PROVIDENCE – Rhode Island’s employment growth has lagged behind the rest of the nation following the Great Recession and, according to the Bureau of Labor Statistics, it is primarily due to the performance of the state’s health care and education sector.
Overall, the number of jobs in Rhode Island grew 5.1 percent from June 2009 to June 2016, to 482,709 from 459,429. Employment growth across the United States was 10.1 percent, as the national job count hit 142,780,371.
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The BLS’ September Beyond the Numbers report showed that the education and health services sector employment trends diverged from a national upswing, declining from June 2009 to June 2016 by 0.2 percent, or 230 jobs, while the nation experienced a 10.5 percent upswing in sector employment, adding 3.1 million jobs in the period.
This was, in part, due to the high concentration of college and university employment and hospital employment in comparison to the rest of the nation, according to the report. For instance, if the education and health services sector had performed as well as the national average, the sector would have added more than 13,000 jobs from 2009 to 2016 instead of losing 230. This would have increased the statewide job growth rate to 8 percent in that time, compared with the 10.1 percent national rate.
Based on what the BLS terms a metric location quotient, the education and health services sector accounts for a higher percentage of the state’s workforce than the national average. Thus, its sub-optimal performance affects Rhode Island’s economy proportionally more than it would have in an average U.S. state economy. In contrast, the natural resources and mining sector location quotient was well below the average distribution in comparison to other sectors in the state, so even though it added jobs above the national rate, the change was inconsequential to the overall state performance.
In health services, Rhode Island’s hospital subsector employment also varied significantly from national trends. Private hospital employment in the Ocean State declined 4.9 percent, or 1,191 jobs, in the seven-year recovery period. Conversely, national private hospital employment grew 6.3 percent. And while private ambulatory health care services employment grew 10.7 percent, or 2,504 jobs, in Rhode Island, across the United States it increased 21.6 percent. Similarly, private social assistance employment locally grew 14.3 percent (1,577 jobs), but 48.1 percent in the entire nation. And even as private nursing and residential care facility employment grew modestly, 0.7 percent (119 jobs), nationally the sector experienced 7.1 percent growth.
In education, Rhode Island also lagged national performance. Public elementary and secondary school employment fell faster than the national average at 11.1 percent, a loss of 2,622 jobs in seven years, compared with the national decline of 3.4 percent. If Rhode Island’s public and private elementary and secondary school employment was in line with the national average, 1,817 fewer jobs would have been lost in the recovery period. In contrast, private employment in elementary and secondary schools increased 17.3 percent, greater than the national growth rate of 16.1 percent.
Public college and university employment declined 0.4 percent during the recovery, as compared with national growth of 3.9 percent. Private college and university employment fell 14.4 percent in Rhode Island, while public employment in the sector increased 3.9 percent. College and university subsector employment had the highest location quotient in the study, showing that the performance of such a sector has an above-average sway on employment totals and trends. Replacing the state performance for both public and private colleges and universities with the national growth rate would have resulted in an additional 2,907 jobs.
The report also examined the effects of below average performance from the trade, transportation and utilities supersector, which grew at 2.1 percent from 2009 to 2016, while the national average growth for the supersector was 9.3 percent. Trade, transportation and utilities was the second largest supersector in the state, but was less concentrated than the national average in Rhode Island, and thus had a smaller potential effect on the state economy.
Manufacturing was the third and final sector that the study indicated diverged from the national average performance in a significant way. Manufacturing employment declined 2.4 percent, or 999 jobs, from 2009-2016, while nationally, manufacturing employment grew 5.3 percent. The BLS report also noted that Rhode Island’s steep decline in employment during the Great Recession was due in large part to losses in the manufacturing sector.
Chris Bergenheim is the PBN web editor.
