The grotesque incongruity of some of the highest per-mile infrastructure spending and some of the worst roads and bridges in the country.
As a general proposition, I find debate about the conditions of different generations — Millennials, GenX, Boomers, etc. — to be not much more than merely amusing. However, a point that David Harsanyi makes in The Federalist touches more broadly on the way a certain sort of coastal elite looks at people’s conditions and rights.
Broadly, Harsanyi acknowledges that Millennials do show slower growth in wealth and delayed achievement of life milestones, but he argues that this is a function of their choices. Indeed, delaying milestones like marriage and home ownership are likely the causes of slower growth in wealth, rather than the effects of it.
However, the interesting point about perspective comes with this:
… millennials aren’t compelled to rent apartments in the middle of the most expensive cities in America. Yet, many are happier living in urban areas than previous generations were. Pew Research found in 2018 that 88 percent of millennials now reside in metropolitan areas. That’s also a choice.
And the urban areas that millennials choose are more expensive partly because they are far better iterations of cities than previous generations encountered. In the past 30 years, these places have undergone waves of gentrification and revival, in part to cater to the tastes of younger Americans. Most are cleaner, safer, and more livable in numerous ways—and thus, more pricey. Yes, Brooklyn was a lot cheaper in the 1970s, 1980s, and 1990s. It was also more dangerous, dirtier, and less enticing for families and businesses.
True, Harsanyi grants, half-million-dollar “veritable castles” in high-demand suburbs are out of reach for young adults, but starter homes in more reasonable zip codes are not. That’s why we call them “starter homes.”
Of course, this point gets tangled up in the self-contradictory beliefs of modern progressives — for instance, that nobody needs a large house with all the fixin’s, but that anybody who cannot have such a house is unjustly deprived. Just so, the insinuation on behalf of Millennials is that they have a right to live the lifestyle that coastal elites consider to be de rigeur and are deprived if they cannot. The hardship of the generation, in other words, is that they cannot afford the things that a traditional lifestyle lived over a at least a decade helps a family to achieve.
Although the number of jobs based in Rhode Island is up and the official unemployment rate is down, trends in employment and in the Jobs & Opportunity Index (JOI) bring warnings rather than hopefulness.
Wow, has our report shaken up the status quo! We have done the research, and we have connected the dots. The number one driver of the Ocean State’s declining population and jobs numbers – the high property taxes we all pay – can now be directly connected to the excessive costs of government, as mandated by government union collective bargaining agreements.
Now, we are asking your support to help us spread the word.
Yes, à la carte, non-standard banking services like check cashing and payday loans can seem predatory, but we have to acknowledge the place they fill if we want to understand why people use them and answer the question of whether they should.
Beyond these extreme financial costs, an even more corrosive impact from this political cronyism is at play. People have lost trust in their government and are fed up with betrayals from lawmakers who have forgotten them, who cater only to special-interest concerns. Lawmakers make it ever-harder for people to take care of their families and reside in Rhode Island.
For these reasons, Rhode Island is not keeping pace with the rest of the nation when it comes to jobs and population growth. After 10 years of perhaps the slowest economic recovery among all states, Rhode Island’s political leaders are failing on their promises to help the average family.
Instead, by heaping more privileges upon those who help get them elected, politicians continue to lose the trust of the people, who are also losing hope for their state. These tragic circumstances have conspired to make it a virtual certainty that the Ocean State will lose a prized U.S. congressional seat after the 2020 national census because of its stagnant population growth.
Rhode Island strangles its families and businesses with taxes and regulations, but often, the sheer unfairness of the system can be the real poison. As a member of the Tiverton Town Council, yesterday I participated in a “business walk” hosted by the Newport County Chamber of Commerce, which involved stopping in to talk with some business owners around town.
Of course, we heard about the problem of taxes, but the subjects that really animated business owners would better be classified as injustice. The cost of government labor was seen not only as a cause of high taxes, but also as a budget imbalance preventing infrastructure improvement. Similarly, the capriciousness of enforcement, with the rules not seeming to apply fairly to every business and changing depending on which government inspector paid a visit, is irksome beyond the cost.
Even after figuring out how to overcome all the regulatory obstacles that the state throws in their way and even after building high taxes, regulation-driven energy costs, and government bungled healthcare expenses into their business models, they still never know when an inspector will find some new rule to enforce or the legislature will come up with some new fee or obstacle to impose.
Time will tell whether I’m wrong, but I’m not sure the warning in Patrick Anderson’s Providence Journal article about RI employment last week was sufficiently vehement:
A sudden plunge in the number of Rhode Island-based jobs over the winter has caused fiscal analysts to darken their outlook for the state’s economy in the coming year, but they are not expecting a major downturn.
In March, state and federal officials decided they had overcounted the number of jobs in the state at the end of last year by 7,300 positions. Then, in the first three months of this year, Rhode Island shed another 2,800 jobs, putting it 10,100 jobs shy of the record employment high water mark celebrated last December.
Economists and state labor officials are a little puzzled by the job losses.
Regarding the drop in the first quarter, one quoted economist, Michael Lynch, notes that the sector leading the losses was “administrative support/waste management services,” which includes “office administration, hiring and placing of personnel, document preparation and similar clerical services, solicitation, collection, security and surveillance services, cleaning, and waste disposal services.” Inasmuch as the losses come in a single sector and there have been no massive layoffs to explain the drop, Lynch ascribes the trend to “noise in the data.”
We’ll see. Another possibility is that, despite the national growth, Rhode Island’s economy isn’t supporting a particular sector, for some reason. In this case, that sector is the one that operates offices and helps companies grow. If it is unique in having lost jobs, it may be that Rhode Island is uniquely a bad location from which to operate a business and capitalize on broad growth.
Democrat Governor Gina Raimondo’s dismissive response that “those adjustments are pretty typical of what happens at the end of every year” is alarming in its own right. The revisions to employment data each year reflect the fact that the state’s economy is doing something that economists didn’t expect. If the economy had truly been as strong as Raimondo claimed while campaigning for reelection, the revision would have been up. Instead, economists are surprised and mystified by how poorly our state is doing under her leadership.
They shouldn’t be.
Dr. Dennis Sheehan and I had the pleasure of appearing in-studio with Mike Collins and Chris Maxwell this past Saturday for their WPRO show, Changing Gears, to talk about the report that we co-authored for the RI Center for Freedom & Prosperity about the excess costs of state and local government attributable to collective bargaining with labor unions.
With the third highest property taxes in the country, a major encumbrance within an overall anti-taxpayer and anti-business climate that has dropped Rhode Island into bottom-10 rankings in a number of critical national indexes, the excessive costs of collectively bargained government services can be directly linked to this statewide problem.
Although the state’s rank stayed the same, this month was not a good month for the state on the Center’s Jobs & Opportunity Index. Rhode Island remains last in New England at 47th place in the country. Employment was down another 521 people from the first-reported number for February, and the labor force dropped 1,234.
Why would the General Assembly ram through labor union gimmes, skirting legislative and ethical rules?
A week ago, Providence Journal reporter Katherine Gregg tweeted out that the state’s revenue was under performing by about 7%:
Note two things. First, if not for the application of sales taxes to new items, especially online, and an increase in the various fees and such that make up “departmental receipts,” the picture would be significantly worse. Second, about half of the shortfall is attributable to unexpectedly low income taxes.
This is fully in keeping with the latest Jobs & Opportunity Index report from the RI Center for Freedom & Prosperity, which found that Rhode Island is uniquely lagging the country in residents’ personal income growth. In fact, we were the only state to lose personal income between the latest report from the Bureau of Economic Analysis and the originally reported numbers for the prior quarter.
Combine that fact with a downturn in employment in the Ocean State, and we’ve got a clear warning sign that we need to change direction. Unfortunately, our governor is busy pushing progressive social-welfare policy while the General Assembly is hurrying to grab the unions everything they can before the next downturn.
That last note kind of makes one wonder what the legislators know that the rest of us don’t. If they are expecting another recession in Rhode Island, that would be the time to lock in as much as they can for their friends in the labor unions.
Rhode Island’s employment is diverging with other states in its trend and continuing downward in a very worrying way.
In terms of politics, it seems to me that the trend is the key question with news like this:
According to Bloomberg’s U.S. State Innovation Index, California and Massachusetts are ranked first and second respectively, but Rhode Island was in steep decline over the past three years.
Rhode Island is ranked 23rd in the 2019 ranking — far behind Connecticut which is ranked fourth. Most concerning is that Rhode Island fell seven positions in the ranking from the 2016 Index — the last time Bloomberg released the Index for innovation.
Now, Rhode Island is the second lowest ranked in New England — only Maine is ranked lower at #41.
This is the opposite of what ought to be happening if we have a governor who prioritizes and understands innovation. We’ve long been able to observe as job and employment growth has slowed under Governor Gina Raimondo, and it’s turned into job and employment loss. Now, even contrived ratings for innovation are showing a decrease in strength in a metric that the governor ought to be able to present as contrary evidence to the broader employment data if her method of economic development worked.
Read further down the GoLocalProv article linked above, and you’ll see the usual talk from government insiders presenting all the wrong metrics. It’s always about how much money the government is managing to spend.
Raimondo somehow managed to get herself reelected, so Rhode Islanders shouldn’t expect much change in execution over the next four years. The General Assembly, for its part, has been mainly intent on showing its fealty to organized labor.
Looking out over the landscape, the most depressing deficit is the lack of somebody to be a leading light of opposition. In a system doing this poorly, people ought to be emerging in unexpected places to provide the right answers to a growing population of malcontents. Where are they?
Happy Easter from everyone at the Center to you and your family! We hope you had a great holiday weekend.
We wish we had better news to deliver. Unfortunately, the employment situation in Rhode Island is getting worse, bucking the national trend. While state politicians crow each year about not implementing broad new taxes, the unfortunate truth is that by nickle-and-diming residents and by not implementing aggressive reforms Rhode Island will continue to lose ground, nationally.
One common suggestion for those who wish to be aware of current events and engage in civil dialogue is that they should seek out alternate opinions and actually listen to the other side. This practice does create a deeper understanding, but deeper understanding doesn’t necessarily bring a softening of reactions. That was my thought while listening to former long-time PR guy for Democrat Governor Gina Raimondo, Michael Raia, on the Bartholomewtown Podcast.
Listening to Raia talk about opportunities for our state and region, I couldn’t help but feel my impressions of the Raimondo administration affirmed and my concern about its type of thinking amplified. The listener can hear how confident Raia is that he’s got the region all figured out, as if a society is just a puzzle for which placement of the correct pieces provides the solution.
Whether it’s the operation of businesses and the economy, the development and modification of the infrastructure, the operations of the healthcare system, or the quality of life of particular demographic groups, like senior citizens, one gets the impression that Raia has a firm belief that he and other go-getter experts can think it all through, plan it all out, wind it all up, and set the great society in motion. Unfortunately, the human community doesn’t work like that.
Intelligent as they may be, the Raias and Raimondos aren’t smart enough to plan a society even if everybody wanted to live in neighborhoods like the ones they prefer and spend their senior years playing pickleball. Such an accomplishment would require infinite expertise and a God-like perspective.
The fact of the matter, though, is that most other people do not share the tastes of what Charles Murray called “the new upper class” in his book Coming Apart, and those people have a right not to have their societal preferences bulldozed aside by a powerful government. Moreover, as Murray explains, the ethos of that new upper class is destructive of society in the long run.
Even in the immediate, direct trends of the economy, we can observe the economic sluggishness since Governor Raimondo took office, which suggests that her approach does not work. In February, Rhode Island was the only state in the country that had fewer jobs than it did a year before. Yet, one hears no trace of doubt in Raia’s voice that maybe (just maybe) crafting a society isn’t so easy.
Who does the Rhode Island General Assembly really work for? Too often, the people of our state are left voiceless as special interest dominate the conversation. Recently, the Ocean State Current broke a major story that ignited media coverage across the state. In H5662 and Whom Rhode Island Representatives Represent, Research Director Justin Katz, uncovers a key admission from the political class.
During the March 11th Tiverton Town Council meeting, a member of the General Assembly admitted that he put forward the bill at the request of Speaker of the House, without regard to the cost to the town he represents for the state firefighters union.
Don’t wait, you can catch the video on the Current by clicking the link here. You can also find the followup here.
In the coming weeks, the Center will be releasing a major report on the cost of collective bargaining in the Ocean State. This will be the longest and most in-depth research project the Center has ever undertaken on any topic. We invite you to be on the lookout for this critical report.
I’ve got an op-ed in today’s Washington Times, about Rhode Island’s own connection with the college-entrance bribery scandal:
When Rhode Islanders heard that the women’s tennis coach of the state’s public university had been arrested in connection with the national bribery for admission scandal, many must have said, “Wait, what?” Students can get an excellent education at the University of Rhode Island, and it’s certainly an affordable option, but it isn’t exactly an institution for which the nation’s rich and famous would have to pay the sort of premium that might attract the FBI’s attention.
When they learned the details, locals’ reaction was probably something more like, “How very Rhode Island.”
This paragraph is probably the key takeaway for Rhode Islanders:
Rhode Island’s leaders are like the parents who’ve bribed their children’s way into institutions of higher education that were well beyond their merit. Both cases exhibit an implicit insecurity and a desire for people under their care or authority to be something they’re not. In contrast, the initial questions that political leaders and parents ask should be: Who are you really, and how can you achieve your full potential, being who you are? With that more-human perspective as the starting point, parents might not set their children up for embarrassing failure (or criminal prosecution).
Read the whole thing, as they say.
The state of the State of Rhode Island is not competitive. Even as the rising national economic tide has lifted ships in all states, when compared with the rest of the nation, our Ocean State is severely lagging, and is in danger of sinking further behind if progressive policies continue to be implemented.
However, things do not have to be this way.
Jeff Rose has an interesting article on Forbes.com calculating the take-home value of a $200,000 income in all 50 states. Such a review requires assumptions and broad strokes, but the attempt is interesting.
Naturally, Rhode Island is in the bottom 8, with the theoretical person taking home $140,500 after taxes, or a 30% effective tax rate. That ties the Ocean State with New Jersey and is worse only than Connecticut, Minnesota, Maine, Vermont, Hawaii, and (at the bottom of the list) New York. At the other end of the ranking is Delaware, with $149,500, or an effective 25% rate.
Therein lies the key point. Sure, folks will have a hard time feeling bad for those with such high incomes, but when they can give themselves up to a 6% raise simply by relocating, we should expect that many of them will try to do so.
That likelihood raises a related topic. These rankings are purely tax burdens. Different states have different costs of living, too. If you’re living in Providence, your cost of living is 22% higher than the national average, according to Payscale.com. Dover, Delaware, by contrast, is 3% lower than the national average. That’s a 25% swing.
Readers can play around with the tools to look at the states that Rhode Islanders often mention when they daydream about leaving. Raleigh, North Carolina, is 6% below the national average for cost of living. Nashville, Tennessee, is 4% below. Here’s the table that Payscale.com generates for comparisons:
Rhode Island doesn’t need new gimmicks or more corporate cronyism to turn itself around. We need to recognize and respond to this core problem of making it too expensive to live here, with too little opportunity to show for it. More and more, it seems that we pay a tax premium merely to enable government employees and other insiders to make up for our high cost of living.
Written testimony from the RI Center for Freedom & Prosperity’s CEO, Mike Stenhouse, opposing an increase in the minimum wage emphasizes that such legislation kills jobs:
After Seattle passed a rapid minimum wage hike, a study by the Univ. of WA found the cost to low-wage workers outweighed the benefits by a 3-1 ratio, and found that on average overall, low-wage workers, lost $125 per month – because of lost work hours, lost employment, or lost job opportunities because of the hike.
In Boston, high minimum wages have been publicly cited as a primary reason for many restaurant closings.
Writing on PJ Media, Stephen Green notes that the contagion has hit New York City:
Which brings us back to the NY Post, where an industry group was quoted saying that “full-service restaurants recorded a 1.6 percent job loss [in 2018], which is the first recorded annual loss in two decades.” The new minimum wage hadn’t kicked in yet, but fast-food and fast-casual restaurants were already rushing to automate in anticipation, and this year looks to be even worse
Green also shares this helpfully explanatory cartoon:
It’s been out for a few months, so readers who frequent this sort of Web site may have already come across WalletHub’s ranking of the “Best States to Retire,” which places Rhode Island 49th, better only than Kentucky. What does the Ocean State in is the combination of low affordability and low quality of life for seniors.
That latter point is what caught my eye this week in Adriana Belmonte’s summary of the ranking for Yahoo Finance:
Colorado and New Hampshire’s spots jumped out to [WalletHub analyst Jill Gonzalez], as well. New Hampshire has the lowest property crime rate, and is the fourth-best state overall.
“While they aren’t exactly the most affordable, these states ranked among the best to retire to,” Gonzalez said, noting both states’ high-quality health care and physicians per capita. “This is because they both have a low risk of social isolation, as well as a low share of the population aged 65+ in poverty.”
New Hampshire is 3rd for “quality of life,” which includes a variety of entertainment and leisure items (like “scenic byways” and “museums per capita”), as well as crime rates. The subcategory also includes “risk of social isolation,” measured as follows:
This metric considers the following six risk factors of social isolation in population aged 65 years and older: a) Divorced, separated or widowed; b) Never married; c) Poverty; d) Disability; e) Independent Living Difficulty and f) Living alone.
That’s a cultural thing, and it points to a traditional view of life. If you divorce or never get married, you have a higher risk of being alone. Likewise (although it doesn’t appear that WalletHub measured this) if you never had children or if your children had to move somewhere else in order to find work, your risk of isolation goes up.
We most certainly shouldn’t compound the tragic events in people’s lives with unnecessary ridicule and stigma, but we’ve tended to forget an important point: Traditional values are traditional for a reason. They were learned over the course of centuries, not (as the ideological scions of Marx would have it) because they served some patriarchy or ruling elite, but because they made people’s lives better. They also provided the foundation for freedom and for social advancement, which means losing our traditional values will actually bring us back toward rule by others.
In that regard, it is a telling coincidence that New Hampshire’s motto is “Live Free or Die.”
On March 19, the federal district court in Providence dismissed the American Trucking Associations’ lawsuit against Rhode Island’s truck-only tolls, heeding the State of Rhode Island’s legal argument that their truck-only tolls are not a federal but a state matter and within the state’s purview to assess because they are actually taxes. (Wait, what?? Since when? From the beginning and all through the toll battle, Governor Gina Raimondo and state leaders repeatedly told us that tolls are a “fee”, a “user fee“, an apple – anything but a tax.)
At that point, the ATA had two choices: file the suit in state court or move to keep the suit at the federal level by appealing the decision. They just issued a statement indicating that they have chosen the latter course, stating, in part
Yesterday, the American Trucking Associations, along with three motor carriers representing the industry, appealed last week’s decision by the federal district court in Rhode Island to dismiss their challenge to Rhode Island’s RhodeWorks truck-only toll scheme, on procedural grounds.
In its challenge, ATA contends that Rhode Island’s truck-only toll scheme is unconstitutional because it discriminates against interstate trucking companies and impedes the flow of interstate commerce. In its March 19, 2019 decision dismissing the case, the district court did not address the merits of that constitutional claim. Instead, it held only that ATA’s challenge could not proceed in federal court.
ATA President and CEO Chris Spear went on to underscore, “…we look forward to establishing the unconstitutionality of Rhode Island’s discriminatory tolls on the merits.”
[Monique has been a contributor to the Ocean State Current and Anchor Rising for over ten years, was volunteer spokesperson for the citizens advocacy anti-toll group StopTollsRI.com for three+ years and began working for the Rhode Island Trucking Association as a staff member in September of 2017.]
With a painful downward revision behind the Ocean State, its employment and jobs numbers began dropping in earnest as the country generally edges toward further employment.
On Monday, I pointed out that Rhode Island’s elected leaders should at least be concerned about the possibility that progressive impositions on Rhode Island businesses — like the paid-time-off mandate — might be hurting our jobs and employment market. Well, now there’s this:
Rhode Island business groups are asking state lawmakers not to emulate Massachusetts’ tax on companies whose workers receive public health insurance, saying it has had “devastating” and “nightmarish” economic consequences there.
Grocers, home-care providers, restaurant chains and some hospitals are among the business interests fighting the plan in Gov. Gina Raimondo’s budget to charge companies with at least 300 employees a 10-percent fee on the wages of Medicaid-enrolled workers. The budget expects to collect $15.6 million next year and $19.5 million each year after that from the charge.
“Some of our members in Massachusetts are hearing horror stories,” Lenette Forry, lobbying for the Northern Rhode Island Chamber of Commerce and Rhode Island Hospital Association, told Rhode Island lawmakers Tuesday night.
Raimondo’s contrary argument is not persuasive. She says that the state’s provision of Medicaid helps the businesses, so they should pick up some of the tab. More than anything, this is an indication of the rolling consequences of bad policy.
Progressive officials pushed the policies making taxpayers liable for the health care of able-bodied people with lower incomes. Progressive officials spent all kinds of money on an online health insurance system that shuffles people automatically into free-to-them Medicaid, even when they were willing to pay for individual plans. Progressive officials spent and millions advertising and drawing people toward it. Progressive officials overestimated how many paying customers they’d have and underestimated how many people would be added to Medicaid. So now progressive officials are looking for a villain whom they can stick with the bill.
The thing is, businesses exist to make money for the people who own and operate them. The more expense government layers on the balance sheet, the harder it is to accomplish that goal. When it stops making sense to run the business, or at least to run it in Rhode Island, businesses will just stop doing it.
That’s where we’re going, and it’s going to be a disaster.
A couple of weeks ago, the Wall Street Journal published a letter by a Rhode Islander who stated that “seven of 10 members of my small-business study group are moving their businesses to Massachusetts as a result of a seriously flawed paid-leave bill the governor signed last year.” Over the weekend, somebody from out of state asked me about the policy, which the Dept. of Labor an Training explains in a fact sheet on its Web site.
Thinking about the matter, the most recent jobs and employment report came to mind, wherein a painful downward revision of past numbers joined with foreboding downward trends for January. That trend continued in February, and we’ll give further detail on that shortly.
The key point for the moment is that Rhode Island’s economy didn’t do as well as analysts had thought during the latter half of 2018, and we’re now bucking national trends and backsliding. What if the paid-sick-leave bill is as damaging across the state as the letter writer described in that one small-business group?
The following chart shows the changes in employment and RI-based jobs through 2018 and up to February’s release.
This cursory presentation is insufficient to prove that progressive policies like mandated paid sick leave have an immediate and detrimental effect on Rhode Islanders’ ability to find work. The chart is striking enough, though, that we ought to at least pause before layering on more such policies — enacted by people who do not understand economics and who impose their whims on Rhode Islanders without even basic consideration of what their emotion-driven governance might do to people when the fantasy becomes reality.
Businesses should be applauded for hiring those most in need of work…not punished with more taxes, and certainly not made out to be the bad guy. It is misguided to think that if employees are not covered by their employer’s insurance plan, full or part time, and instead are enrolled in Medicaid, then the business should be punished.
The Center of the American Experiment has done a comprehensive study finding that a 50% renewable goal is simply not a feasible goal for Minnesota, and the center’s president, John Hinderaker, summarizes some of the findings on PowerLine. Basically, the technology isn’t there, and the costs aren’t reasonable, considering that:
Greenies will tell us, of course, that $80.2 billion, a declining economy and tens of thousands of jobs lost are a small price to pay to save the planet. But in fact, the reduction in CO2 emissions would be infinitesimal. Using the Obama administration’s highly questionable assumptions, achieving the 50% renewable target would reduce the Earth’s average temperature by 0.0006 degree Centigrade by 2100–an amount that is far too small to detect with even the most sophisticated equipment.
Liberals don’t actually believe that global warming caused by human CO2 emissions is an “existential threat” to mankind, as they like to say. If they really believed it, they would be campaigning to invade China and India, or to bomb their hundreds (if not thousands) of coal-fired power plants from the air. But I think that we can all agree that reducing global temperatures by 0.0006 of one degree isn’t saving anything.
Of course, if climate change really were the target of these policies — rather than less existential considerations like virtue signalling, socialism, and crony capitalism — advocates would be advocating to get the West over its fear of nuclear power. (Although, we should make some allowance, on this count, because even if it would solve the problem, cult-like environmentalists tend to see nuclear technology as a Dark Power in opposition to the Light Power of wind and sun and trees and furry animals.)
Be that as it may, readers would do well to read through Hinderaker’s list of findings, if only for the reminder that these adventures in green virtue really do have harmful effects on economies and families.
Existing state law (General Law 44-18-18) specifies a “trigger” for a sales tax rate reduction to 6.5% (from its current level of 7.0%!) if certain internet sales tax collection criteria are met. The rationale for this law was to relieve Rhode Islanders of the additional burden of imposing a sales tax on a broader range of purchased goods, by easing the tax.