Revitalization in Providence has changed the character of the local job market, allowing the city to transition from a manufacturing-based to a service-oriented economy. But these economic advances have also left some workers behind.
According to a report from the Poverty Institute, a research organization affiliated with Rhode Island College's School of Social Work, the state gained 37,200 net new jobs between 1990 and 2004 despite a significant reduction in the number of manufacturing jobs. But the shift away from manufacturing has increased the gap between those at the top and bottom of the earnings scale by decreasing the quality of jobs available for unskilled or low-skilled workers.
Rachel Miller, director of Rhode Island Jobs for Justice, said the lower quality of available jobs reveals the "other side" of Providence's so-called renaissance. "If the development we're promoting is creating minimum-wage service jobs, that is not helping the city of Providence," she said.
Many of the lost manufacturing jobs were "better paying, often union, family-wage jobs," Miller said. A significant factor in the exodus of manufacturing from the state was the ratification of the North American Free Trade Agreement in 1994, which cost Rhode Island a higher percentage of jobs than 44 other states, according to the Poverty Institute.
The service sector is the "biggest growing industry in Rhode Island right now" and has a large and "fast-growing" presence in downtown Providence, Miller said. A very low percentage of service-sector workers are unionized, Miller said, a fact that can be partially attributed to what she called a "multi-million dollar union-busting industry."
Miller said Providence workers would also benefit from enforcement of First Source legislation, which requires jobs contracted by the city and paid for with tax dollars to be offered to unemployed local workers first before being contracted out-of-state.
Dan Baudouin, director of the nonprofit Providence Foundation, an arm of the Greater Providence Chamber of Commerce, said "for the last 10 years the city has ... been stable in terms of" the number of jobs. In recent years, the main growth areas have been education and medicine, along with hospitality and retail. This latter area gained a significant boost when Providence Place Mall opened in 1999. Financial services also make up an important part of the economy, but this area has "basically stayed flat," he said.
Beth Collins, research director for the Rhode Island Economic Policy Council, wrote in an e-mail to The Herald, "Providence was gaining employment much faster than the state in several clusters that supported the renaissance from 1990-2000." These sectors include retail, lodging, travel and recreation and eating and drinking establishments.
She also acknowledged that declines in manufacturing "hit Providence hard," and identified Providence's hospitals and colleges as "the major anchors of the Providence economy."
According to the Rhode Island Department of Labor and Training, 27 percent of Rhode Island's manufacturing sector employment was lost between 1992 and 2002. Providence lost 7,719 manufacturing jobs, representing a decline of 44 percent.
State-wide, employment increased by 12.1 percent over the same period of time, led by growth in the service and retail sectors.
The service sector includes the hospitality, recreation, health, personnel supply, automotive repair and legal industries. Providence added 7,531 service sector jobs, a 15.7 percent increase.
Rhode Island's service sector employees earned an annual average wage of $32,390 in 2002, more than $800 less than the state's average private sector wage.
Providence is the Ocean State's leading retail trade employer, adding 5,715 jobs between 1992 and 2002, a 64.3 percent increase. Some of these new jobs are attributable to the construction of Providence Place Mall. Retail, however, is consistently the lowest-paying sector in the state.
Though Providence added 1,356 jobs over the last decade, the city has lost more than 4,700 jobs since private sector employment peaked at 102,111 jobs in 2000.
Change and growth for Providence today
"The future of the city is going to be in the life sciences," said Don Eversley, president of the Providence Economic Development Partnership, a non-profit organization affiliated with the city. He predicts growth in such areas as health care, medical research and biomedical sciences. Eversley said he also anticipates growth in "general technical sectors including communication and communication-related technology." He expects the financial services sector will "continue to be very strong," citing Providence's position as the home of Citizen's Bank and a "major outpost" of Bank of America.
Higher education, currently "probably the biggest employer in the city," will also continue to experience steady growth, Eversley said, with "additional growth in state higher education in the city."
Baudouin said Providence has recently been "seeing job growth throughout the entire city. ... The Downcity revitalization has resulted in an environment that has created jobs," he said. Neighborhood restoration projects have also been effective, especially in historic districts where government support can tip the scales toward making renovation and use of historic buildings an "economically viable" option for profit-seeking companies, he said.
Although the "city's tax rate is well above average," Baudouin said, programs such as loans from the city help create incentives for job-creating companies to locate in Providence, citing the lottery company GTECH. He concluded, Providence's "track record is pretty good in terms of creating jobs, although I think we have the potential for doing a lot better."
