Which of the following statements is true: “Rhode Island is making slow but steady progress regaining all the jobs the state lost during the Great Recession,” or “Rhode Island has made almost no progress recovering from the drop in employment during the Great Recession”?
The answer: both, at least according to the latest data from the Department of Labor and Training.
Each month the DLT (along with the U.S. Labor Department) conducts two surveys to come up with the numbers for the monthly employment report. One survey asks households to say whether their residents are working or looking for work; the other asks employers how many people they have on their payrolls.
The responses provide two different numbers. The household survey produces the official unemployment rate – it’s a count of how many Rhode Island residents are working or looking for work. The employer survey, on the other hand, produces the monthly job count (formally known as “nonfarm payrolls“).
You wouldn’t expect the numbers to be identical – after all, a Rhode Island resident from Cumberland can hold a Massachusetts-based job in Attleboro, just as a Massachusetts resident from Seekonk can hold a Rhode Island-based job in Tiverton. Since 2010, though, the two measures have diverged sharply:
This chart tracks the monthly counts from both surveys – Rhode Island nonfarm payrolls in blue, Rhode Island resident employment in red – with both of them shown as a percentage of their December 2006 levels (the peak of the previous economic expansion). The two job counts moved roughly in tandem from 2007 through the middle of 2010, but then they began to move apart – and have stayed apart for more than three years.
As of January, Rhode Island nonfarm payrolls had made up 19,100 of the 39,800 jobs lost during the recession, or 48% of the total. (Not necessarily the same jobs, of course.) But Rhode Island resident employment had gone up by just 3,200 after a decline of 52,400, for a recovery of barely 6%.
This is a perplexing turn of events. Are Rhode Island employers hiring lots of non-residents from, say, Massachusetts and Connecticut? Is there something wrong with the data? Also, which side of the equation should Rhode Island policymakers focus on – the slow but clear recovery seen in the employer payroll data, or the almost nonexistent post-recession recovery in resident employment? What do you think?
• Related: The share of RI residents working is now the lowest in 30 years (March 6)