New Data Shows RI’s Economy Is Collapsing in Key Sectors, While Small Biz Await Plan From Raimondo
Monday, July 13, 2020
New data shows that key sectors of Rhode Island’s economy are collapsing and dramatically trail the rest of New England and the country due to the impact of the coronavirus.
Rhode Island's two largest sectors -- healthcare and hospitality -- are in free fall.
The arts and entertainment sector has been devasted across the country and in New England, but worse in Rhode Island.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTAnd, the grocery section — one of the bright spots in the economy — is even down in Rhode Island.
The data was developed by Opportunity Insights, a collaborative effort by MIT and Harvard and Brown University researchers which looks at the impact of the coronavirus on multiple business sectors.
According to the numbers, Rhode Island is significantly underperforming the rest of the country.
Battle Between Governor and Lt. Governor Over Small Business Relief
In Rhode Island, thousands of Rhode Island small businesses have signed a petition calling on Governor Gina Raimondo to release $125 million of the $1.25 billion in federal CARES Act funds to support small businesses.
The release of the $125 million in federal funds has been championed by Democratic Lt. Governor Dan McKee. There has been an ongoing battle between McKee and Raimondo as to the approach to support small businesses. McKee says Raimondo's delays have been devastating.
“Our small businesses need a lifeline and they need it now,” said McKee. “Over the past few weeks, we’ve brought hundreds of small business owners together to urge the state to create a small business grant program using federal CARES Act funds. The governor’s response this week is a step in the right direction, but the work isn’t done yet. The state’s grant program must allocate a meaningful amount of funds to the small business community—at least 10 percent the $1.25 billion. Small businesses delivered the petition today to ensure their voices are heard in the creation of the state’s grant program; their input is critical.”
Raimondo had opposed the release of the CARES funds to support small businesses, but last week pivoted and announced that this coming Wednesday she will be announcing a new small business program — no details have been released and it is not expected to be even close to the $125 million McKee is urging to be tapped.
Healthcare Pummeled in RI
Healthcare as of July 1, 2020 is down 55.3% versus the January 1 of this year. In contrast, Massachusetts is only down 12.8% and Connecticut is only down 8%
The healthcare industry cluster employs 67,281 workers in Rhode Island with an average annual wage of $50,806, according to 2019 data by the RI Department of Labor and Training.
The U.S. healthcare industry is down only 0.6% according to the data.
Raimondo has directed $150 million in CARES funds to support the Rhode Island hospital system, and is expected to make more healthcare announcements this week.
Restaurants Down Nearly 50%
According to the data from Opportunity Insights, the restaurant industry in Rhode Island has been the hardest hit. Nationally, the sector is down 33.8%, but Rhode Island is down more than 44% below the national average, being down 49.9%.
In Rhode Island, the leisure and hospitality cluster employs 58,267 workers in the state with an average annual wage of $22,339, according to DLT.
Groceries Up in Nearly Every State Except RI
During the coronavirus pandemic, consumers have been forced to eat more at home, as restaurants and work and school cafeterias have been closed for weeks and in some cases months.
Across the country, grocery spending is up 8.2% - but Rhode Island is one of only two states in the country in which spending is down on groceries -- Rhode Island is down 3.3%.
Legislature: GOP Calling for Small Business Help and Democrats Quiet
Republican legislators have also called for the release of the $125 million in addition to McKee.
Dozens of long-standing Rhode Island businesses have already closed their doors due to the financial strains the COVID restrictions placed on small and micro business operations.
“It is unconscionable that the Governor would hold back these designated relief funds from small business owners who desperately need the help now,” said House Republican Leader Blake Filippi. “We promise to do everything in our power to get this funding out to our small business community – with the goal of giving a much-needed boost to our economy.”
“The stress of being ignored by our Government leaders, first by only allowing box stores to maintain their businesses during the pandemic shutdown, and now, the burden of trying to stay afloat during partial openings, is beyond belief for any business owner,” said Representative Robert Quattrocchi, a former owner of multiple small businesses in the State of Rhode Island. “Small and micro businesses employ over 200,000 Rhode Islanders – we are in big trouble if these businesses are not sustained. We are proud to join the Lt. Governor’s effort to recognize this need in our struggling economy.”
There have been no statements from Speaker Nick Mattiello or Senate President Dominick Ruggerio on McKee's plan.
