Where Are The Jobs?
Friday, September 16, 2011
It’s been nearly thirty months since Rhode Island’s rate of unemployment failed to rank among the highest in the country. The state has been losing jobs for more than 4 years – beginning at a time that precedes the start of the recession. In fact, as far back as March 2007, unemployment in the Ocean State began to rise steadily in advance of the rest of the country. Sadly, these are dubious distinctions that no one would want to stake claim to.
In an effort to gauge the strategies being developed to dig Rhode Island out of its job-related doldrums, GoLocalProv requested growth plans from state leadership. Not everyone had something to share. The Governor’s Office and Greater Providence Chamber of Commerce failed to provide comment, while materials were submitted by the Economic Development Corporation, Office of the Lt. Governor, Speaker of the House Gordon Fox, and Senate President Teresa Paiva-Weed.
A Downward Spiral
Rhode Island first began losing jobs as early as 2006, exposing a pronounced shift in the types of positions that would be most affected. According to a report by Manufacturer’s News, Rhode Island lost more than 3,000 industrial jobs in 2006. This 3.9% industrial job loss was the highest rate in New England, showing that Rhode Island’s high dependency on manufacturing and factory jobs stood on shaky ground.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTBy the time a recession was officially declared in December 2007, Rhode Island’s rate of unemployment had grown to 6% - a full percentage higher than the National rate. Just 6 months later, Rhode Island’s unemployment continued its upward trajectory by reaching 7.6% - further distancing itself from the National rate which had inched up to 5.6%.
Rhode Island continued to struggle as the calendar changed from months to years. In early 2009, the state’s unemployment rate topped 10%, a level not seen since 1975. At this point, Rhode Island’s jobless situation had solidified itself as the third highest in the country. More than 2 years later, in August 2011, Rhode Island still ranked among the top 5 for highest unemployment. The state’s unemployment rate peaked at 11.8% in February 2010. While it has improved slightly since then, down to 10.8% as of the most recent report, there is still a long way to go in returning Rhode Islanders to work.
For former Congressional candidate Anthony Gemma, the numbers aren’t good enough. During his campaign last year, Gemma claimed he could create 10,000 jobs within five years and that it would cost nothing to taxpayers. He said he’s offered up his plan to state leadership, but no one has taken him up on the offer.
“My jobs plan is available to anybody who wants to see it,” Gemma said. “Everyone should be at table to talk about how to make it happen, but I do not believe people are willing to put in the hard work and the dedication to do it.”
No Shortage of Ideas – But What Will Work?
So will they? GoLocalProv combed through the materials provided by state leadership. Common threads exist between all of the plans; most notably the important roles that taxes, a balanced budget, better utilizing the state’s working waterfront, and moving towards 21st century jobs play in reversing the current trend. One thing, however, is inherently clear. In order to succeed in getting Rhode Islanders back to work, everyone must be focused on the job at hand and move swiftly.
Tackling Financial Issues
The General Assembly passed a budget for the 2012 Fiscal Year that closed a $300 million gap. According to Speaker Fox, this was done largely through targeted spending cuts. Tax increases were seen as an absolute last resort with a responsible state budget being crucial to turning around the economy and strengthening economic development efforts. The first step in helping to put more money in the pockets of Rhode Islanders was this past year’s overhaul of the state’s income tax structure. By reducing the number of tax brackets, and lowering the highest marginal rate from 9.9% to 5.99%, the state is working to position itself as a more attractive place to do business. The overhaul also increased the standard deduction for all taxpayers.
“I believe that significant tax-reform legislations sends a loud and clear message to all other states that Rhode Island is aggressively seeking to attract business, create new job opportunities and ensure that our economy is moving in a positive direction,” commented Speaker of the House Gordon Fox.
While tax reform has largely been supported on Capitol Hill as a means for righting the ship, much emphasis remains on using these changes to best position Rhode Island as a place to do business and establish jobs. Change is coming along slowly. In July, the Rhode Island Department of Labor and Training reported a growth of only 1,300 jobs in state.
As Pension reform remains a hot button topic across the Ocean State, the plans and responses provided to GoLocalProv made little mention of how change would be enacted – or when – only that the fall session will give the Assembly the opportunity to fully focus its attention on the issue.
Small Businesses as the Backbone
There is widespread support among those we spoke to for the advancement of small business in Rhode Island. The Lt. Governor highlights the state’s resources; universities, hospitals, a growing high-tech community, and the potential for ‘new economy’ businesses such as ‘green’ initiatives as critical vehicles to drive the state’s future.
“Rhode Island needs a strong, diverse, 21st-century economy that will create 21st-century jobs for our residents,” stated Lt. Governor Elizabeth Roberts. “Our state needs to seek passage of legislation that will create incentives for solar power in Rhode Island. Studies have shown that solar power creates more jobs per megawatt than other renewable energy sources,” finished Roberts.
In support of small businesses, the Economic Development Corporation sees the need to increase the access to capital to help fill the gaps in financing and resources that provide funding solutions to businesses in all stages. Right now, financing programs such as SBLF, Slater and STAC are not strategically aligned. The EDC believes that moving towards greater alignment would create a “One Stop Shop” for business funding and help more companies have access to the capital they need to be successful.
This would be vital to continuing the transformation of activity in what’s long been called the ‘Jewelry District’ to a new ‘Knowledge District’ with the potential to attract more high-tech entrepreneurs to the state.
The EDC’s plan also includes an emphasis on making it easier to do business. By lobbying for a reduction of permit and license approval times, and simplifying regulatory processes for businesses across state and municipal agencies, businesses will deal with less ‘red tape’ as they work to establish themselves and expand. According to Senate President Teresa Paiva-Weed, the Senate built upon these ideas by enacting legislation into law that would effectively cut permitting wait times.
Working by the Water
The establishment of the 195 Commission, and an investment in Providence’s ports, are also seen as important factor in creating jobs. According to Speaker Fox, the city’s ports have been underutilized for far too long, and investing in them will create the good-paying blue collar jobs the state needs. In reviewing the EDC’s plan, finding ways to best utilize the 40 acres of prime land along the edge of downtown will help to create a vibrant collection of businesses, non-profits, academic institutions, hospitals and entrepreneurial starts ups all co-existing within a thriving mixed use community. This is seen as imperative in moving Rhode Island closer to creating the 21st century jobs it needs, and further away from the manufacturing focus that has long since left.
“The Port Commission worked throughout the Assembly’s session to explore maximizing the potential of Rhode Island’s working waterfronts,” stated Senate President Teresa Paiva-Weed. “A study found that additional development in these areas could generate more than 1,000 jobs, with more than $70 million in wages and $8 million in new tax revenue.”
Time Will Tell
Rhode Island’s leadership seems to understand the dire situations that face our state’s economy and job growth prospects. As they work together in an effort to strengthen, stimulate, and grow the economy, taxpayers remain weary of when Rhode Island will demonstrate the employment improvements of states like Massachusetts – where unemployment currently sits at 7.6%, and falling.
It’s time to reform pension, provide better support for small businesses, invest in education and improve the state’s crumbling infrastructure. By doing so, it will send a message to people across Rhode Island that change, for the better, is coming.
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