Manufacturing layoffs, foreign competition cited as cause
The number of jobs lost in Rhode Island during the first three months of 2004
was up 10 percent from the same time last year, according to the state Department
of Labor and Training.
Approximately 400 of the 22,805 lost jobs were a result of foreign competition.
The total number of jobs lost January through March 2004 was up from last year’s 20,568 jobs lost, according to the department. The industries that experienced the largest losses were in the manufacturing, services and construction businesses, but according to Bob Langlais, assistant director of labor market information for the department, construction and services job losses are mostly seasonal fluctuations that pick up in the summer and holiday seasons.
Even manufacturing suffers from seasonal layoffs – some plants shut down for the summer months, impacting layoff numbers, he said.
“Our unemployment rate (5.7 percent in April) is higher this year than it was last year,” Langlais said. “There were a few more closings, but projections say that in the summer it will pick up again. Most of (the fluctuation) is because of holiday hiring and firing. It’s a pattern every year in Rhode Island and in a lot of other states. Construction is weather-related.”
Manufacturing losses, however, have remained constant. According to mass layoff statistics, Rhode Island lost a total of 16,217 manufacturing jobs in 2003; of those jobs, 4,607 were lost in the first three months of that year. In comparison, during the first three months of 2004, 3,891 jobs were lost, a smaller amount than the previous year.
“We’re bleeding less than we were last year,” said John Cronin, CEO of the R.I. Manufacturing Extension Services. In December 2003, the industry lost 2,389 jobs, or 24 percent of the total job loss.
“We’ve been losing manufacturing jobs here since 1984. There aren’t as many jobs to be lost,” Langlais said. “A lot of the weaker companies have already left and the only ones left are the strong companies. We expect to see a continued gradual decline.”
The labor department defines a “potential mass layoff” in Rhode Island as 35 or more initial claims filed against a single company during a five-week period. Employers identified as having a “potential mass layoff” are contacted by phone to determine the reason for and duration of the layoff, the number of workers involved and recall expectations.
The labor department’s Trade Adjustment Assistance program offers support and training to workers who have lost their jobs as a result of foreign competition. According to Bill Brock, coordinator of the program, 400 jobs is a conservative number, and it doesn’t take into account any workers who didn’t seek help from the department. Twenty companies have signed on to the program, he said.
The overall trend in manufacturing is one of lean manufacturing and increased productivity with fewer workers, but Cronin pointed out that current employment in manufacturing has stayed level this year at around 58,000 workers, according to department employment figures.
“We have companies that are still laying people off and companies that are still hiring,” he said. “We’re seeing a positive trend in progressive manufacturing with more high-skilled jobs. Our concern is that our work force is so much older that it makes our health care costs exorbitant.”
Overall, Rhode Island has been gaining jobs over the years, Langlais said, and while the month-to-month comparison shows losses, the year-to-year comparison outlook is bright. RIMES, Cronin said, is hoping to at least sustain a flat job loss trend, while increasing wages and productivity.
“We’re focusing on creating high-skilled jobs and we want to increase employment, but looking at the trend, we’d be happy to just increase the payroll,” Cronin said. As for foreign competition, it has played a factor in Rhode Island manufacturing.
“Competition creates more urgency for improvements and the overall massive claims were balanced by the small businesses growing by one or two at a time,” he said. “We have to be careful of growth in employment because of price elasticity … but at least we’re maintaining the labor force we started out with at the beginning of the year.”
