Rhode Island Jobs Fell by 1,200 in August

Because of the loss of many Rhode Island jobs and problems with the real estate market the state’s economy is suffering. In August the portion of the population claiming unemployment benefits rose to 8.5, which is the highest its been in the last 15 years.

This increase represented an additional 4,300 unemployed people in Rhode Island, brining the number of residents without work in August to 48,8000. A year ago this time only 5.1 percent of those who reside in the state were without work.

Between July and August employers cut around 1,200 Rhode Island jobs. This made August the eight consecutive month that the state lost jobs.

According to the state Department of Labor and Training, the industries that shed the most jobs were manufacturing and banking, finance and insurance. In addition to this, employers also did away with 300 business services positions.

Leonard Lardaro, a professor of economics at the University of Rhode Island, told the Associated Press that the state has been in a recession for approximately a year now. He believes that the current turbulence happening on Wall Street will only serve to further aggravate the existing problem and hurt the state even more.

“I feel the national and global economies are slowing, which is going to drag us down further,” said Lardaro.

The job market isn’t the only thing being effected by the economic woes. Due to a lack of funds, Rhode Island is now in the middle of a budget crisis driven, in part, by the fact that the unemployed pay less state income taxes and are unable to spend as much on consumer goods. The second of which means revenue collected from sales tax is also suffering.

Hoping to rectify some of this, lawmakers passed budget cuts in June that resulted in the termination of millions of dollars in spending. Despite this, the budget remained unbalanced, meaning that the state now faces a multimillion-dollar deficit for next year. With less to spend on inventive plans, officials will have less clout to use to pull new major employers to the area.