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Rhode Island unemployment rate hits 10 percent

07:34 AM EST on Friday, January 23, 2009

By Benjamin N. Gedan

Journal Staff Writer

Rhode Island’s unemployment rate reached 10 percent last month, a symbolic and distressing level of joblessness that signals a deepening recession. It has not been this high since 1975.

The number of Rhode Islanders scouring help-wanted ads rose last month by 3,700, boosting the unemployment rate from 9.3 percent, the highest in New England. There are 56,800 unemployed state residents, according to data released today by the state Department of Labor and Training.

Nationwide, the unemployment rate is 7.2 percent, a 16-year high. Michigan, which has competed with Rhode Island for the dismal distinction of recording the country’s highest jobless rate, saw unemployment soar to 10.6 percent last month.

The Rhode Island tally only includes residents hunting for a job. The segment that has given up the search also appears to be growing. The state’s labor force –– the combination of job holders and job seekers –– dropped 10,500 last year, the biggest decline in three decades.

Only a small portion of that change is attributed to migration. From July 2007 to last July, the state lost only 2,348 residents, according to the U.S. Census Bureau.

Others may have left the work force to return to school, Donna Murray, chief of research and statistics for the Department of Labor and Training, said. But given the severe economic crisis, it is likely that much of the decline reflects an increase in so-called discouraged workers.

Massachusetts is not capable of absorbing this state’s unemployed, having seen its own unemployment rate jump to 6.9 percent from 5.9 percent last month.

Last March, Jason Delifus, 31, of West Warwick, lost his sales position at the Men’s Wearhouse in North Attleboro. With his wife, Toni, 26, also out of work, Delifus is hoping to find a job in one of the few growth industries in Rhode Island: processing unemployment claims.

Last month, there were 11,000 requests for unemployment benefits and 4,000 filings for new federal unemployment payments, compared with 10,300 in the same period a year ago. “It’s a very tough job market out there,” Delifus said. “We’re both unemployed and desperately looking.”

In general, however, Governor Carcieri is not deploying state agencies to put residents to work. Last year, public employment dropped by 2,100 jobs.

But for Delifus, returning to sales would also be a challenge. Last year, the number of retail jobs plummeted by 4,600 jobs, losing 900 positions last month alone, the biggest drop in any sector. Following a national trend, holiday sales in Rhode Island fell 10.2 percent last November, compared with November 2007.

Manufacturing continued its decades-long decline last year, contracting by 3,800 jobs. The collapse of the housing market, which set off the recession, idled builders, excavators and demolition crews. In all, the construction industry ended the year with 2,500 fewer workers. Only education and health care saw job increases.

“Our hope is that there is an end to this and we can hit bottom and bounce back,” Paul J. Cronin, vice president at Cox Communications and one of Carcieri’s economic advisors, said yesterday.

Nationally, the scarcity of jobs has boosted military recruitment, after years of missed quotas. That is also true in Rhode Island, where the economy began its free fall before much of the rest of the country, making military offers of job training and subsidized education more appealing.

The Air National Guard signed up 157 recruits in the last fiscal year, compared with just 90 in 2004. “We’re scratching our heads a little bit,” Lt. Col. Denis J. Riel, the Guard spokesman, said. “Seven years into a shooting war, you wouldn’t think people would be clamoring to join the military.”

The overall rise in unemployment was not unexpected; Rhode Island had suffered job losses for 11 months in a row.

The state’s largest employers –– those with at least 1,000 employees –– account for 17 percent of all private sector workers. They bled jobs throughout the year, leading to the doubling of the unemployment rate.

Last month, Citizens Financial Group, American Power Conversion and Sovereign Bank, ranked by the state Economic Development Corporation as the 7th-, 35th- and 41st-biggest employers in Rhode Island, respectively, announced layoffs. In a report analyzing data from November, University of Rhode Island economist Leonard Lardaro warned of “growing economic weakness.”

Earlier this month, Bank of America said it would dismiss 121 employees in Lincoln, and boat builders Pearson Composites and Goetz Custom Sailboats left 125 without work.

The losses in marine trades are particularly disruptive in Rhode Island, which has sought to expand the industry. Other key sectors, such as financial services and tourism, are also suffering, said John J. Partridge, senior counsel at Partridge Snow and Hahn and an economic advisor to the governor.

“Clearly, we have a couple of rough quarters coming up,” Partridge said yesterday. “Everything that we’re interested in is really being whacked.”

A slow recovery would be painful for Barbara Houde, 62, of Cranston. She lost her job at an RV dealership this month, and simply keeping her health insurance costs $508 a month. “I have bills that I have to pay,” Houde said. “I’m not working, and I’m in big trouble.” Vanishing jobs

There were 22,000 fewer jobs in Rhode Island at the end of last year than there were at the end of 2007. Industries that saw the greatest declines were:

•Retail trade: 4,600

•Manufacturing: 3,800

•Professional and business services: 3,700

•Construction: 2,500

•Government: 2,100

bgedan@projo.com

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