More jobs in R.I., but not so much for the middle class
While state leaders on Thursday hailed Rhode Island's jobs recovery from the Great Recession, they acknowledge — and economists caution — it has been fueled in large part by the growth of high-wage and low-wage jobs. Middle-class job recovery is still lagging, they say.
The new jobs in the decade-plus recovery are heavily clustered in two categories, Drexel University economist Paul E. Harrington explains:
- Higher-wage professional, scientific and technical jobs and those labeled "management of companies"; and
- Lower-wage leisure, hospitality and social assistance jobs.
"So the state's become more a state of extremes," Harrington said. "If you say, 'Oh, we have this growing income inequality' — well, here's why."
Because Rhode Island's economy was built on the blue-collar work hit hardest by the recession a decade ago, the state's jobs plummet was among the steepest and longest-lasting in the country, Harrington says. Forty-five percent of all losses hit goods-producing sectors, including manufacturing, construction and other labor-intensive industries.
Those jobs paid the kind of wages that allowed working, married couples to buy a house, save for retirement, give their children opportunities and go on vacation, said Scott Jensen, director of the state Department of Labor and Training.
"That's the American Dream, and these are the people that we need in our economy so much," Jensen said. "That part of the wage category hasn't grown as much."
Although construction has been on the upswing in recent years, that industry still hasn't recovered net jobs lost. Construction lost 6,600 jobs from December 2006 (the prior jobs peak) to August 2009, and the industry still has 2,900 fewer jobs than at the end of 2006.
Manufacturing has only recovered 200 of the 10,800 jobs lost from December 2006 to August 2009.
"No one thinks that our work's done," Jensen said. "This [jobs recovery] was a good moment to stop and say, 'Good. The state's going in the right direction.' And now we've got to keep going in that direction and support it — because there will be more recessions in the United States. ... And the stronger we grow and the more diverse and stronger we are, the better we'll weather the next one."
Addressing the divided wage problem is crucial, Jensen said.
"That middle-skill role ... somebody who's in the middle of the organization who's involved in doing and thinking," he said. "Those people are really hard to find, and that's where our skills gap is."
Gov. Gina Raimondo said her strategy is not about a "Hail Mary pass," but rather blocking and tackling, to create multiple job opportunities and to educate people at different levels.
"People need family-supporting jobs," Raimondo said, and she's concerned there still aren't enough. "That's exactly why we're putting so much emphasis on education and job training."
The administration's Real Jobs Rhode Island program has trained 1,023 job seekers, and 746 of them have gotten jobs. Separately, it has trained 433 employees in current jobs who needed extra training, DLT spokeswoman Laura Hastings said.
The state's Qualified Jobs program has pledged up to $40.2 million in tax credits to 17 companies. In return, those companies pledged to create up to 1,933 jobs, a Journal analysis shows. Because employees must work a full year and pay state income taxes before companies earn tax credits, no company has yet redeemed credits.
The Rhode Island Commerce Corporation estimates the program has so far supported the creation of hundreds of jobs — GE Digital, Johnson & Johnson, United Natural Foods and Ivory Ella have each hired dozens of employees, spokesman Matt Sheaff said.
Nevertheless, University of Rhode Island economics Prof. Leonard Lardaro offers more caution.
Even though the state's labor force has recently grown, it remained 18,155 people fewer in June than during the state's 2006 peak. That counts people working plus those looking for work.
The percentage of the working-age population in the labor force simply hasn't recovered, Lardaro said. In June, it was 64.7 percent — down from its peak, in January 2007, of 68.6 percent.
"Based on employment, Rhode Island is back to its prior peak," Lardaro said. "But based on a host of other statistics ... Rhode Island is not performing as well as the perceptions of many here. We're not back."
Which jobs are fueling Rhode Island's comeback?
The state's recovery is heavily clustered in higher-wage and lower-wage jobs, whose average annual wages pay considerably more or less than the state's average annual wage, which was $51,439 in 2016. Some key examples:
Higher-wage jobs:
Professional, scientific and technical jobs
Average annual wage: $73,489 [143 percent of state's annual average wage]
Share of recovery: About 10 percent of net jobs recovered were in this category
Management of companies
Average annual wage: $119,468 [232 percent of state's annual average wage]
Share of recovery: About 10 percent of net jobs recovered were in this category
Lower-wage jobs:
Leisure and hospitality
Average annual wage: $21,548 [42 percent of state's annual average wage]
Share of recovery: About 22 percent of net jobs recovered were in this category
Social Assistance
Average annual wage: $23,389 [45 percent of state's annual average wage]
Share of recovery: About 9 percent of net jobs recovered were in this category
SOURCES: Data from Current Employment Statistics and Quarterly Census of Employment and Wages, of the U.S. Bureau of Labor Statistics; R.I. Dept. of Labor and Training
ANALYSIS: By Drexel University economist Paul E. Harrington
Correction: An earlier version of this story included incorrect dollar figures and jobs totals for the state's Qualified Jobs program.
— kbramson@providencejournal.com
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