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Area towns see unemployment rates double during pandemic

Area towns see unemployment rates double during pandemic

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In April, unemployment rates more than doubled in communities across greater Meriden, according to preliminary labor force data reported by the state Department of Labor, during what officials called a “rapid and unprecedented level of job loss” due to the COVID-19 pandemic.

State data showed the statewide unemployment rate had climbed to at least 8% in April, from the state’s previous rate of 3.6% the month prior. In Meriden, that rate was higher — 8.7% — as at least 2,637 workers out of a labor pool of 30,378 workers, were reported unemployed. Cheshire, where 836 out of 14,724 employment eligible individuals were reported unemployed, had an unemployment rate of at least 5.7%.

In Wallingford, at least 1,806 employment eligible residents out of 24,891, found themselves looking for work. The town's unemployment rate was reported at 7.3%. Meanwhile, in Southington, 1,700 individuals out of the town's reported labor force of 23,672, reportedly sought unemployment benefits, bringing that town's unemployment rate to 7.2%, according to DOL labor force data. 

However, state labor officials and other economists warned that those reported rates are “severely underestimated.”

Department of Labor officials attribute those underestimations to challenges that occurred during the data collection. Those challenges include a poor response rate and key questions in surveys being misinterpreted. 

“Specifically, a significant number of respondents who should have been classified as temporarily out of work and therefore unemployed were, instead classified as employed, but away from work (e.g. sick),” states the DOL’s May 21 Labor Situation report. 

DOL’s Office of Research estimates the statewide unemployment rate may have risen to around 17.5% during the period from mid-March to mid-April. 

“This estimate was made using Connecticut residential unemployment insurance claims and adding similar factor for the unemployed self-employed,” the Labor Situation report stated. 

Labor officials estimated that Connecticut during that time frame saw a “historic” loss of 266,300 non-farm jobs in the state.

In a statement included in the Labor Situation report, Andy Condon, director of DOL’s Office of Research, described the level of job loss in April as “rapid and unprecedented.”

“All industries saw significant declines, but the hardest hit included leisure & hospitality, retail trade, and education & health services,” Condon said. “What remains to be seen is how many of these jobs were suspended and will return when public safety permits and how many were permanently lost.”

Daunting path to recovery

Preliminary data still shows significant month-to-month job losses in the region. 

Meriden's unemployment rate in March was around 4.4%, according to state data, until it ballooned 8.7%.

Similarly, in Wallingford, 3.1% of employment-eligible residents were unemployed. In Southington and Cheshire, 3.1% and 2.2% of residents respectively were unemployed, according to DOL data.

Fred V. Carstensen, director of the Connecticut Center for Economic Analysis at the University of Connecticut, said actual statewide unemployment is ”likely north of 20%, probably significantly higher.” 

Carstensen described a daunting path to economic recovery in Connecticut because it is “critically, fundamentally dependent on reconnecting with that data-driven, digitally dependent modern economy.  Absent that, the path to recovery will be significantly more challenging because Connecticut had become significantly more dependent on the low-skill, low-wage sectors that will also be the slowest to recovery.”

State Rep. Liz Linehan, a Democrat whose district includes Cheshire, Southington and Wallingford, said the bulk of her work addressing constituent concerns over the past few months was in helping them navigate the state unemployment claim system. 

“Unemployment is high in the area,” Linehan said. In addition, those seeking benefits have waited extended periods of time to receive unemployment compensation, she said. 

One issue, Linehan cautioned about, is that state reported data doesn't appear to distinguish between employees who are temporarily furloughed from work and those who are experiencing long-term unemployment. 

Linehan said based on what she is hearing from constituents, retail employees, small business owners and the self-employed appear to have been most impacted by the pandemic-battered economy. 

Connecticut is currently in the first phase of Gov. Ned Lamont's multi-phase reopen plan. 

That plan allowed hair salons to reopen Monday. Restaurants had already reopened for outdoor dining. Retail businesses considered non-essential also reopened last month for in-person commerce, as did offices, outdoor recreation areas, museums and zoos. The next phase, which will allow other businesses — gyms, movie theaters, bowling alleys, social clubs, pools and outdoor amusement parks — to reopen, is tentatively scheduled to be rolled out on June 20.