December 15, 2004

No Longer Looking, No Longer Here

Justin Katz

Here's an interesting find from URI economics professor Leonard Lardaro:

As our unemployment rate fell from 5.8 percent to 4.5 percent, resident employment, the number of Rhode Islanders who were working, rose by only 423! The decline in our labor force, 7,146, was almost identical to the drop in the number of unemployed, 7,569, which is consistent with the discouraged worker effect.

It would make for an interesting study to examine increases and decreases in welfare caseloads and emigration during the same period. I've never quite understood how people can just stop looking for work. (That lack of comprehension, just so you know, has both practical and moral components.) People have to survive. Are the "discouraged workers" attempting to get by on a single income, if married? Are they going on welfare? Are they moving out of state? (Are they even fully autonomous adults?)

Looking at some additional information that Professor Lardaro provides for his "Current Conditions Index" on his Web site, new claims for unemployment insurance are up, while new housing permits are even more dramatically down. That's on a month-to-month basis, so it doesn't accurately capture longer term trends. Still, I'm close enough to the financial brink to know the temptations of abandoning ship and heading where work is more plentiful and housing cheaper. And I'm sure that many Rhode Islanders have taken that course; I wouldn't be surprised if it were the case most frequently (and most distressingly) among the young and ambitious.

Another chart on Lardaro's site shows that increases in local government employment dramatically outpace those in the private sector. In Rhode Island — a state that saw a mere 2.4% growth in population from 2000 to 2003 (PDF) — fewer people are paying for more public employees and improving benefits for them. Discouraging, indeed!

Circumstances must improve, one way or another. The question for such families as mine is whether we can afford to hang on until they do.