11.2 Percent Unemployment: Is There Any Hope For RI?
Friday, May 18, 2012
Rhode Island’s unemployment rate has risen to 11.2 percent and it has little hope of dropping below ten percent in the next two years, says Dr. Edward Mazze, Distinguished University Professor of Business Administration at the University of Rhode Island.
According to the latest jobs report issued by the Department of Labor and Training, the 11.2 percent jobless rate for April is more than three points higher than the national average and the exact same as it was last April. Just 494,100 Rhode Islanders are employed, the fewest amount since September 1996.
Mazze said nothing points to the unemployment shrinking significantly until the state begins supporting sectors where job creation is possible.
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“I do not expect the unemployment rate to drop below ten percent until the first quarter of 2014,” Mazze said. “The state needs to support the employment sectors where job creation is possible such as health and education, marine industries, distribution, hospitality and financial services. From 2007 to the present, most of the state's economic initiatives did little to create jobs, attract new companies or retain existing businesses.”
Mazze said the major emphasis must be on the growth of small businesses, which can create jobs immediately. He criticized leadership in the state for not creating a business friendly environment and for not knowing how to support those who want to create jobs.
“Many of the state's current economic development programs including financing have little credibility or interest among business people because they were designed by government officials with little or no business experience,” Mazze said. “The state needs to provide a predictable environment in which to do business. We need to get rid of burdensome and out-of-date regulations, stop trying to change the new tax rates and provide incentives to Rhode Island businesses.”
The rising unemployment figures come in the same week that a video game company that received a $75 million loan guarantee from the state defaulted on a $1.125 million payment due to the Economic Development Corporation (EDC) and then missed payroll.
38 Studios, which was founded by former Red Sox star Curt Schilling, pledged to bring 450 jobs to the Ocean State when it received the loan guarantee in 2010. Now the company is seeking bridge financing simply to remain solvent.
The deteriorating situation at Schilling’s company led EDC executive director Keith Stokes to resign Wednesday evening.
Mazze said policy makers are largely to blame for the state’s dismal employment numbers.
“We also need to make sure we are providing the workforce with the skills needed for the jobs available,” he said. “Government policy-makers do not listen to what the business community wants but listens to what others think the business community needs - and that is why our unemployment rate is as high as it is.”
Dan McGowan can be reached at [email protected]
