Manijeh Zavareei

January 9, 1997

Introduction

This report is in two parts. The first part gives an overview of the City of Hartford’s labor market. The second part specifically concentrates on the ten Hartford-based major employers outside the government sector, as it relates to the City of Hartford residents.

To gather information for part two, a questionnaire (Appendix A) was sent out to fifteen companies (Appendix B) in July of 1996. In October of 1996 the non-respondents were individually contacted and another set of questionnaires were sent out. Finally seven of the questionnaires were completed. This was complemented by the data provided by SINA (Southend Institution Neighborhood Alliance) on the four Frog Hollow organizations*.

To date three basic conclusions can be drawn:

1. A very small percentage of the employees of the major Hartford-based corporations and institutions are Hartford residents;

2. The Hartford residents employed are mostly in the low-paying, low- skill jobs; and

3. The purchases of goods and services by these major Hartford-based corporations and institutions from Hartford-based vendors is extremely limited.

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* The four institutions include, Connecticut Children’s Medical Center, Hartford Hospital, Institute of Living, and Trinity College.

PART I

A. A Brief Review of the Labor Market Data

The labor market in Connecticut is divided into ten regions. Hartford labor force is the largest of the region.

Table 1

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Labor Market Area Labor Force Unemployment Rate (%)

(May 96) May 96 May 95

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Waterbury 119.100 5.3 6.0

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Source: The Connecticut Economy, July, 1996, pp.16-17.

Hartford Labor Market Area (LMA)* provides 37% of all non-farm jobs in the State of Connecticut. Between May 1995 and May 1996, a total of 3,900 jobs were added for a gain of 0.7%. Among the major sectors, construction was very strong while manufacturing lost 1,500 jobs. ¹ This led to a drop in the unemployment rate in the Hartford LMA from 5.9% to 5.1% between 1995-96. The rate for the City of Hartford fell from 10.9% to 9.3% for the same period. (Table 2). For the State, the unemployment rate fell from 5.4% to 4.8% during the same period².

Table 2

Labor Force Data

Labor Force Labor Force Employed Employed UnEmp. % UnEmp.%

95 96 95 96 95 96

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State of CT. 5.4 4.8

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* Hartford LMA includes Andover, Avon, Barkhamstead, Bolton, Canton, Colchester, Columbia, Coventry, East Granby, East Haddam, East Hartford, East Windsor, Ellington, Enfield, Farmington, Glastonbury, Granby, Hartford, Hebron, Manchester, Marlborough, New Hartford, Newington, Rocky Hill, Simsbury, Somers, South Windsor, Stafford, Suffield, Tolland, Vernon, West Hartford, Wethersfield, Willington, Windsor Locks.

The decrease in the unemployment rate for the City of Hartford, the Hartford LMA and the State must be interpreted in the following context. First, many discouraged workers dropped out of the labor force and/or moved out of the State. Second, while the unemployment rate fell, non-farm employment growth decreased several times over the past year in the State: "Connecticut has only gained back approximately 15-20 percent of the jobs lost during to the most recent recession"³. In fact, in just one year (November 1994-November 1995) the Hartford LMA lost 11,600 jobs, a drop of 1.9% This is the largest percentage decrease--as well as absolute decrease--among the major labor markets ⁴.

Finally, it is expected that recent welfare reforms will push the unemployment rate up still further, especially in the City of Hartford. It is estimated that over a three-year period, approximately 55,000 adults (General Assistance and AFDC) will require employment in the State. The need will be very large in Hartford, where there are nearly 35 welfare recipients per 100 employed workers (Figure 1) and an estimated 50% of General Assistance recipients and AFDC recipients do not have a high school degree or equivalent⁵.

Figure 1

Adult Welfare Recipients Relative to Number Employed

Source: The Connecticut Economy, January 1996

B. Hartford Employment

There are five basic features to the employment structure of the City of Hartford.

1.) The jobs in the City are predominantly in the service industry. For example, in 1995, 95% or a total of 115,130 of the hobs in Hartford were in the service industries including the finance, insurance and government sectors. Manufacturing represents less than 4% or 4,710 of the city’s jobs (Table 3).

Table 3

Total Non-farm Employment in Hartford

June 1995

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Government 25,060

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* Transportation, Communications & Public Utilities (incl. Railroads)

2.) The majority of those service-sector jobs, however, are held by non- residents of the city of Hartford. According to Connecticut Labor Department data for every 240 jobs in the City, 100 Hartford residents were employed (Table 4).

Table 4

Jobs by Town Compared to Town Residents Who were Employed as of June 1992 ______________________________________________________________________________Town Jobs Residents Employed J/E (%)

Windsor Locks 17,230 7, 034 245.0

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Source: The Connecticut Economy, January 1994.

Other 1990 Census data also show that 27.1 of the workers who live in the Hartford Metropolitan Statistical Area work in the central city (Table 5).

3.) Since only about 56,000 Hartford residents were employed, one would expect that a large portion of that group would be employed in the City. But according to the 1990 Census only about 58.9% of Hartford residents who work, work in the City (Table5).

4.) By far the lowest median income of those who work in Hartford ar Hartford residents. According to the same 1990 Census the median income for Hartford residents who worked in the City was $22,140 -- the lowest among the 36 towns in the statistical area (Table 5).

Table 5

Residents of Metropolitan Statistical Area Who Work in Hartford

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Work in Htfd Total Workers %in Htfd Median Household Income

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Source: U.S. Census, 1990

Conclusion:

Hartford residents who work in Hartford are in low paying jobs in small businesses in the City. To support this argument, the following examines the pattern of employment in the Hartford-based major corporations.

A. Major Companies based in Hartford

1.) Table 6 lists the sixteen largest public and private companies and institutions, in terms of annual revenue, based in Hartford as of 1995. These Hartford-based major companies and institutions include major multinational corporations such as United Technologies, Aetna, ITT Hartford and regional companies such as Advest, Phoenix Mutual, and Hartford Steam Boiler Inspection Company, as well as nonprofit institutions such as Trinity College.

Table 6

Hartford Based Largest Public and Private Companies and Institution (1995)

Hartford Hospital Health 428.0 5,790

Source: The courant 100 by rank, Hartford Business Journal and response to questionnaires sent to companies and institutions.

B. Economic Impact of Large Companies and Institutions on the City of Hartford

Below the economic impact of these companies and institutions will be examined using three basic criteria:

1.)The number of Hartford residents employed by these major companies;

2.) The income range for the Hartford employees of these major employers; and

3.) The portion of these organizations’ budgets spent on goods and services in

the city of Hartford.

The data presented below are based on the answers to questionnaires that were sent to these corporations during the summer of 1996. In an attempt to elicit more responses a second set of questionnaires were mailed out by October 1996. The data remains incomplete due to the lack of response y some of these corporations. Nonetheless, some generalizations can be made based on the existing data.

1.) The number of Hartford residents employed by Hartford-based corporations and institutions (Table 7 and Figure 2) reveal that a small percentage of the employees of these large organizations are Hartford residents. This is true more for the corporations based in the downtown core, than for the institutions based in the Frog Hollow (central southwest) area.

Table 7

Employment Structure of Hartford-Based Companies (1995)

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Company # of Empl.* #of Empl. In CT. #of Empl. In Htfd #of Empl. Living in Htfd.

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Source: Chamber of Commerce and Questionnaires sent to individual institutions

Figure 2

2.) Table 8 and Figure 3 demonstrate that the income of the Hartford residents employed by the major Hartford-based employers, with a few exceptions, fell well below the $50,000 level.

From the existing data we can conclude that many of the positions held by the Hartford residents are low-paying, low-skill jobs with little chance of upward mobility.

Table 8

Residents of Metropolitan Statistical Area Who Work in Hartford

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$20K and below $21K-$50K &51K-$99K $100K & above Total

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Source: Questionnaires

Figure 3

1994 data provided by SINA (Southend Institutions Neighborhood Alliance) Reveal that the average Hartford resident employee income for the four institutions in the Frog Hollow neighborhood (The Connecticut Children’s Medical Center, Hartford Hospital, Institute of Living, and Trinity College) was between $12,000-$19,000. This leads us to a similar conclusion: most of the jobs held by the Hartford resident employees are low-paying jobs (Table 9).

Table 9

Average Income of Hartford Resident Employees of SINA Institutions

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Institution Employees residing in Hartford Dollars paid to Hartford residents Average

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3.) Other economic impacts that these corporations and institutions might

have on the city of Hartford is analyzed in terms of their purchase of goods and services from Hartford-based vendors. This data remains inconclusive. So far, the majority of the respondents have not been able to provide such information formulated in this manner. Table 10 and Figure 4 depict the data currently available.

Table 10

Portion of Budget Spent on Goods and Services from Hartford-based Vendors

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(in 000) Services in Hartford ( in 000) (%)

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Source: SINA

Figure 4

Conclusion:

All data points to the minimum economic contribution by the Hartford-based major corporations and institutions on the city of Hartford both in terms of employment of Hartford residents and the purchase of goods and services from Hartford vendors.

Three policy implications might be:

A. Give higher priority to Hartford residents in hiring for new positions.

Training programs could be organized to develop applicant pools for new job openings.

B. Provide general training programs for the Hartford resident employees to enable them to compete for promotion to better positions within thesecorporations and institutions.

C. Advocate more direct connections between Hartford vendors and major

Hartford-based corporations and institutions.

Footnotes

1. Cladwell, Edwin, The Connecticut Economy, July 1996, p.14

2. The Connecticut Economy, July 1996, p. 1

3. Walker, David, The Connecticut Economy, January 1996, p.6.

4. Cladwell, Ewin, Ibid. p. 14.

5. Walker, David, p.6.

Bibliography

1. Annual Reports

2. City of hartford: Department of Planning and Economic Development, State of the City, 1995.

3. The Connecticut Economy, A University of Connecticut Quarterly.

4. Connecticut Department of Labor, Office of Research.

5. Greater Hartford Chamber of Commerce.

6. Hartford Business Journals, Monthly.

7. Hartford Business Journal, Book of List, Annual.

8. Hartford Courant; "The Courant 100 by Rank".

9. SINA reports, 1994, 1995.

The CEO salaries of the Hartford Based major companies

The salaries of the CEO’s are only available for some publicly-owned major companies. The range is between over $500,000 to over $3 million.

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Company Name of CEO Position Salary

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The Advent Group Weintraub, Allen Chief Executive Officer $640,262

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