Job growth is not a simple matter

the R.I. Department of Labor and Training recently released figures that showed Rhode Island with the second-largest percentage job growth in 2015 among New England states (behind only Massachusetts).

The growth rate was 1.8 percent, slightly behind the national rate of 1.9 percent but ahead of the overall New England rate of 1.7 percent. The net gain of jobs for the 12-month period was 8,400, on a beginning-of-the-year base of 479,300.

On the surface, these figures seem to indicate slow but steady progress on the job front. The real picture is anything but.

The net job gain is arrived at by subtracting the gross job losses in a given period from the gross job gains. In the most recent figures available from the Federal Reserve Bank of Boston, which run from the second quarter of 2014 through the second quarter of 2015, 125,713 jobs were created in Rhode Island. But since 116,550 jobs were lost in that same period, the net gain for those 15 months was 9,163, a percentage growth of 1.9 percent, still the second-fastest increase behind Massachusetts, but further behind the 2.6 percent national growth rate for the period.

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Looked at another way, the churn rate, that is the total of jobs gained and lost in a given period, averaged about 10 percent for the period. That means that for any given three-month period, one out of every 10 jobs was being created or destroyed. That’s a pretty dynamic number, meaning that in overall terms it would only take two and a half years for the entire workforce to turn over. That is not the case in reality, since many people gain and lose multiple jobs in the time period, but it’s still a very dynamic job scene.

So the next time a modest jobs report is seen as evidence of a static job market in Rhode Island, know that that is not the case. •

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