CHARTING GROWTH OF JOBS IN R.I.
Journal, Sunday Money & Business Page, June, 1998
Where did Rhode Islands primary job growth occur in what I have
recently referred to as its "bizarre" top five? In a recent article, "The
Real Picture in the Bay State," (The Providence Journal, October 6, 1998), Robert A.
Jordan lamented that: "
jobs created in the last decade tend to be more
temporary, lower-paying, and with fewer benefits than most jobs that left Massachusetts
over that time." He cites an average annual salary of $21,000 for jobs created
between 1993 and 1996, noting that these jobs: "
come largely from temporary
employment services and job placement agencies." He also cites the latter two
employment categories as the most rapidly growing areas of employment for Massachusetts
and the nation. Cheer up, Mr. Jordan, it could be worse.
For Rhode Island, the greatest "top five" job growth by far in 1997 occurred in
Business Services, an industry that I would argue belongs in any states "top
five." This accounted for 81.4 percent of Rhode Islands "top five"
job gains (note that two of our "top five" had declining employment). The
average annual income in Business Services for Rhode Island in 1997, $23,830, exceeds the
1993-1996 figure for Massachusetts that Mr. Jordan was so concerned about. So far, so
The next obvious area to explore is the set of sub-industries (Standard Industrial
Classifications, or SIC's) that make up Business Services. SIC 736, "Personnel Supply
Services" (i.e., "temps") grew at a double-digit rate (of 11.4% in 1997),
constituting 73 percent of the total Business Service gain for Rhode Island. The average
annual income of workers in this SIC was $13,249! Suddenly Mr. Jordans $21,000
income figure doesnt seem all that bad.
Anyone focusing on the proportion of payroll employment accounted for by Business Services
would probably say: "The business service proportion of total employment in Rhode
Island is third highest in New England. So What? To answer this, permit me to contrast the
proportions of workers in various Business Service categories for Rhode Island and
Massachusetts (its data for 1997 were not released at writing time). One figure jumps out
at me: Massachusetts had 30 percent of its total in Personnel Supply Services for 1996,
versus a whopping 43 percent for Rhode Island! That proportion rose to 45 percent in 1997.
Comparison of Business Services: Rhode Island and Massachusetts for
In 1996, the average annual wage in Personnel Supply Services for Massachusetts was
$21,101, a value almost identical to the average income figure that Mr. Jordan lamented.
As I stated earlier, it could be worse, Mr. Jordan. The average annual income in this SIC
for Rhode Island was $12,956, barely more than 60 percent of the Massachusetts value.
Average income for this SIC grew to only $13,249 in 1997, which continues to seriously lag
even the 1996 value for Massachusetts. Must be differences in the cost of living, right?
Get serious! The occupational and industrial composition of these jobs, along with tighter
labor markets in Massachusetts, accounts for much, if not all, of this difference. This is
what happens when a state like Rhode Island that is well into being a service and
information-based economy (this is our 12th year) fails to define itself for this era.
As we move to a period of slower economic activity, Rhode Island finds itself with too
large a concentration (almost half) and the most rapid growth of Business Services in
relatively low paying temp jobs. I would much rather see 30 percent of the total in SIC
737 (Computer Programming) with a smaller concentration in Personnel Supply Services, as
by Leonard Lardaro