Unemployment Rises to 11 Percent
Friday, March 23, 2012
Fewer Rhode Island residents were employed in February than at any point since the beginning of President Clinton’s second term in office, the Department of Labor and Training said Friday.
The 497,300 employed Rhode Islanders marked a 15-year low and the state’s unemployment rate inched back up to 11 percent, the first monthly increase since last June.
Nationally, the unemployment rate in February was 8.3 percent.
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According to the report, 1,500 fewer Rhode Islanders were employed last month than in January and the number of unemployed residents (classified as available for and actively seeking employment) increased to 61,700 during the month.
The state’s labor force also dropped by 6,000 in February, marking the 22nd consecutive month the labor force has decreased.
According to Dr. Edward Mazze, Distinguished University Professor of Business Administration at the University of Rhode Island, the gloomy outlook for employment in Rhode Island is expected to continue for at least the next several years.
“The unemployment and underemployment rates in Rhode Island will not change dramatically until the state improves its economic climate,” Mazze said. “Forecasts show an unemployment rate in double digits until 2013 and an underemployment rate in double digits until 2014.”
Unstable Future
Only the Accommodation & Food Services sector saw a significant spike in jobs (up 1,000) while five sectors (Construction, Other Services, Health Care & Social Services, Financial Activities, and Transportation & Utilities) lost jobs during the month.
Mazze said the economic climate in the state has gotten worse this year because of the poor financial situation of cities and towns “who use the threat of bankruptcy rather than deal with their fiscal responsibility.”
“The state does not offer businesses a friendly environment or a predictable or stable future,” Mazze said. “Business and consumer confidence plays an important role in creating jobs, and in Rhode Island, this confidence continues to be weak. The state is stuck in neutral. “
Leveling the Playing Field
Mazze offered several suggestions for what he calls leveling the playing field for businesses in the state:
He recommended, eliminating all corporate income taxes for three years so that businesses can use the dollars for taxes for creating jobs, buying capital goods and expanding. He said the expenditures for sales and materials will make up losses in tax collections freezing the income tax would “broadcast to businesses in all states that Rhode Island is open for business.”
He also called for a three-year, two percent surtax on all personal income, at every tax bracket.
“We need long-term solutions now so that the state has a future in creating and keeping jobs,” Mazze said. “Right now we have state programs that are going nowhere but look good politically. The state's economic progress must be measured in reducing unemployment and underemployment no and resolving state and local financial problems.”
