Study: Rhode Island leads the US in manufacturing job lossesMarch 20th, 2012 at 6:00 am by Ted Nesi under Nesi's Notes, On the Main Site
Manufacturing companies in Rhode Island cut more workers than their counterparts in any other state from 2001 to 2011, according to a Wall Street Journal analysis of Moody’s Analytics data.
Rhode Island lost 37.1% of its manufacturing jobs over those 10 years, as the industry’s total labor force dropped from 64,500 workers in 2001 to 40,600 in 2011. The next-biggest declines were in North Carolina (34.9%), Michigan (34.7%) and New Jersey (34.2%).
Other New England states lost a smaller but still sizable number of manufacturing jobs from 2001 to 2011, with declines ranging from 30.1% in Massachusetts to 24.6% in Connecticut. The only state where manufacturing work grew was tiny North Dakota, which eked out a 2.5% increase by adding 600 jobs.
“Companies are concentrating many of their manufacturing investments in states where unions are weak and wages are relatively low,” and they’re also “shopping for lower taxes and regulatory costs,” the WSJ reported. More than 17% of Rhode Island workers belonged to a union in 2011, above the 12% national average.
Rhode Island was an industrial powerhouse in the early 1900s, with factories churning out textile, metal and machine products, but that changed in the years after World War II. Manufacturing’s share of the state economy fell from 29% in 1963 to 16% in 1997, according to the R.I. Economic Development Corporation. It was down to 10% in 2006 under a new measuring system.
Part of the state’s struggle over the last decade may be due to rising competition from abroad. Workers in Rhode Island and Bristol County, Mass., faced more risk from China’s economic rise than their peers anywhere else in the country except San Jose, Calif., according to an academic study reported by WPRI.com last fall.
The EDC classifies more than 2,900 Rhode Island companies as manufacturers, and improved productivity has allowed them to produce more goods with fewer employees in recent years. Even as Rhode Island’s total manufacturing work force plunged by nearly half from 1997 to 2010, the sector’s total output increased.
Update: A group of economists, including former
EDC Economic Policy Council chief Rob Atkinson, is preparing to release a report arguing that the U.S. manufacturing sector is actually doing significantly worse than commonly thought:
What caused the job losses, in their view, is less the efficiency of U.S. factories than the failure of those factories to hold their own amid global competition and rising imports. The apparent productivity gains reflected in the official U.S. statistics have been miscalculated and misrepresented, they say, a position that has been at least partially validated by recent research. …
For starters, the reported productivity gains may be overstated because the statistics the government collects do not adequately reflect the changes that have come with globalization ….
But there may be another, broader problem with the manufacturing output and productivity figures.
Those numbers lump all manufacturing together when there are actually two very different trends afoot.
• Related: Why Apple doesn’t manufacture iPhones in Rhode Island (Jan. 22)