-1 Source: CT Dept. of Labor, Local Area

Connecticut Voices for Children IV-3

Top Ten Change in Unemployment Rates

Table IV-2 Source: CT Dept. of Labor, Local Area Unemployment

Yearly Long-Term Unemployment Shares

Long-term unemployment is more illustrative of Long-Term Unemployment Shares

Connecticut Voices for Children IV-5

Yearly Underemployment Rates

The underemployment rate is a more comprehensive

Connecticut Voices for Children IV-6

Connecticut Voices for Children IV-7

Differences by Educational Attainment

Connecticut Voices for Children IV-8

Hourly Wage Trends Overall

Connecticut wages by percentile, 2000 - 2009

Since at least 1989, wage growth has diverged

Connecticut Voices for Children V-3