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Saturday, May 30 Business

Connecticut shed 266K jobs in April

Connecticut’s economy shed about 266,000 jobs in April amid the coronavirus crisis, a historic single-month toll that cost the state more than twice the number of salaried and wage positions that it lost in the Great Recession.

Reflecting an unprecedented shutdown of the state’s economy since its first confirmed COVID-19 case in early March, every major sector’s employment contracted, according to data released Thursday by the state Department of Labor. Several sectors lost more than 20,000 positions, with each of them alone breaking Connecticut’s monthly record for job losses.

Connecticut’s unemployment rate for resident workers and self-employed professionals spiked more than four points to 7.9 percent. But the level “appears severely underestimated” due to data-collection problems, including misclassification of some workers’ employment status, according to labor officials. They estimate the actual rate is closer to about 17.5 percent, which approaches Great Depression-era levels.

“These numbers are both devastating and unsurprising, given the number of businesses shut down. And with businesses that have been allowed to open, many have no business or volume, so they’ve been letting people go,” said Joe Brennan, CEO and president of the Connecticut Business and Industry Association. “The main thing is just how quickly we can get them back to work.”

Leisure and hospitality ranked as the hardest-hit sector, losing nearly 73,000 salaried and waged jobs. Next came trade, transportation and utilities, which saw employment plunge by about 50,000. Health and education lost about 45,000 positions. Professional and business services’ ranks dropped by about 26,000, followed by plunges of about 24,000 in “other services,” around 20,000 in government, approximately 13,000 in manufacturing and nearly 11,000 in construction and mining.

Financial activities and information industries sustained lighter blows: They, respectively, dropped 2,600 and 1,300 positions.

“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,” Andy Condon, director of the labor department’s Office of Research, said in a statement.

In another blow, the labor department announced Thursday that it had revised its originally calculated March jobs loss from 7,600 to about 22,000.

Previous downturns paled in comparison. The state dropped about 119,000 jobs during its 2008-2010 recession. In the worst month in that span, it lost about 17,000 jobs, in April 2009.

“It took 10 years to replace 99,000 of those jobs,” Kurt Westby, the state’s labor commissioner, said Thursday in a phone press conference. “Just in April 2020 alone, we lost double that. We’re talking about job losses of epic proportions.”

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The damage also far exceeds that of the 1989-1992 downturn when Connecticut lost about 150,000 positions, Don Klepper-Smith, chief economist and director of research for DataCore Partners LLC, noted in a report Thursday.

“Barring an immediate cure or vaccine for the coronavirus, this one-month job decline for April implies not only a harsh new economic landscape for Connecticut, but one that is apt to leave scars on the local economy and its residents for months and years to come in the same way that consumer behaviors were abruptly altered back in the 1930s,” Klepper-Smith said.

Help for displaced workers

Since March 13, the labor department has received more than 544,000 unemployment insurance applications — surpassing the total that it would typically receive in a four-year period.

It was initially overwhelmed by the volume, with many applicants waiting six weeks to receive their benefits. But staffing increases and technological upgrades have helped to speed up the processing of regular claims to an average of about one to two weeks, according to Westby.

As of Thursday, the department had processed about 507,000 claims - although not all of them have been paid out.

Since the pandemic began, DOL has paid out about $1.58 billion in benefits. About $1 billion of that total was distributed through federal Pandemic Unemployment Compensation program, which adds $600 in federal stimulus funds to every weekly state benefit payment.

Another $640 million was allotted for regular unemployment benefits and Pandemic Unemployment Assistance. The latter program supports self-employed and gig workers and independent contractors.

“We haven’t ever increased such a massive increase in claims and calls in the history of the DOL in such a short period of time,” Westby said.

While the labor department has sped up its response time, its processing was severely disrupted by IT problems on Tuesday and Wednesday.

“The majority of our staff, even those processing claims, are teleworking because of the pandemic. Those staff could not access our servers here within the agency,” Dante Bartolomeo, the state’s deputy labor commissioner,” said in the press conference. “So even though on Wednesday we were able to resume functions, we were at very low capacities for our staff for most of that day as well.”

The technical issues resulted in no data loss, according to Bartolomeo.

pschott@stamfordadvocate.com; twitter: @paulschott

Paul Schott|Staff reporter

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