November 2016 Employment: Rhode Islanders Giving Up Again?


The last employment report from the Bureau of Labor Statistics (BLS) released before the close of 2016 raises the question of whether Rhode Islanders are giving up on the state’s economy again.  Sure, the unemployment rate improved by three-tenths of a percent, but the reason was a nearly 1,800-person loss among those working or looking for work.  That large drop suggests that the previous month’s smaller, 295-person one, wasn’t just a minor blip on a generally upward trend.

The first monthly chart illustrates the change.  The labor force is now about where it was in July, and employment is back to its level of late August.


As the following chart shows, if Rhode Island’s labor force hadn’t shrunk in November, its unemployment rate would not have dropped to 5.3%, but would have remained at 8.4%.


The contrast with Connecticut and Massachusetts is disturbing.  Although Rhode Island’s two neighbors have also seen drops in labor force, their employment has continued to climb.  That fact suggests two entirely different stories.  A growing labor force is generally a positive, but when it shrinks despite increasing employment, the problem appears to be some kind of demographic shift or a mismatch in the labor market.  When unemployment drops because the labor force contraction is happening more rapidly than the employment contraction, opportunity is more clearly lacking altogether.


Nationally, Rhode Island continues to wallow at the the bottom, on what might be considered a national floor for the recovery of employment since the Great Recession began.  Essentially, no states are farther than 4% below their peak employment, but Rhode Island is right at that line.  At least the Ocean State nearly has the company of its New England sister, Vermont.


The mild increase in jobs based in Rhode Island (the light area in the following chart) doesn’t do anything to improve the picture.  Indeed, the line continues to give the impression of deceleration of what was already a slow rate of growth.


And once again not surprisingly, Rhode Island failed to budge from its last-place position among New England states on the RI Center for Freedom & Prosperity’s Jobs & Opportunity Index (JOI), which provides a broader assessment of the 50 states’ economic performance, taking into account such factors as income, taxes, and welfare, in addition to jobs and employment.