City’s economy stays sluggish



After picking up slightly in recent weeks, the New Haven economy remains sluggish and continues to shed jobs, the Connecticut Department of Labor reported last week.

While the city of New Haven’s unemployment rate dropped to 7 percent in August — down from 7.5 percent in July — the city actually lost over 600 jobs during the month. The city’s jobless rate also remains higher than the statewide and national averages, although New Haven Mayor John DeStefano Jr. said the city’s economy is reflective of the nation at large.

“We’re holding our own, it’s just that at the national level things are so slow,” DeStefano said. “There is not a New Haven-only economy. It is integrally related to the region.”

Although the greater New Haven area — with an unemployment rate of 5 percent — is performing in line with the rest of the state, New Haven, like other major cities in Connecticut, is doing comparatively worse than its outlying suburbs. Bridgeport and Hartford, for example, have significantly weaker labor markets than New Haven, with unemployment rates of 9.1 and 10.2 percent, respectively. In two comparable New England cities, Providence, R.I. and Cambridge, Mass., unemployment stood at 7.1 percent and 3.9 percent, respectively.

The national “jobless recovery” — characterized by modest economic growth but few new jobs — has come to the Elm City as well, even as some of New Haven’s major industries are doing relatively well. Joe Slepski, a research analyst with the Connecticut Department of Labor, said the health care and education sectors — both major employers in New Haven — continue to retain and even hire new workers.

Slepski said growth in the New Haven area has actually been stronger than the rest of the state, but he said a key turning point may come this winter as retail stores hire more workers for the holiday season. Slepski also said Connecticut has not entirely recovered from the impact of the Sept. 11, 2001, attacks on the state’s economy, especially the financial services industry.

“We’re charting into an unknown territory in that respect,” Slepski said. “After [Sept. 11], we really don’t know — when jobs will come back.”

Greater New Haven Chamber of Commerce President Tony Rescigno predicted a positive change in the unemployment figures. Rescigno said other economic statistics seem to be going in the right direction, making him believe there will be “gradual improvement” in the city’s jobless rate.

Rescigno said an improvement in the unemployment numbers could have a “huge effect” on the area’s economy, leading to gains in consumer confidence and business spending.

“It’ll have a positive effect on the economy over the next six months,” Rescigno said.

But the weak economy, combined with high housing prices, has made it difficult for many low-income workers to continue to pay their rents or mortgages, said Harvey Edelstein, an executive with the Fair Haven Development Corporation. Edelstein said wages have not kept pace with housing prices, requiring some families to take out high-interest loans.

Edelstein also said the DeStefano administration — which has clashed with the Fair Haven Development Corporation in the past — has done little to reduce the burden on working families, especially given a recent hike in property taxes.

“The ability of low- to moderate- income people to acquire homes of their own is quickly disintegrating in New Haven,” Edelstein said. “It’s a vicious cycle when these prices go up, and the programs are not available for low-income families so that they can really afford housing.”

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