April 2019 Employment: Down in Employment and in JOI

The April employment report for Rhode Island was mixed.  Once again, the official unemployment rate dropped, to 3.7%, but once again, the reason was that more people stopped looking for work than lost their jobs.

The following chart illustrates the trend.  The blue line, showing employment, shows gradual loss, but the red line, showing the total size of the labor force, flopped.



The point is made further by the following chart, which shows the official unemployment rate (blue line) in contrast with what the employment rate would have been had the labor force remained constant since the beginning of the Great Recession (red line).  The widening gap is a function of losing labor force at a faster pace than losing employment.  The unemployment rate suggested by the red line would be 7.3%.



The following chart puts Rhode Island’s employment and labor force trends in comparison with those of Massachusetts and Connecticut.  In contrast with recent months, the Ocean State’s neighbors also saw declines in both lines, if only slightly.



Nationally, however, Rhode Island was not joined in misery.  Only fourteen states saw employment decreases, and as the following chart shows, Rhode Island remains one of only a few that haven’t regained all employment lost during the recession and, in fact, is among the bottom 3 by this measure.



The bright spot of this month’s report is that jobs based in the state were up significantly.  How that number, represented by the light area in the following chart, could contrast so highly with the employment number, represented by the dark area, is not possible to say definitively.  Of course, the employment numbers, which are based on a survey, could be off.  However, the same result would also arise if people from other states were taking jobs in Rhode Island, or if more people were working multiple part-time jobs.  The latter has some evidence in the fact that new numbers used in the RI Center for Freedom & Prosperity’s Jobs & Opportunity Index (JOI) report show an increase in Rhode Islanders who say they are involuntarily working only part-time.



More reason for concern arises from the corresponding JOI report, which takes into account 12 data points, including these employment and jobs numbers as well as income, taxes, and welfare.  In the month of April, Rhode Island slipped back to 48th place in the country, from which it had escaped by displacing Louisiana in 2017.  That southern state has now returned RI to the position that it held for most of the decade.

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