RI facing ‘a lost decade’ after jobless rate hits 11% in new data

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – It turns out Rhode Island’s job market wasn’t as ugly as it looked in 2011.

It was worse.

Rhode Island’s unemployment rate hasn’t fallen below 11% in more than two and a half years and was higher than originally reported throughout 2011, according to revised data released Wednesday by the Department of Labor and Training. Fewer residents were working or looking for work last year than first reported, as well.

“It shows that the recovery was probably a little bit slower than we thought,” said Zachary Sears, an economist with Moody’s Economy.com who tracks Rhode Island. He cited a number of factors that held back the economy in 2011, notably the euro crisis, the debt-ceiling debate and rising oil prices. “All those weights make for a very slow recovery.”

Rhode Island will not regain all the jobs the state lost in the downturn until 2015, the same year the unemployment rate will fall back to 6%, according to Economy.com’s forecast. The state began losing jobs in 2007, about a year before the nation as a whole.

“It comes back later and Rhode Island also went into recession a little earlier, so it’s a longer period of very difficult times,” Sears said. “That’s from 2007 and you get back there in 2015. That’s a long time. That’s almost a lost decade, so to speak.”

The so-called “benchmark revisions” adjust the employment data reported month by month during the prior year, which come from sample surveys, by comparing them with tax records and other data.

Among the most worrying revisions was the new estimate of the size of the labor force, which counts how many Rhode Islanders are working or looking for work. The state’s labor force dropped to 562,007 workers in December, lower than during the worst of the recession in the spring of 2009, partly because the state has continued to lose population.

“That’s not good,” Sears said. “It goes against our forecast. We expected a slight increase in 2011 that would come along with the improving economy, and that didn’t happen. That is worrisome.”

“We still have population turning around [in Economy.com’s forecast] – it’s just been delayed,” he said. “But to the extent that those weak demographics continue and don’t improve as the weak economy improves, it’s more symptomatic of a long-term problem and not just cyclical.”

The new data shows Rhode Island’s unemployment rate rose from 4.8% in January 2007 to peak at 11.9% in January 2010, then slowly started to fall over the last two years. In 2011, the state’s private sector added a net 2,200 jobs while employment in the public sector fell by 1,100.

Sears did see one possible silver lining in the latest numbers. The revised data only extends through September, with survey figures being used for the last three months of the year. Income tax receipts and new claims for jobless benefits led him to thinks the current estimates overstate how weak Rhode Island’s economy was at the end of last year.

“If you look at the national economy, it picked up speed in the fourth quarter after weakness in the third,” Sears said. “There’s no indication that Rhode Island did anything different.”

“Rhode Island is a small economy,” he added. “Most of what determines the fate of Rhode Island happens outside of its borders.”

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi

32 thoughts on “RI facing ‘a lost decade’ after jobless rate hits 11% in new data

    • Tax cuts? The budget keeps rising every year? Revenue has to come from somewhere. We keep getting taxed and fee’d to death. Government is not going to get RI out of this recession. Until real tax cuts are implemented and welfare state policies eliminated, we will always be mired in an economic mess.

    • Fish have you done your taxes this year. If you own your own house and have deductions you can itemize on your federal taxes, this year in RI you can only deduct $15K.

      • Why yes I have. Thanks for asking. And yes, because rich people got a tax break, I got a tax hike. The more we raise taxes on the middle class to give breaks to the rich, the further RI falls behind.

    • Where has there been a tax break for the rich? In Rhode Island I am considered rich, I am paying so much in taxes that it is unacceptable. People of wealth will not claim Rhode Island as a state of residence. Do you understand why? The taxes are too high! All you have to do is go into downcity Providence and look at all the empty retail space, no business will set up shop in Rhode Island because the taxes are too high. Does this make sense? Do you think the house owned along the water belong to Rhode Island residences? They don’t nobody in their right mind would pay Rhode Islands income tax. That is why there are no decent private sector jobs in this state. Fish, you are so pathetic that you don’t grasp this concept.
      Fish my believe of Rhode Islanders fits you to a “T”.
      I find the people of Rhode Island myopic, provincial, show lack of insight, are emotionally gifted, have poor judgment, are ethically challenged, and are morally bankrupt.

  1. Ted, this can’t be. I can’t believe that job numbers were fudged. Oh wait that’s right the NRA fudged the real estate sales stats for the last few years nationally too.

    Funny the stock market goes up when the fudged numbers are released but when the real numbers are released there is no reaction.

    Anyone that’s taken the time to look at what they use to create these numbers knows they are fudged and useless.

  2. My question is how many jobs were lost? I don’t why you people are surprised. You people keep electing the same people who just know how to spend and buy votes by giving away the store. The store does not have anymore to give away. What you people have to learn is you can’t buy yourself proseperity, stop condoning and enabling negative behavior, lastly vote out all elected officals who brag about being the big spenders. The way you know they are a big spender they love to use taxpayer money for their pet projects.
    You also need to learn that people of wealth do research before relocating to a new location. They look at taxes, business regulations the public schools, the municipal and state bond ratings. Rhode Island fails on all these areas in fact most of you are proud of the states negative business stance. You people have the government you want but you can’t accept the consequences of your behavior. Too many of you are afraid of people from elsewhere. Many of you know you don’t compare postively to people from the rest of the country. It is sad so many of you are so resistive to change. Just because that is how you were brought up does mean it is correct. Many of you grew up in families where fathers “found things that fell off trucks”. You need to learn to call things as they are, the above is called stealing.

      • I agree. I have lived other places and found that RI is too small all the people are to interconnected. Everyone knows someone which makes it that much easier to consolidate power leading to runaway corruption.

        Obviously can’t make the state larger, but we can reduce the size of the government and reduce redundant agencies and services.

        How about consolidating some fire districts in these little villages. There are some towns with 3 or 4 fire chiefs…is that really necessary?

      • Eric you are another Rhode Islander who reinforces my thinking of Rhode Islanders. Perception is reality. I find the people of Rhode Island myopic, provincial, show lack of insight, are emotionally gifted, have poor judgment, are ethically challenged, and are morally bankrupt.

      • Hello Cosmo, I just got back from missionary work in the RP. It is a country that is trying to change their image and elminate corruption. It has to start with the people and the people have to stop looking for handouts from the government.

  3. R.I.’s unemployment rate will never drop as long as the tax and spend legislators outnumber the few fiscal conservatives in the General Assembly. Gov. Chafee does not help the situation with his proposed new taxes. You can NOT tax and spend yourself out of a decade-long recession. The state’s problems can be boiled down to one fact–R.I. has too much government and government in R.I. costs too much. Until our elected leaders start enacting laws that will solve these two problems, nothing will change in R.i.

    • Robert, Rhode Islands perception precedes it, until the people of Rhode Island decide to vote anti incumbent nothing is going to change. Here is a quote that fits Rhode Island from the 1968 Democratic National Convention, “the world is watching.”

  4. Stop blaming the RI politicians for RI’s weak economy. The Massachusetts statehouse is full of lawyers and other hacks too, but that does not really hurt the always thriving MA economy.

    RI’s weakness is its provincial nature. K-12 schools are terrible, except for Barrington and EG. Gist is on track to help that situation, much as Tom Birmingham, MA sentator did in the early 1990s, when MA schools were about where RI schools are today.

    What’s needed here is for enough people ages 20-40 to create businesses that provide products or services beyond our little state. Only when smart young college educated Rhode Islanders stop leaving for good jobs elsewhere will our economy amount to anything.

    I moved here from MA six year ago, after 40 years in IT businesses, where we always saw RI as a tech backwater state. e.g. one authorized Apple dealer in the 1980s, vs dozens in MA. (and the dealer, Unicom was and is a great tech product and services provider)

    Too bad we elected Chafee as governor. His business awareness is zero. Robitaile would have been much better.

    • Bob how can you not blame the politician of RI? In Mass there are 6.5 million people they have a 30billion dollar budget that’s 4.6 billion per 1 million people or so. In RI the budget is 7.9 billion for 1million people. Why is RI budget almost double per million people? Do we get better services than Mass? I’m not saying Mass is better, but RI budget is out of control in my eyes.

    • No business is going to relocate to RI due to the significantly higher costs of operating. Why pay more to run your biz out of RI when it is cheaper to operate in another nearby state???

    • Massachusetts has a huge collection of top flight Universities (MIT, Harvard, WPI, feeding grads to businesses and start ups. They have always had the tech loop – 128 and 495 which at one time was head and head with Silicon Valley.

      When Bristol Meyers Squibb built their $1 billion dollar plant in Massachusetts a few years ago why didn’t they pick Rhode Island instead? The EDC tried and failed. You won’t hear about that though.

      New Hampshire has it right and their unemployment rate shows it. Its less than half of RI’s and 2-3% less than Massachusetts.

      These young people leave the state because there is greater opportunity out of state. Funny you start out by saying ‘don’t blame the politicians’ then you end with ‘too bad Chaffee was elected’ You ought to think about that for a minute

  5. I’ve had it with RI. My wife is a physician and I’m a small business owner. IMO, RI is a melting pot! The infrastructure and roads are horrible and the schools are 25th in the country! Yes we stink for business and the burden for business is hard, but I’ve still made a nice living here and a lot of money.. The problem is with doctors.. They are leaving and fast. I will happily run my business till June, then won’t look back, as I believe RI will be absorbed into the abyss!!

  6. 11%? Does this include those who’ve given up looking for employment? Dopes this include underemployed? This state has been and remains a basket case. It is not unique. Most of the northern tier of states are depressed. More government intrusion, spending, taxes, regulations, and trying to pick winners and losers have exacerbated what should be normal economic corrections. As for Rhode Island, well it is a sick joke. The best investment is in a moving van… and, not looking in the rear view mirror.

  7. The politicans in this state are the worst in the country.Lower property taxes more people would come to Rhode Island.Better tax breaks for business owners would help.RI has a justified reputation of having very corrupt politicans.Unemployment is much worse then 11 percent if you figure in the people who have given up.

  8. The Democrat Party is destroying Rhode Island. They have ruled for 7 decades and we are now ranked at or near the bottom in every category! The absolute power has corrupted them absolutely! The Rhode Island Republican Strike Force is here to save our state! Get involved!

      • Fish again your myopic views. Do you know who controls the State House? It is a Democrat named Gordon Fox. In Rhode Island the speaker of the General ASSembly has the power not the governor. Where have you been?

  9. I fail to see how the RI unemployment rate drops to 6% in 3 years time.

    This analyst doesn’t appear to be a very good analyzer, aye?

  10. Help the poor people screaming for help. Rhode island has nothing to offer anymore. Rhode island is for the RICH PEOPLE. I have lived in the state for 37 years and i have never seen it this bad. If people need help they don’t know where to turn.

    • Maria where are their “rich” people in Rhode Island? In Rhode Island I am considered rich, a word that government employees use when they try to descibe someone who knows how to read The Wall Street Journal, saves and invests in stocks that create wealth. If you are or were a state worker you received more money than you could have earned in the private sector now go away and let the people who work in the private sector decide what is correct. You are another Rhode Islander who fits my perception and the world’s of the average Rhode Islander.
      I find the people of Rhode Island myopic, provincial, show lack of insight, are emotionally gifted, have poor judgment, are ethically challenged, and are morally bankrupt.

      • Ed I find it completely ironic that you have no qualms labeling people myopic, showing lack of insight and being ethically challenged. You clearly are looking through a rose colored monocle. You are on a mission to do nothing but cut your own tax rate at the expense of others. Let’s go down your path of cost cutting. Let us invalid all public union contracts through bankruptcy. Now lets pay them minimum wage and no benefits just like a walmart employee. What now? Now we have a couple tens of thousands of people making less, getting taxed less and who is going to make up that difference? Oh wait we won’t be paying for their services so everything is golden. Now teaching is no longer a feasible career, attendance at collages decreases. Collages in turn, ask the state for more subsidies.
        There is no easy answer Ed. There is no easy out. It’s like dumping toxic waste in a playground and covering it with a mound dirt. It’s still there. We have paid for the “sins” of the past, we will pay for the “sins” of the present. You just want to pay less than the other guys.
        You call the people of RI ethically challenged, and morally bankrupt. Well I find the same labels can be applied to most corporate entities. Their off-shoring of work to exploited workers of foreign countries alone is ethically and morally wrong. But hey they sell their products and then get subsidized through wall street (even more so with your pension elimination, mandatory 401k plan with your union contracts dissolved)to keep jobs over seas.
        In closing, it’s obvious that you have no want to innovate, and find new revenue streams that would reduce income and cut tax burdens. It’s painfully obvious that your “myopic” view of cut everything is what you think will “save us all” and by all you mean your own money. I hope that one day your considered rich livelihood is exposed, so I can make sure none of my money crosses paths with your business. And that you yourself can feel the hardship that you are so willing to burden others with. You are a hateful, hateful person, but I’m sure your savior’s got your back. Pointless winkie face 😉 kisses.

      • Flailing, Rhode Island has some of the worst public sector union contracts in the country. The elected officals of Rhode Island were elected by you people. You made your own problems. Yes my tax rate is too high and it is because of the elected officals being whore to the public sector unions especially the NEA and AFT. Then you and your other public sector workfare receipents complain when you may have to make a fair sacrifice. A fair sacrifice is a 20% paycut, that you pay 35% of the cost of your health insurance, get 50% of your pension. A Cost of living adjustment that is not steady pay raise.
        Once this is done is cut the tax rate elminate many business regulations elminate social services. You and your cronies have burnt through all the money sources you could have, now the taxpayers want and need our money to support our families not you! You need to learn to adjust like the rest of us. Also rememeber we are your bosses you answer to the taxpayers who work in the private sector. You sound like the stereotypical Rhode Island public sector employee I would say you are a public school teacher. If you are Rhode Island needs school vouchers. The public school budgets need to be called education budget. Then allocate a set dollar amount the money should come from the public school teachers who are no longer needed in the public schools since more kids would be going to more appropirate schools. Where they are learning and not being warehoused, and bullied by people like you who think they are entitled to taxpayers money without regard to the taxpayers.

  11. You make an awful lot of assumptions and it shows a lot of your character. First off I didn’t vote in any of these tools in except for Senator Reed. Secondly I am not a public sector employee. Thirdly I agree that the contracts need to be renegotiated to match the current economic climate. I live work and co-habitat with the people of this state. And I hate most of them. But I don’t work myself up and make it a personal mission to cut their standard of living to the extreme you would. It’s sad that you have more compassion and caring to emerging third world countries than to those that built your so called self worth. You think cutting is the only answer. You fail to see that if we stop Medcare Fraud, Welfare Fraud, Tax Fraud, Dealer Plate fraud, and every other tax avoidance techniques we could close up these deficits. If stopped lighting up I-195, I-95, and RT-4 like it’s a mid summer after noon for almost 12 hours a night, and wasting precious money and engery. Instead you are narrowly minded focused on just one portion of tax burden.

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