Establishing challenges, strategies and goals, the Economic Policy Council is offering its blueprint for “charting Rhode Island’s course to the New Economy.” Suggesting that the “distinguishing features” of Rhode Island’s future economy will be “digital and global,” the council has established six challenges that it expects to present in a series of meetings with business and political leaders, with policy and decision-makers. Christopher “Kip” Bergstrom, council director, said he hopes that dialogue will lead to a series of actions.
Bergstrom said this is the first of what will be an annual assessment and updating of how Rhode Island is meeting the challenges of a new economy, from job growth to smart growth, from globalization to business regulation.
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The six challenges, as outlined by the council are: strengthening global connections; developing industry clusters; controlling regulated business costs; increasing workforce productivity; turning ideas into jobs; and smart growth.
Both Bergstrom and Beth Collins, the council’s research director, said they hope to establish an atmosphere that evokes meaningful discussion, even challenges to the council’s conclusions, but dialogue that ultimately results in initiatives all aimed at increasing family income for Rhode Islanders.
Bergstrom said strategies might mean reallocating resources, rather than seeking new resources to redevelop a program.
While the council sees many areas in which Rhode Island needs to improve and needs to initiate action, Bergstrom said he was also pleased that in many instances programs have been initiated in many areas, with some showing positive results.
Among the areas addressed were:
Earnings from Rhode Island jobs: The report suggests that wages from Rhode Island jobs have been growing slower than both Massachusetts and the U.S. as a whole. Only 58 percent of Rhode Island personal income, the report says, comes from jobs within the state. The rest is from investments, transfer payments or employment outside Rhode Island. The report says to improve the situation, job growth must be concentrated in higher wage jobs.
Number of jobs in Rhode Island: Job growth is an area measured often by economists, and often economists suggest that Rhode Island’s fortunes are tied to those of the U.S. However, the report shows that Rhode Island’s growth rates nearly parallel those of Massachusetts, and differ widely from the U.S. as a whole. The statistics used in the report were developed from data at the state Department of Labor and Training, and other sources.
Full-time employment: The report suggests that while part-time jobs are on the rise in Rhode Island, full-time jobs – those over 35 hours a week – are declining, below figures for 1987.
Working age population: While Rhode Island has reversed its trend of losing population, gains, the report says, are from 2,400 international immigrants that arrive each year, many unskilled. Meanwhile, the report says the state continues to lose working-age adults (18 to 64) who leave the state in search of employment.
Online adults: The percentage of people with Internet access across Rhode Island is 31 percent, equal to the U.S., but below neighboring Massachusetts, at 39 percent. The report says Rhode Island has taken steps to increase Internet access, with all but four public schools in the state now connected to the Internet through RINET. Over the last three years, the Rhode Island Foundation’s Teachers & Technology program trained 2,000 Rhode Island teachers on computer skills. Additionally, the report says that Ocean State Higher Education, Economic Development and Administrative Network (OSHEAN), a consortium of higher education and government, is working to increase the digital infrastructure in RI.
Air Transportation: The report notes the progress at G.F. Green Airport, and the anticipated completion of Warwick Station, extending commuter rail traffic to Green by 2001.
Ocean Freight: The report says that New England’s “future in logistics is in Rhode Island’s hands. Quonset is the only port location in New England which has three critical attributes: close proximity and deep water access to the Atlantic sea lanes: on-dock rail with double stack access to the NAFTA Corridor; and sufficient land for efficient container operation.” It says it is essential that a container port is developed at Quonset that is both “financially feasible and environmental responsible.”
Manufacturing exports: U.S. Manufacturing exports have grown at twice the rate of Rhode Island. Boosting exports, it says, is important to the long-term health of the Rhode Island economy and suggested that the Export Assistance Center at Bryant College, trade missions and efforts by the Rhode Island Economic Development Corp. were helping Rhode Island companies expand export opportunities.
Workers compensation: Costs have steadily decreased since 1993, from 3.93 percent of payroll to 1.7 percent in 1999.
Industrial electricity costs: Electricity is a key cost, with electricity rates for Rhode Island’s industries peaking at more than double the national average in 1997. With restructuring of the electric industry, industrial costs have declined 22 percent, but remain 57 percent above the national rate.
Average Unemployment Insurance Rate: While Rhode Island enacted several changes to the unemployment insurance law in 1997 and 1998 to lower unemployment insurance costs, rates remain nearly double the rates for the U.S. The state has an unemployment insurance task force exploring ways to further reduce the rate.
State income taxes: Rhode Island’s income tax is below the U.S. average and significantly below Massachusetts for most income levels. “Rhode Island imposes very low taxes on the poor, and has one of the highest zero tax brackets, but does not offer a ‘negative income tax’ for very low income taxpayers that is offered ins some states, including Massachusetts. Rhode Island taxes are uncompetitive for high income tax- payers and Rhode Island’s competitive disadvantage increases with income.” Inequities at the top and bottom of the income range were a matter of debate in the 1999 legislative session, but did not result in any legislation.
Workforce education: Rhode Island ranks 38 of 50 for high school attainment, with 19 percent of Rhode Island adults, 25 years of age and older, lacking a high school diploma. That compares to 17 percent nationally. The report also says that 28 percent of Rhode Island adults have a bachelor’s degree or more, which is better than the national figure of 24 percent. The report notes several initiatives that are attempting to introduce technology in schools, reduce the drop-out rate, and establish measurements for meeting certain attainment standards.
Anyone who wishes a copy of the report should contact the council at its offices at 15 Westminster St., Suite 615, Providence, RI 02903.
