Scott MacKay Commentary: RI Election Year Economy Half Full or Half Empty?

Mar 16, 2018

The Rhode Island economy is sure to be a crucial topic in the state’s 2018 political campaigns. RIPR Political Analyst Scott MacKay says there is improvement, but the Ocean State is still a long way from flourishing.

Judging the state of the economy during the upcoming Rhode Island election campaign may prove elusive, akin to herding eels. Voters are sure to be subjected to a blizzard of data, binders full of reports and glitzy television spots saying the cup is empty or running over.

Jobs and the economy will be a crucial issue in the campaign for governor. For incumbent Democrat Gina Raimondo, who carries underwhelming job approval numbers into the race, this topic could make-or-break her reelection.

There will be reports to sift. Business and organized labor will chime in. The spectrum of flaky right to crunchy left interest groups will weigh in. And there are always those ubiquitous state-by-state rankings that show Rhode Island ahead or behind North Dakota or Texas -- whatever the cosmic significance of that is.

There’s a reason campaign season economic assessments are ultimately subjective.  As former US House Speaker Tip O’Neill was fond of saying, the economy is a kitchen table issue. What a voter thinks is often informed by dinnertime chat. How are we doing? Are the kids working at jobs with a future? Are our salaries keeping up with the bills? Can we afford a week on the Cape this summer?

As is the case around the nation, these discussions often reveal a tale of two societies. There is the flourishing one of well-educated, high-skilled and well-paid workers. And the other of underemployment, stagnant wages and life in the paycheck-to-paycheck lane.

While unemployment has steadily dropped in the Ocean State over the past few years, income inequality and sluggish job creation in industries requiring a college education or better continue to haunt attempts to make things better.

At the start, it’s clear that too many Rhode Island voters have a dour view of the way things are going. A recent WPRI public opinion survey showed that about 39 percent of voters believe the state is headed in the right direction, about 45 percent said Rhode Island is going in the wrong direction. The rest were undecided (5 percent) or thought it has remained the same (11 percent).

So the way Gov. Gina Raimondo has handled the economy is big. In politics, you harvest what you sow. Her relentless focus on job creation and attracting new business has raised expectations. Campaign spokesman David Ortiz says she is prepared to aggressively tout measures that have made things better, such as road repairs, making the Community College of Rhode Island tuition-free and attracting new industries.

If you only considered the low unemployment rate, you would have to conclude that things are looking up. But that’s only one metric. Other measures show things aren’t so great.

More Rhode Islanders are working, but many more of them work in other states, particularly Massachusetts, than live in surrounding states and come to the Ocean State to work. About 80,000 Rhode Island residents work outside the state. Less than 60,000 come to the Rhode Island to earn their living, according to data compiled by Paul Harrington, a labor economist at Drexel University.

University of Rhode Island economist Leonard Lardaro says that compared to the Boston metro area, Rhode Island still lags in creating high-skill and technology-based occupations. “The knowledge gap is scary, says Lardaro.

Much of the state’s tepid recovery, Lardaro says, can be attributed to the national recovery and our location next to the “hot job market” in Massachusetts.

The Rhode Island-based jobs lost in the recession have yet to be fully replaced, which is a big problem, says John Simmons, executive director of the Rhode Island Public Expenditure Council, a business financed government research group.

This is likely to boil down to whether you trust Raimondo to finish the job or whether you think it’s time for a change. One aspect that won’t change: Rhode Island will continue to be a fine place to live. And a tough place to make a living.

Scott MacKay’s commentary can be heard every Monday on Morning Edition at 6:45 and 8:45 and on All Things Considered at 5:44. You can also follow his political reporting and analysis at our ‘On Politics’ blog at RIPR.org