The numbers seem to contradict each other: At $49,511 in 2004-05, Rhode Island’s median household income was 7.5 percent higher than the nation’s median. But Rhode Island’s mean private-sector wage, $37,064 in 2005, was 9.3 percent lower than the national average.
Christopher “Kip” Bergstrom, executive director of the R.I. Economic Policy Council, was struck by that discrepancy in RIPEC’s 2007 Economic Performance Scorecard, and he took it as proof that the state hasn’t done enough when it comes to middle-wage jobs.
“The fact that we have increased median household income without increasing the mean wage suggests that people are working in multiple jobs,” he said. “As you lost middle-wage jobs, folks are having to work multiple jobs to make what they were making in medium-wage jobs.”
The scorecard, titled “Building Prosperity,” focused on Rhode Island’s changing job mix and how it’s reflected in wages, incomes, poverty rates, private-sector job growth, employment rates and the share of Rhode Islanders in high-wage clusters.
Overall, the scorecard rated Rhode Island’s performance “good” in terms of income growth, job growth and jobs in high-wage clusters, and “insufficient” in the other categories.
“One of the things that stands out to me was that Rhode Island was one of the few states with a statistically significant increase in median household income,” Bergstrom said.
But Rhode Island also had an increase in low-wage jobs, he said, and the mean wage, which has stayed almost flat, is now 36 percent below Massachusetts’ mean – “not a good sign.”
In fact, low-wage industries had the most growth in every section of the Boston metropolitan area, the scorecard shows, with a 5-percent increase in Rhode Island, an 8-percent increase in southeastern Massachusetts and a 7-percent increase in New Hampshire.
Middle-wage jobs declined in those other regions and in Worcester County, the report shows, while in Rhode Island, they rose by 0.4 percent.
“We talked about growing the top and holding the middle, but I think we’ve done a better job of growing the top than holding the middle,” Bergstrom said.
That “hollowing out of the middle,” he added, “has been happening all over the country, not just in Rhode Island, but we still have a lot of middle-wage jobs. We had something to hold onto in 2001 and we still do, but between 2001 and now, we’ve continued to suffer losses in middle-wage jobs.”
For annual private job growth, Rhode Island outperformed the Boston region overall from 2001 to 2004, but lost its lead in 2005, the scorecard shows. The state still gained jobs, but at a slower rate.
Yet in high-wage clusters, Rhode Island added about 2,600 jobs while other parts of the Boston metro area lost jobs, the scorecard shows. Rhode Island now has 9.5 percent of the region’s jobs in high-wage industries, up from 8 percent 10 years ago. The scorecard credits this primarily to growth in biotechnology and in company headquarters.
Bergstrom said he believes that the increase in high-paying jobs is one of the reasons for the median household income increase in the state, but “it’s still not where we want it to be.”
That is in part, he said, because the jobs here just don’t pay what they do in Boston. “You look at the jobs Fidelity has in Boston compared to Smithfield, and the Boston jobs are super-high-paying, and here they are a mix of mid- to high-wage,” he said.
Other big concerns include the low level of jobs overall and the rising poverty level. Rhode Island now trails the national average of 88 jobs per 100 residents and Massachusetts’ 94 jobs per 100, with 84 jobs per 100. For the state to match Massachusetts, another 52,000 jobs would have to be created.
“The poverty numbers would say that those folks who don’t have the skills for the high-wage jobs are falling out of the job market or into low-wage jobs,” Bergstrom said. “Those who have the skills are doing fairly well, but those who don’t are falling into poverty.”
Looking ahead, the scorecard highlights two projects that are “creating space for high-quality job growth”: the East Providence waterfront, which the city has targeted for redevelopment and where several projects are already under way; and Baltimore developer Struever Bros. Eccles & Rouse’s American Locomotive Works project in Providence’s Valley neighborhood.
Projects like these, the scorecard notes, “don’t just happen by themselves,” but rather they require initiative by cities and “a developer with a vision” – plus, in many cases, government supports such as the historic tax credit.
The R.I. Economic Policy Council’s 2007 Economic Performance Scorecard can be downloaded at www.ripolicy.org.
