For Rhode Island residents, the sluggish economy is hitting especially close to home. The nation's smallest state now claims the less-than-coveted position atop the country's unemployment rankings, with an 8.8 percent jobless rate for September.
According to recent data released by the Bureau of Labor Statistics, Rhode Island surpassed Michigan, previously the state with the highest unemployment rate, and reached its highest level in 16 years. Rhode Island's jobless rate increased from 8.6 percent in August to 8.8 percent in September, well above the national unemployment rate of 6.1 percent and significantly above the rest of the New England states.
"Rhode Island is clearly in a crisis," said Leonard Lardaro, a professor of economics at the University of Rhode Island. "We are in a crisis about as severe as the banking crisis in 1991."
In the past month, the number of unemployed rose by about 1,300, increasing the jobless count to about 50,200, according to the State Department of Labor and Training, a trend that Lardaro says he anticipates lasting until May 2009 at the earliest.
Lardaro says that this increase in the state's jobless rate stems from Rhode Island's long-term failure to make technological advances and improve growth-oriented industries. He says these problems result from the continued "dismantling" of higher education in the state.
"We continue to place higher education farther and farther out of the reach of many of our young people," he said.
The economic crisis is taking its greatest toll on manufacturing industries, which have shown a 9 percent decline in total work hours, a downward spiral that Lardaro characterized as "drastic."
In order to reverse this trend, Lardaro says state leaders must clean up the current tax and cost structure by making it more competitive.
He says that there are also problems with the cost of doing business in the state because of fees, regulations and inadequate skills in the labor force.
Rhode Island's steadily increasing unemployment rate foreshadowed the current national economic crisis, Lardaro said.
Employment in the state peaked in January 2007 before the state entered into a recession in August 2007, leading what many U.S. experts fear is current national recession.
Despite the upward unemployment trend, Lardaro criticized the actions of state leaders.
"Everything seems to be going in the wrong direction," he said.
"And if that's not bad enough, our leaders are doing nothing whatsoever to deal with it."
But in a recent press release, Rep. Jim Langevin, D-R.I., urged House Speaker Nancy Pelosi to support a stimulus package that includes unemployment benefits and infrastructure projects that would help to create jobs.
He also advocated assistance to homeowners in light of the recent national mortgage crisis and funding for emergency food assistance.
Langevin said in the release that the current economic condition "has taken a toll on our state's social service centers, food pantries, and homeless shelters," adding that these problems are only going to get worse in the future.
Earlier this year, Langevin voted on a measure that would help jobless Americans by providing 13 additional weeks of unemployment benefits to workers who had already used up their 26 weeks of benefits.
But the measure did not pass in the Senate, leaving Rhode Island without the additional unemployment aid.
Lardaro said he is hopeful that the state's economic situation will improve eventually.
The reversal in the unemployment trend will "have to rely on buoyancy on national and global levels," he said.
"But still we have the noose around our neck of deficits that are going to slow us down."
