R.I. has a long way to go

It is always good to see some economic numbers improving for Rhode Island, especially because they have been up and down in recent months.

But it is important that the state’s policymakers are not distracted by the frantic cheerleading of Rhode Island Commerce Secretary Stefan Pryor (“Rhode Island economy revs up after idling,” news, Oct. 19).

While Rhode Island is benefiting from a strong national and Boston economy, it still has serious problems that have yet to be addressed.

According to CNBC, Rhode Island slipped back this year into having America’s worst business climate. Its regulatory and tax climates are uncompetitive. Its public education, crucial to developing an educated workforce, is second-rate.

Mr. Pryor touts growth of gross domestic product in Rhode Island in the first quarter of 2019, but according to the federal Bureau of Economic Analysis, our 2.2% GDP growth rate is among the lowest in the country, stronger only than that of Hawaii (1.2, New Jersey (1.8%) and Mississippi (1.9%). Such mediocrity is nothing to crow about. In the boom states of Texas and West Virginia, GDP grew by more than 5%.

Rhode Island’s civilian labor force remains well below where it stood in December 2006, when it last peaked. The labor force participation rate is also below that peak. It took Rhode Island 12 years to eclipse its past payroll employment peak, but many of the employed are in lower-paying and part-time work, University of Rhode Island economics professor Leonard Lardaro notes.

In his analysis of August data, Mr. Lardaro found the Rhode Island economy doing better than it had several months earlier. Unfortunately, some of the indicators he observed not only failed to improve but also “displayed substantial weakness.”

Total manufacturing hours fell at a double-digit rate for the eleventh straight month. Single-use permits, a measure of new home construction, fell by 9 percent after rising three of the four preceding months.

“Sadly,” he noted, Rhode Island has demonstrated a “continuing failure to meaningfully reinvent itself as a post-manufacturing economy (since late 1987), aside from the highly publicized deals” of the Commerce Corporation “that often don’t materialize.”

The Raimondo administration has been trying, with limited success, to build on Rhode Island’s strengths in health care and higher education to attract high-paying jobs. But the headlines have often outstripped the reality. And now the state’s health-care industry is at risk of being picked to pieces, with the Care New England tail refusing a Rhode Island merger unless it is allowed to wag the dog.

Mr. Lardaro believes Rhode Island remains in the unenviable position of being first-in and last-out in national recessions (something he calls FILO), largely because policymakers have failed to change government enough to be fully receptive to business activity.

It’s important to note the state has taken some bold steps under Governor Raimondo to turn this around. New truck tolls are helping with a massive effort to rebuild the state’s deteriorating bridges. Better infrastructure is vital to a First World economy. And after pursuing weak and timid policies for more than four years, the governor brought in a new education commissioner this year who threatens to shake things up.

But the state must continue to seek ways to reinvent and strengthen its economy. For the foreseeable future, Mr. Lardaro says, Rhode Island’s economy will depend “almost entirely” on “how well the national and Massachusetts economies perform.”

This editorial first appeared in The Providence Journal on Oct. 21.