The share of RI residents working is now the lowest in 30 years

Rhode Island achieved a worrying new milestone at the end of 2013: the share of the state’s residents who were working dropped to the lowest level in 30 years.

Just 58.8% of Rhode Islanders ages 16 and up were employed as of November and December, according to revised employment data released last week by the R.I. Department of Labor and Training. (The count excludes institutionalized individuals and active-duty military personnel.)

Before that point, Rhode Island’s employment-population ratio hadn’t fallen as low as 58.8% since April 1983, when the economic recovery during President Reagan’s first term was getting started.

And not only is the 58.8% figure far below the pre-recession high of 65.5% during the winter of 2006-07 – it’s actually lower than at any point during or after the official Great Recession, as this chart shows:

RI employment population 2006 2013

As you can see on the chart, the share of Rhode Island’s adult population with a job plunged from 65.5% at the start of 2007 – when it nearly matched the all-time high of 65.6% recorded in the boom times of late 1988 and early 1989 – to an initial low of 59.5% during the fall of 2009.

After a slight improvement in the early part of 2010, the share of the population working shifted into reverse again through November 2011; a second upward trend in 2012 stalled out the following winter, turning 2013 into another year of decline – even as the official jobless rate improved to a post-recession low of 9.3%.

At this point, Rhode Island’s employment-population ratio is barely a percentage point above its lowest level since records started being kept in January 1976: 57.6% in December 1976, a time when women were beginning to enter the work force in large numbers.

In raw numbers, 50,000 fewer Rhode Islanders are employed today than were at the end of 2006.

One of the biggest questions facing policymakers, then, is how many of those 50,000 wanted to stop working over the last six years – to retire, to go back to school, to stay home with children – versus being forced to stop working due to a lack of jobs. The state probably isn’t heading back to the 2006 level of 65.5% considering that baby boomers are starting to retire – so what’s the “new normal” for full employment?

Rhode Island isn’t alone in experiencing a sharp drop in its employment-population ratio since the recession: the nation’s fell from 63.4% to 58.8%. But the decline has been about one-third more in Rhode Island (6.7 percentage points) than in the nation as a whole (4.6 percentage points). And studies show that long-term unemployment can have “devastating and enduring” consequences for those who experience it.

Contrary to popular belief, one thing that hasn’t dropped since 2006 is the size of Rhode Island’s 16-and-older civilian non-institutional population, according to DLT data. Here’s that figure, plus total Rhode Islanders employed and total in the labor force, compared with their January 2006 levels:

RI labor stats Dec 2013 vs Jan 2006 level

As this chart shows, over the last few years population growth hasn’t led to growth in employment – or even in the size of the labor force – in Rhode Island.

From March 2010 to December 2013, the total population of civilian non-institutionalized Rhode Island residents ages 16 and up increased by 5,200. But the number of them who were employed fell by 6,800, and the number of them in the labor force dropped by 23,800.

Update: By popular request, this chart shows Rhode Island’s employment-population ratio since 1976 (the first year records were kept):

RI employment population 1976 2013 fill

• Related: The RI job market is in even worse shape than we thought (Feb. 27)

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