Economic Analysis: Both Cheer And Gloom For Hartford
March 17, 2010
Things in Hartford and its suburbs aren't so bad compared to metro areas around the country.
That's what The Brookings Institution think-tank analysts say after weighing Hartford's job losses, unemployment, salary trends and housing prices.
Hartford — and Connecticut — are hurting, of course. Unemployment, at 9 percent in January, hasn't been this high since 1976.
But compared to regions devastated by the collapse of the auto industry or by a housing boom and bust, Greater Hartford looks like a pretty good place to be. The city comes out much stronger in the study than the types of places Hartford economists often envy — Silicon Valley, Nashville, Charlotte and Atlanta.
Study author Howard Wial, director of Brookings' Metropolitan Economy Initiative, said: "It should make economic development people feel heartened that the recession didn't clobber the region in terms of jobs."
The average unemployment in the largest 100 metros at the end of 2009 was 9.6 percent, and Hartford's was 8.5 percent. Hartford has had a smaller rise in unemployment than 72 percent of the nation's cities.
Yet in its own report subtitled "When will Connecticut's misery end?" the Connecticut Center for Economic Analysis said a jobs recovery may never come.
Long memories are part of the reason for the gloom. According to data compiled by Moody's Economy.com, the Hartford region has never recovered from the recession of the early '90s. The region's strongest jobs showing came at the end of 1988.
"We've been here a long time, and we compare to what we once were," said Ron Van Winkle, an economist who is now West Hartford's city manager. "The Connecticut economy has been in awful shape for some time."
That the state didn't have a housing bubble like Las Vegas, Stockton, Calif., and Orlando is nothing to be proud of, he said.
"They flew closer to the sun than we did. We didn't fly so high because we were already in trouble," Van Winkle said.
There is reason to take a more pessimistic view. Albany, Buffalo, Rochester and Syracuse were all in the top 20 metros that had the least impact from the recession. The upstate New York cities are not in the bloom of health, by most measures.
Also, Moody's Economy.com has made a job growth forecast for all 384 metro areas for the coming year. Those economists project Hartford will do better than only 48 other cities, with another 0.7 percent of its employment base eroding.
Where Hartford looked worst was in gross metro product, the local version of the national GDP, which fell 4 percent from the spring of 2008 through the end of 2009. About 60 percent of GMP is the salaries earned by people in the region. It's odd that Hartford would have one of the larger drops in the country in that measure — only 18 cities fared worse — while having less unemployment.
That could be explained by a number of factors: reduced hours or salary cuts rather than lost jobs, lost bonuses, and a shift in jobs from high-paying factory work to low-paying restaurant work.
Van Winkle said he believes the problem is the shift to low-paying jobs. Next year, we'll know. If there's a strong rebound in gross metro product, the problem was the recession's impact on hours and wages, and it wasn't startling evidence of a long-term decline.
Reprinted with permission of the Hartford Courant.
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