Unemployment Down, but Situation still Severe

Friday, April 15, 2011

GoLocalProv Business Team

For the third month in a row, Rhode Island’s unemployment rate has continued to fall, settling at 11% for the month of March—down nearly a full percentage point from its January high of 11.9%. Despite this modest decline, the state remains in dire economic straits; it continues to be one of only 9 states with double-digit unemployment—an unfortunate trait it picked up over two years ago in January of 2009. Nonetheless, last month’s job numbers do offer some signs of hope.

In addition to the incremental drop in the overall unemployment rate, the actual number of unemployed RI residents—those actively seeking employment—decreased by 1,100 since last month, falling to 63,000. This decline represents the 12th consecutive over-the-month decrease in the number of unemployed RI residents, and the lowest rate since July 2009. Of the 63,000 unemployed, on average only 39,341 of them were receiving weekly RI unemployment benefits, which is down by 1,633 since February, a decrease of 4%.

The state also saw relative job growth, adding 1,000 jobs over the course of the month. Interestingly, this growth was largely centered in the Accommodations and Food Services sector, presumably as a result of restaurants and hotels gearing up for the coming tourist season.

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Unfortunately, however, employment did fall by 900 in March, but compared to last year, the current situation remains a considerable improvement. Over the course of the past year, employment has gone up by 1,900, or 0.4%, with significant job gains in eight different economic sectors.

Manufacturing Up

The month of March saw notable improvements for workers in the manufacturing sector as well. Manufacturing employees earned an average of $15.2 per hour, up sixteen cents from February and a full fifty-four cents since last year.

Unfortunately, not all the figures are so rosy. The encouraging 1,100 drop in unemployed persons was nearly offset by the 900 person decrease in employment. Perhaps most unsettling, however, was the over the month loss of 1,900 from the labor force, bringing it to its lowest level since December of 2009.

Education Down

In terms of Jobs, the education sector lost 500 jobs since February, primarily as a result of cut backs at private colleges, universities and schools. Over the course of the past year, job loss in the education sector has been even more severe, with employment down by 1,500 since March 2010. Government employees, whose pensions and benefits have been garnering a great deal of media attention recently, decreased significantly in the past year as well, losing 1,100 jobs as a result of cut backs at the local level.

Compared to New England

Given the broader context, however, things still seem rather bleak for Rhode Island. While the gradual decline of the state’s unemployment rate is heartening, it remains the highest in New England, and towers above the national rate of 8.8%. What’s more, regional neighbors New Hampshire and Vermont have some of the lowest unemployment rates in the nation, throwing Rhode Island’s crisis into bolder relief and leading to increased suspicion of incompetent governance and corruption.

Since the economic collapse began back in 2007, unemployment in the state has grown exponentially, peaking three months ago at a staggering 12.8%. It’s appealing to imagine that the rate’s incremental descent in the past few months is the beginning of sustained downward movement, but this is far from certain. Back in September of 2010, after multiple months of steady decline, the unemployment rate had sunk all the way to 10.7% percent only to shoot back up 11.9% in January. Let’s hope this recent trend won’t be so short-lived.

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