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August 5, 2021

Study: CT’s 2020 wage rise points to job losses among lowest paid

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Average annual wages in Connecticut shot up by 8.1%, to $75,411, in 2020, state labor officials reported this month, but not because of any new robust growth in the private sector or increased worker leverage over short-staffed employers.

Instead, the statistical bump stems from the massive loss of low-paying service and retail jobs during the lockdowns of March and April 2020, when the coronavirus first reached Connecticut. Without many of those displaced workers in the mix, analysts said, white collar earnings exerted a greater upward pull in their calculations.

“One must keep in mind that this [8.1%] increase is mostly due to lower wage earners no longer being employed, raising the average,” wrote Jonathan Kuchta, a research analyst, in the Labor Department’s monthly Economic Digest report.

Early COVID-19-related closures and occupancy restrictions decimated the retail and food service industries, and while unemployment levels eased in the summer and fall of 2020, the two sectors still shed approximately 15,000 and 31,400 jobs, respectively, by the year’s end. Pandemic control measures also inflicted notable damage on industries such as government (down 11,900 jobs), arts and entertainment (8,600) and manufacturing (8,000).

Transportation and warehousing, benefitting from the massive popularity of e-commerce, were the only sectors that finished 2020 with more workers — approximately 3,500 — than they had in 2019.

Connecticut’s unemployment rate stands at 7.9% as of June, the last month for which data is available. That figure is among the worst in the country, which as a whole has a 5.9% jobless rate.
 

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