Although total job losses in Rhode Island appear to have ebbed, the state’s manufacturing sector continues to lose jobs at a rapid pace, according to state labor statistics.
The manufacturing industry lost about 7 percent of its employment base during the first quarter of this year, vs. the same period from 2001 – among the steepest rates on record, according to Gary Ciminero, an economist and acting director of the Rhode Island House Policy Office. He noted the drop in Rhode Island’s manufacturing employment during a regional economic conference in Connecticut earlier this month.
"Manufacturing employment has been trending downward about 7 percent for the last several months, and the last time it’s been that weak was in the midst of the recession in 1991," Ciminero said. "I think the most surprising thing is that we’re not even in a recession at this point."
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Ciminero said he compared seasonally adjusted manufacturing employment from the first quarter this year to the first quarter of 2001, using monthly data from the Department of Labor and Training.
The state averaged 72,700 manufacturing jobs during the first three months of 2001, and dropped to an average of 67,500 during the first quarter of this year. A few sectors lost jobs at a particularly sharp rate, including machinery (excluding electrical), down 18.7 percent, fabricated metals off 12.4 percent, and textiles, which lost 10 percent.
The first-quarter employment data, however, could be revised by the Bureau of Labor Statistics, which generates federal employment data using unemployment-tax figures filed by private companies. Federal statistics from Rhode Island’s first quarter won’t be available for several months, according to the state DLT.
If there’s a silver lining in the bleak employment numbers, it’s that many of the job losses are coming in lower-paying manufacturing sectors, economists said.
"The job losses have been concentrated in below-average-wage industries," said Leonard Lardaro, a professor of economics at the University of Rhode Island who tracks the state’s economy. "One can infer that a lot of these low-end manufacturers have been forced to upgrade productivity, and that often includes cutbacks in low-end jobs."
Lardaro said the continued slide in manufacturing jobs shouldn’t come as a surprise, even though Rhode Island’s overall job market is stabilizing. He said the manufacturing sector has been losing jobs every year since 1984, when the industry employed more than 120,000 workers. The industry had 67,600 as of March, according to DLT.
"It’s not the end of the world," Lardaro said. "A lot of this is structural change. The low-end of the manufacturing sector is redefining itself, and short-term pain will translate to long-term gain."
Still, that likely won’t do much to console struggling manufacturers – or laid-off workers – who see no relief in sight.
"Everyone is complaining about the situation," said John J. Grady, executive director of the Rhode Island Manufacturers Association. "It’s staggering when you consider that the state’s manufacturing sector has lost more than 50,000 jobs in the past 15 years."
Grady says the onus is on manufacturers to be flexible and implement the necessary upgrades to stay competitive, but he said that won’t be enough without state support for the manufacturing industry. The association is drafting tax legislation it plans to submit next year, which Grady said will be "the biggest tax package ever introduced."
"We’re not getting enough support from the legislature," Grady said. "Manufacturers need to think out of the box and be progressive in this environment, but the environment needs to change too."
