Rhode Island’s Unemployment is Spiking, Despite Economy Reopening

Rhode Island’s Unemployment is Spiking, Despite Economy Reopening

Rhode Island announced last week that the state’s official unemployment rate is now over 16%. However, while Governor Gina Raimondo has moved the state into Phase 2 and announced Phase 3 reopening for the end of the month, unemployment claims continue to spike in the state. 

The number of Rhode Islanders who filed claims in the most recent seven days was 9,376 -- a 40% increase over the previous week and the highest number of filings in five weeks.

The past five weeks:

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Phase 2 of reopening began June 1st and since unemployment claims have continued to go upward.  In the past seven recently reported days, more than 9,000 filled.

From June 12 to June 18, Rhode Island was hit with 9,376 fillings.  Not since the first week in May have there been more filings.

Raimondo’s plan to reopen the economy was supposed to put Rhode Islanders back to work. 

“I expect the unemployment rate to still be at double-digit levels at the end of the year, given what are likely to be persistent economic headwinds from the pandemic over the second half of the year. And my own more pessimistic forecast does not fully incorporate the challenges of a second wave of the virus," said  Boston Fed President Eric Rosengren’s on Friday.

To date this year, Rhode Island has lost nearly 80,000 jobs, according to the Rhode Island Department of Labor and Training.

"We should begin moving from these depressed levels starting in May, but the extent of 'snap-back' will be somewhat limited here given our major structural deficiencies that were never meaningfully addressed in the last recovery," said URI Economist Leonard Lardaro.

He says, "Prior to the pandemic, Rhode Island’s resident employment (the number of employed Rhode Island residents, no matter where they are employed) had failed to meet its prior high of late 2006. With the COVID crisis, and the recession it caused, this has fallen to levels not seen since the early 1980s. Does this mean all that we gained since then has been lost? Only temporarily. As Rhode Island begins to reopen in phases, we will quickly move from these depressed levels."

"The primary determinants of how far Rhode Island employment recovers are whether (and if) there is a second wave of infections and how long it takes before an effective vaccination is discovered. In addition to this, Rhode Island is burdened with major structural issues associated with its business climate that were not meaningfully dealt with in the most recent recovery (or several earlier ones, for that matter)," adds Lardaro.