New Haven Independent

According to the Brookings Institution’s MetroMonitor, the New Haven-Milford metro area is one of only two nationally to add jobs during the first quarter of this year. It placed first in job growth. McAllen, Texas was the only other metro area in the U.S. to add jobs; it added slightly fewer than New Haven.

The reason is that the sectors on which our economy is based — higher education, medicine and all the businesses that serve them — are more resistant to recessionary pressures than those based, for example, on tourism, auto manufacturing or the financial markets, said Alan Berube, a Brookings senior fellow. Click on the video to hear Berube talk about the survey.

The survey is available here.

New Haven’s economy doesn’t soar like others may in good times. The same factors keep it fairly stable in bad times, experts said in telephone interviews.

The nation does not have just one economy, but 366 separate economies, one for each metropolitan area, Berube said. The recession has not affected all those economies equally. His work looks at the 100 largest of those metro areas.

“Compared to a national employment decline of 3.7 percent from the fourth quarter
of 2007 through the first quarter of 2009, metro areas with specializations in education and health care saw employment drop by an average of only 2.0 percent, and those specialized in government/military employment saw average job losses of 1.3 percent,” he said in a statement accompanying the survey. New Haven gained 0.2 percent in employment during that time.

“Specialization in these less volatile economic activities may help account for the relatively stable performance of educational centers like Boston, New Haven, and Provo (Utah); health care centers like McAllen, New Haven, and Springfield (Mass.); and government/military centers like Honolulu, El Paso and Washington, D.C.,” he said.

Brookings uses standard metropolitan areas as defined by the Census Bureau, such as the New Haven-Milford area, which encompasses New Haven County, to compare with other such areas. In Connecticut, the other areas surveyed were Hartford and Fairfield counties.

The city, Yale University, the Yale-New Haven and St. Raphael’s hospitals and the Yale Medical School, and businesses that serve them, are such a large factor in the New Haven area that they are the major influence the economic health of the whole county, Howard Wial, a Brookings senior fellow, said in a telephone interview. (Berube was not available.)

“Yes, Yale’s tentacles do reach out that far,” he said. “If you want to look at what is propelling the regional economy,” then look at New Haven-based institutions, Wial said.

The numbers do mask a vast disparity in economic well-being, between the city and wealthier suburbs, he said. The survey did not break down the numbers by economic, ethnic or racial factors.

The survey breaks down the economy into eight sectors and their rankings among the 100 top statistical areas. It uses only four of them — change in employment, 1 year percent change in unemployment rate, change in gross metropolitan product, change in house prices — to determine which areas are strongest, second strongest, middle, second weakest and weakest. Although it is an incomplete picture, it is valid for comparison with other metropolitan areas, he said.

New Haven is in the strongest category, while Hartford and Bridgeport are in the second-strongest category. Individual breakouts on the 100 metropolitan areas are contained in the document.

Although the region has lost manufacturing and construction jobs, those were more than made up for by job gains in education and health services, where 71,600 of the 274,100 regional jobs exist, said economist Nicholas Perna, a visiting lecturer in economics at Yale and an economic adviser to Webster Bank.

Bureau of Labor Statistics figures on Connecticut are available here.

The stable environment also benefits those who are poor or lower-middle class, Perna said, adding that New Haven is poor in level terms.

“Would you rather be poor in an area that is holding steady or going down quickly?” he asked.

Wial agreed, saying that although there are disparities between wealthy and poor in the region, they are not as pronounced as they are in Fairfield County or New York City.

The area’s business climate also is helped by the stable economic environment, said Anthony Rescigno, president of the Greater New Haven Chamber of Commerce.

Retail and real estate are affected, but less then in many other areas because the booms were not as high, so the busts are not as low, Rescigno said. The 10,000 jobs at the hospitals and the 13,000 jobs at Yale are a stabilizing factor. He said that while many people from the suburbs work in New Haven, many city residents also travel to the suburbs to work. He gave Covidien, the former U.S. Surgical in North Haven, as an example.

But he admitted the wealth had not been spread evenly.

“Not everyone is doing well. People in the fast-food industry are not making lots of money,” he said.

The fact that government and the business community are regionally inclined is helping the economy.

“That’s one of the things I’ve always said. I was born here, ran the town of North Haven for 11 years, and I’m proud that right now, there is a huge amount of cooperation going on among mayors and first selectmen. It’s a large part of our success,’” Rescigno said.

The Greater New Haven area’s 8.3 percent jobless rate is ranked 41st among the 100 metro areas, while the one-year rise of 2.5 points is 19th, meaning 81 of the metro areas had a higher jump in unemployment from the first quarter of 2008, according to Brookings. But wages went up more slowly in New Haven than in 75 other metro areas.

Asked to look at tea leaves, the two economists, Wial and Perna, were upbeat about New Haven’s continued recovery from the recession.

“New Haven seems to be in a pretty good position” to weather the recession successfully, Wial said. “There is no huge housing boom or bust, no auto manufacturing. New Haven will be spared the worst because of the higher education and health services,” he said.

Perna said that all the economic signs so far are pointing to the recession bottoming out at the end of the year. When you are getting a pattern and the pattern continues as it has, then stability is months, not years, away.