RI on a Spree of Losing Jobs and Giving Up

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Ted Nesi puts Rhode Island’s latest unemployment numbers in the context of Massachusetts and the United States overall and looks for a silver lining in an increase in Rhode Island-based payrolls.  Based purely on the two data points — unemployment rate and payrolls — it would be possible to see positive signs, because payrolls include temporary jobs that might become permanent, and increased unemployment could be a sign that more people are sufficiently hopeful to renew the search for work.

A chart of the total labor force and number of people employed eliminates that possibility, at least in terms of the population’s optimism:

 

Rhode Island Labor Force and Employment, January 2007 to February 2012

 

The starting month of the chart, January 2007, was the month of lowest post-dot-com-boom unemployment.  More notable, though, is that the downward slide of the labor force from December 2011 to February 2012 represents the sixth steepest drop over that time period since January 1976, when the RI Department of Labor’s records begin.  Three months during the winter of 1982 and two months of the dot-com bust beat it, but the total workforce and employment was much greater during both of those periods.  The unemployment rate was 9.5% at that point in the ’80s and 4.2% in 2000.

Moreover, in both cases, the fall-off of the labor force followed earlier quarters of growth.  At this juncture, the most recent quarter that saw an overall increase in the labor force was that ending in May 2010.  If February’s employment number were calculated against the labor force of December, the unemployment rate would be 11.5%; against the labor force of last February, 12%; and against the labor force of January 2007, 13.7%.

As a matter of policy, there’s very little that politicians can do to help Rhode Island turn itself around quickly.  However, short-term improvements can be aided by the sense of the future that public officials engender.  In that regard, any talk of legislation or executive policies that will burden the state’s economy, like the governor’s proposed tax increases and tax-the-rich proposals, is counterproductive.



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