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1 STATE OF WORKING RHODE ISLAND 215 WOR KE RS OF COLOR economicprogressri.org

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3 INTRODUCTION R ising tides have not lifted all boats in the Ocean State. As our state s economy continues to recover from the devastating impacts of the Great Recession, there remains a jobs crisis in our urban communities which disproportionately impacts workers of color. The unemployment rate for Black Rhode Islanders is almost twice that of Whites and the Latino unemployment rate is more than double that of Whites. The median household income of Blacks and Latinos is just about half that of Whites 1. Moreover, one out of four Blacks and one out of three Latinos of working age do not have a high school credential, making it almost impossible for them to find meaningful employment today, or build a sound foundation for future economic success. Fully 35, Rhode Islanders lack full competence working in English, speaking English either not well or not at all, making the path to economic success more challenging. On virtually all economic measures, most of Rhode Island s workers of color fare worse than their White counterparts, as they do in every state. Even amongst Rhode Island s Asian community (which generally fares better than White workers) we know that Southeast Asians face similar impediments to prosperity as those faced by Black and Latino workers. As our workforce becomes older and more diverse, harnessing the talents and potential of all Rhode Islanders is imperative. By 24, the share of the labor force comprised of workers of color will have increased 8 percent from the start of this decade to 38 percent from 21 percent (or from about one in five, to more than one third). To be competitive in the global economy the state will require a bold action plan that purposefully leverages all of the state s human resources, including those populations who have had limited access to well-paying, quality jobs. This report provides an overview of the Rhode Island economy from the perspective of the men and women comprising the workforce, highlighting ways in which the economic conditions facing workers of color are particularly challenging. As Rhode Island s population and workforce becomes more diverse, it will become increasingly important to face head-on the significant racial disparities that exist in areas such as education, employment and earnings of workers of color. 1 Throughout this report, we strive to use consistent terms identifying the race/ethnicity of the Rhode Island population and workforce. Most of our data sets come from the US Census Bureau, and the categorization of people based on race and ethnicity is constrained by their categories, which are by nature imprecise. Data referring to White workers should be understood to identify non-latino Whites. We use the term Black to encompass those who identified themselves to the Census Bureau as non-latino Black or non-latino African-American. We use the term Latino to encompass those who identify as either Latino or Hispanic, and the term Asian to encompass the Census category Asian/Pacific Islander. 1

4 A CHANGING LABOR FORCE The Present Rhode Island s labor force has grown more diverse over the course of the last decade, and will continue to do so as the population diversifies over the coming years. Over the last decade, the share of the Rhode Island s workforce that is Latino 2 grew by 38% (from 8.4% to 11.6%) while the share of the White workforce decreased by 5.3% (from 82.6% to 78.2%), as seen in Figure 1. The Black 3 share of Rhode Island s workforce remained comparatively static over the course of the decade, comprising 4.6 percent of the Rhode Island labor force in 214, while the Asian 4 share of the labor force grew from 2.8 percent to 4.1 percent. White Share of Rhode Island Labor Shrinks, Latino Share Grows, % WHITE 85% 82.6% 5% 78.2% LATINO BLACK ASIAN 15% 11.6% 1% 8.4% + 38% 5% 2.8% % % + 38% % 4.1% FIGURE 1 Rhode Island Labor Force by Race/Ethnicity, Source: Economic Policy Institute and Economic Progress Institute analysis of Current Population Survey data In Figures 2 and 3 we see Rhode Island s labor force compared to both the New England region and the United States as a whole. We see that Rhode Island is slightly more diverse than the New England labor force, but less so than the national labor force. When looking at all six New England states, we see a distinct division between the northern New England States Vermont, New Hampshire, and Maine and the more populous southern states Connecticut, Rhode Island and Massachusetts. This division is most apparent when looking at the respective Latino shares of the workforce, with the northern New England states ranging from 1. percent (ME) to 3. (NH) percent, and the southern New England states ranging from 9. percent (MA) to 11.7 percent in Connecticut. Of the three southern New England states, Connecticut has the greatest diversity, with a higher proportion of both Black and Latino workers than either Massachusetts or Rhode Island. 2 Rhode Island s Latino population is comprised mainly of people of Dominican and Puerto Rican ancestry, with smaller numbers of people with Mexican, Guatemalan, and Columbian ancestry. 3 Rhode Island s Black population includes both American-born African-Americans and immigrants of African descent. 4 Rhode Island s Asian population includes significant numbers of people of Chinese/Taiwanese, Cambodian, Asian Indian, Filipino, Laotian, and Korean ancestry. STATE OF WORKING RHODE ISLAND 215

5 RI Labor Force Less Diverse Than US, More Diverse Than New England Region, 214 1% 8% 78.2% 8.2% RHODE ISLAND 6% 64.6% UNITED STATES NEW ENGLAND 4% 2% 4.6% 11.4% 5.2% 16.3% 11.6% 8.2% 4.1% 5.8% 5.% WHITE BLACK LATINO ASIAN Source: Economic Policy Institute and Economic Progress Institute analysis of BLS data FIGURE 2 Labor Force by Race and Ethnicity, Rhode Island, United States and New England, 214 Minority Share of Labor Force Differs Sharply Between Northern & Southern New England, % 11.6% 11.7% RHODE ISLAND 1% 8% 8.6% 9.% 6.8% MASSACHUSETTS CONNECTICUT MAINE NEW HAMPSHIRE 6% 4% 5.6% 4.6% 3.% 4.1% 5.% VERMONT 2% 1.1% 1.2% 1.1% 1.% 1.5% 2.3% 1.3% 1.% BLACK LATINO ASIAN Source: Economic Policy Institute and Economic Progress Institute analysis of BLS data FIGURE 3 Labor Force by Race and Ethnicity, Rhode Island and New England States, 214 3

6 The Future This demographic shift in Rhode Island s labor force will continue. According to projections, by 24, Whites will account for a smaller share of the Rhode Island workforce, decreasing to 62 percent, while the share of all other groups will increase: Asians to 4 percent, Black workers to 7 percent, and Latino workers doubling their presence in the workforce from 11 percent to 24 percent, as seen in Figure 4. Rhode Island s Labor Force Will Grow Increasingly Diverse by 24 1% 2% 3% 3% 4% 11% 8% 5% 24% OTHER ASIAN 6% 7% LATINO BLACK 4% 79% WHITE 62% 2% Source: Economic Progress Institute analysis of American Community Survey data from IPUMS-USA, University of Minnesota, and projection calculations based on population projections from PolicyLink and USC Program for Regional and Environmental Equity FIGURE 4 Rhode Island Labor Force Projections by Race/Ethnicity, , 24 STATE OF WORKING RHODE ISLAND 215

7 SOME ECONOMIC CONTEXT Recession, Unemployment and Underemployment Rhode Island s current economic situation is best understood in context: looking at recent economic trends, comparing to national and regional patterns, and finally, examining in some detail the ways in which minority populations especially Rhode Island s Black and Latino population have fared less well, not only during the Great Recession, but throughout the state s recent history. Figure 5 shows state patterns of unemployment during the Great Recession (between December 27 and June 29) and during the long slow path of economic recovery. We see that Rhode Island started the recession with a comparatively high unemployment rate, experienced a steep increase in unemployment rates as the recession took hold (peaking at 11.3 percent through the summer of 29), and has seen a slow but steady decrease in unemployment rates since late in 211. By 214, the Ocean State s unemployment situation had improved considerably, but was among the highest rates for all states throughout the year (resulting in an annual unemployment rate of 7.7 percent, tied with Nevada and Mississippi as highest in the nation). Rhode Island s declining unemployment rate throughout 215 had resulted in a more favorable relative position by July 215. Rhode Island Hit Hard by Great Recession, Slow to Recover Highest Unemployment Rate in 214, Improving Through July % RHODE ISLAND 12% UNITED STATES CONNECTICUT MASSACHUSETTS MAINE NEW HAMPSHIRE VERMONT 9% NEVADA NORTH DAKOTA 6% 3% US 4.9% NH 3.5% RI 6.1% RI 5.8% US 5.3% VT 3.6% Note: Nevada and North Dakota are included to provide further context. During most of the economic recovery, these two states had the highest (NV) and lowest (ND) unemployment rates. 27 Dec. 28 June Dec. 29 June Dec. 21 June Dec. 211 June Dec. 212 June Dec. 213 June Dec. 214 June Dec. 215 July FIGURE 5 Unemployment in New England States and United States, December 27-July 215 Source: EARN analysis of BLS data 5

8 Rhode Island Needs 12,7 Additional Jobs to Regain Jobs Lost During the Recession & Keep Up with Population Growth 5, July 29 49, 11,1 }} 1,6 48, NON-FARM JOBS IN RI 47, JOBS AT THE START OF THE RECESSION 46, JOBS NEEDED TO KEEP UP WITH POPULATION GROWTH JOBS NEEDED TO REPLACE JOBS LOST DURING THE RECESSION 45, 24 Jan. 25 Jan. 26 Jan. 27 Jan. 28 Jan. 29 Jan. 21 Jan. 211 Jan. 212 Jan. 213 Jan. 214 Jan. 215 Jan. FIGURE 6 The Rhode Island Jobs Deficit, July 215 Source: Economic Progress Institute and Economic Policy Institute analysis of BLS data Rhode Island Tied for Highest Overall Unemployment Rate in 214 8% 7.7% 7% 6% 6.2% 5% 4% 3% 2% 1% Mississippi Nevada RHODE ISLAND California Georgia Michigan Alabama Alaska Oregon Arizona Illinois New Mexico New Jersey Connecticut Tennessee West Virginia Kentucky Louisiana Missouri New York South Carolina Florida Washington UNITED STATES North Carolina Indiana Arkansas Delaware Maryland Massachusetts Maine Pennsylvania Ohio Wisconsin Virginia Texas Colorado Idaho Iowa Kansas Montana Oklahoma Hawaii Wyoming New Hampshire Vermont Minnesota Utah South Dakota Nebraska North Dakota FIGURE 7 Overall 214 State Unemployment Rates Source: Economic Policy Institute and Economic Progress Institute analysis of Current Population Survey data STATE OF WORKING RHODE ISLAND 215

9 Further evidence of Rhode Island s slow recovery from the recession is evident in Figure 6, Rhode Island s Jobs Deficit, July 215. This figure shows the slow recovery of jobs lost during the recession, and also estimates the number of jobs that would need to be added to the state economy to return to pre-recession labor-market conditions. Overall non-farm employment declined by 31,9 jobs during the recession, hitting the trough of the labor market in June 29. All but 1,6 of those jobs have been recovered, but during the eight years between the beginning of the recession and July 215, an additional 11,1 jobs needed to be added to keep up with population growth, leaving the total RI jobs deficit as of July 215 at 12,7. Rhode Island s very modest population growth since the onset of the recession (2nd lowest among all states, ahead of only Michigan), has left Rhode Island with a smaller jobs deficit (as a proportion of jobs required to return to pre-recession labor force conditions) than many states. Rhode Island s 2.6 percent jobs deficit in July 215 fell between Massachusetts and Connecticut s jobs deficits of 1. percent and 6.2 percent, respectively. SOME LABOR MARKET TERMINOLOGY Labor force participation rate is the labor force as a percent of the civilian noninstitutional working age (age 16 and over) population. Unemployment includes those not working, available for work, and actively seeking employment Underemployment includes unemployed workers and two other groups of people: involuntarily part-time workers who want full-time work but have had to settle for part-time hours; and so-called marginallyattached workers who want and are available to work, but have given up actively looking (This measure does not include people who have had to settle for employment below their skill or experience level, such as the mechanical engineer who is driving a cab. There is currently no data that track this form of underemployment). Part-time for economic reasons are those workers, sometimes referred to as involuntary part time, who gave an economic reason for working part-time (1 to 34 hours a week). Economic reasons include slack work or unfavorable business conditions, inability to find full-time work, and seasonal declines in demand. Those who usually work part time must also indicate that they want and are available for full-time work to be classified as part-time for economic reasons. RHODE ISLAND WORKERS IN 214 We ve seen how Rhode Island has been faring during the Great Recession and slow economic recovery. Several measures point to the economic well-being of Rhode Island s workers in 214. The foundational consideration when looking at Rhode Island s economic performance in 214 is that the overall unemployment rate of 7.7 percent ranked as the highest (tied with Nevada and Mississippi) in the nation, as seen in Figure 7. Four common measures labor force participation rate, unemployment rate, underemployment rate, and parttime for economic reasons as share of all part-time workers give a broad overview of the Rhode Island economy (these measures are defined in the accompanying text box). Rhode Island s racial and ethnic groups fared similarly on some measures, and very differently on others. Rhode Island s 214 labor force participation rates are very similar across all four racial/ethnic groups for which we 7

10 Rhode Island Labor Force Participation Rates Very Similar Across All Race/Ethnic Groups Less So for United States/New England 7% 65% 6% 65% 63% 66% 65% 62% 66% 65% 61% 62 % 66% 66% 68% 67% 64% 68% RHODE ISLAND UNITED STATES NEW ENGLAND 55% ALL WHITE BLACK LATINO ASIAN Rhode Island s 214 Unemployment Rate Higher than National & Regional for Most Groups Considerably Higher for Latino Workers 2% 15% 16.2% 1% 5% 7.7% 6.2% 5.9% 6.2% 4.9% 4.9% 11.5% 11.4% 11.5% 7.4% 11.4% 4.9% 6. % ALL WHITE BLACK LATINO N/A ASIAN Rhode Island s 214 Underemployment Rate Similar to National & Regional for Most Groups Notably Higher for Latino Workers 25% 2% 15% 1% 5% 14% 12% 12% 11% 1% 1% 21% 2% 21 % 25% 16% 22% 11% 1% 11 % ALL WHITE BLACK LATINO ASIAN Latino Workers in Rhode Island Face Higher Rates of Working Part-Time for Economic Reasons Similar Share to United States/New England 35% 3% 29% 31% 31% 32% 32% 25% 2% 15% 18% 21% 18 % 16% 17% 15 % 2% 21% 1% 5% ALL WHITE N/A BLACK LATINO N/A ASIAN Source: Economic Policy Institute and Economic Progress Institute analysis of Current Population Survey data FIGURE 8 Key Labor Market Indicators, United States, New England, Rhode Island, 214 STATE OF WORKING RHODE ISLAND 215

11 have data, as seen in Figure 8. White and Black labor force participation rates were 65 percent, 66 percent for Latino workers, and 67 percent for Asian workers. This contrasts with both the national and regional rates, which vary more significantly by race/ethnicity. Rhode Island s 214 overall unemployment rate of 7.7 percent exceeds both the regional and national rates, the Black rate of 11.5 percent was nearly identical to both the regional and national rates, while the White rate of 6.2 percent exceeded national and regional rates modestly, and the Latino rate of 16.2 percent significantly outpaced both the regional rates of 11.4 percent and the national rate of 7.4 percent respectively. The underemployment rates mirror the unemployment rates, as would be expected, with Rhode Island s significantly higher underemployment rate (25 percent, versus 22 percent regionally, and 16 percent nationally), standing out as noteworthy. When looking at the share of part-time workers working less than full-time for economic reasons (those who want and are available for full-time work but have had to settle for a part-time schedule because their employer doesn t give them enough hours or because they can only find a part-time job), Rhode Island s patterns track the national and regional patterns much more closely, with a White share of 16 percent, and a Latino rate of 31 percent (data on this indicator were not available for either Black or Asian workers). The disparities in unemployment rate based on race and ethnicity in 214 were entirely consistent with recent historical trends, as evident in Figure 9, where we see unemployment rates for White, Latino, and Black unemployment rates between 27 and 214. Wide Disparities in Unemployment Rate by Race/Ethnicity Highest White Unemployment Lower than Nearly the Lowest Minority Unemployment Rates 25% 2% 2.6% 17.7% 21.7% 18.1% 2.9% LATINO BLACK WHITE 16.2% 15% 11.5% 1% 7.7% 9.7% Highest White Unemployment 9.7% 6.2% 5% 4.3% FIGURE 9 Rhode Island Unemployment Rates by Race/Ethnicity, Source: Economic Policy Institute and Economic Progress Institute analysis of Current Population Survey data 9

12 Figure 9 shows clearly the prevailing gap between White unemployment rates and unemployment rates for both Black and Latino workers. Over the course of the recession and recovery, White unemployment more than doubled from 4.3 percent in 27 to 9.7 percent in 29, then levelled off, declining to 6.2 percent in 214. Latino unemployment grew from 7.7 percent in 27 to an early peak of 2.6 percent, leveling off with rates above 2 percent for three of the next four years, before declining in 214 to 16.2 percent unemployment. Black unemployment in Rhode Island peaked at 18.1 percent in 211, before declining to 11.5 percent. The dotted line in Figure 9 is placed at the high water mark for White unemployment during this period, the worst unemployment rate that White workers in Rhode Island experienced during the recession and recovery. The takeaway here is that the worst unemployment situation White workers face is better than nearly the best unemployment situation that Black and Latino workers face. When comparing Rhode Island s unemployment rates by race/ethnicity in 214 with its New England neighbors, the most striking fact is that Latino unemployment rates in the southern New England states were all quite high by national standards. Rhode Island s 16.2 percent Latino unemployment rate led the nation in 214, while Massachusetts 11. percent unemployment rate and Connecticut s 1.9 percent placed them with Rhode Island among the states with the five highest Latino unemployment rates. 5 FOCUS ON YOUNG WORKERS IN RI The impact of the Great Recession and the slow economic recovery has taken a significant toll on young workers, who have faced comparatively high rates of unemployment and underemployment. Given Rhode Island s high overall unemployment rates, it is not surprising that our youth unemployment rates have also been high. Young Workers in Rhode Island Face Higher Rates of Unemployment, With a Larger Share Long-Term Unemployed than National & Regional Counterparts 3% 25% 2% 15% 14.9% 13.4% 12.7% 26.% 24.3% 22.% RHODE ISLAND UNITED STATES 1% 5% NEW ENGLAND UNEMPLOYMENT RATE LONG-TERM UNEMPLOYMENT SHARE Source: Economic Progress Institute and Economic Policy Institute analysis of Current Population Survey data FIGURE 1 Unemployment Rates and Long-Term Unemployment Shares for Young Workers (Age 16-24), Rhode Island, United States, New England, There were 34 states with sufficient Latino populations to generate estimates of Latino unemployment. STATE OF WORKING RHODE ISLAND 215

13 As seen in Figure 1, in 214, not only did Rhode Island s young workers those years of age face higher rates of unemployment than their counterparts in New England and the United States, their incidence of long-term unemployment periods of unemployment greater than six months, were also higher. Amongst young unemployed Rhode Islanders, more than a quarter 26. percent faced long-term unemployment during the year, again higher than the rates both nationally and in New England. National data also show that young workers of color (those between years of age) have higher unemployment rates than the overall unemployment rate, evident in Figure 11. National data show young Black workers with the highest level of unemployment, at 15.8%, compared with the overall unemployment rate of 5.8%. Given the high levels of Latino unemployment for workers of all ages in Rhode Island (16.2 percent of Latino workers unemployed compared to 11.5 percent for Black workers and 6.2 percent for White workers) unemployment rates for young Latino Rhode Island workers very likely exceed the overall rate by a greater margin than does the rate for young Black workers in Rhode Island. 6 Nationally, Latino & African American Unemployment Rates Higher than White Rates for Young Workers (age 18-34) 2% 15% 15.8% 1% 5% 5.8% 8.2% 6.5% 8.% 6.1% ALL AGES ALL WHITE LATINO BLACK ASIAN Source: Young Invincibles Analysis of CPS data, Racial Disparities in Millennial Unemployment Rate Widen Despite Improved Overall Rate for Young Adults FIGURE 11 Unemployment Rate by Age, Race/Ethnicity, United States, Data limitations prevent us from presenting state-specific data on unemployment by age, race/ethnicity. 11

14 WAGES AND INCOME D Wages espite Rhode Island s dismal economic performance during the Great Recession and subsequent (and ongoing) recovery, there is surprisingly little evidence of sustained wage erosion in Rhode Island s median wage data, as seen in Figure 12. However, we see that for the three categories shown White workers, All workers, and Latino workers there has been no lasting growth in median wages for more than a decade. The addition of trend lines (dotted lines) reinforces this, with each trend line showing only very minor positive growth over this period. 7 Median Wages Stagnant Over Past Decade Large Gap Between Latino & White Wages $22 WHITE ALL LATINO $2 $18 $16 $14 $12 $19.52 $18.31 $12.11 $19.99 $18.24 Note: Inadequate data to show median wages for Black or Asian workers. $12.45 $ FIGURE 12 Median Wage by Race/Ethnicity, Source: Economic Policy Institute and Economic Progress Institute analysis of Current Population Survey data In addition to the stagnant nature of Rhode Island s median wages, the other noteworthy trend is the persistent wide gulf between the wages of White workers and those of Latino workers. Throughout this period, White median wages varied between one and half (1.54) and one and two-thirds (1.67) times greater than Latino wages. 8 This finding is consistent with what we know about the effect of higher rates of unemployment on wages. Given the significant gulf between the unem- 7 The lack of data for Black and Asian workers is problematic, though we can surmise that since both White wages and Latino wages grew modestly, but All wages declined modestly, that median wages for other racial groups, inclusive of Asian, must have eroded modestly between 22 and Analysis of 3-year American Community survey data (21 212) shows a similar gap between White median annual wages ($41,848), and Latino median annual wages ($23,726), with Black median wages falling in between, at $3,825. Source: Economic Progress Institute analysis of American Community Survey data from IPUM-USA, University of Minnesota. Data are based on workers 25 to 64 years of age. STATE OF WORKING RHODE ISLAND 215

15 ployment rates of White workers and Latino workers in Rhode Island discussed above, we would expect to see at least some negative impact on Latino wages. Because our primary data set for this study relies on single-year data (the Outgoing Rotation Group of the Current Population Survey), we are limited in our ability to estimate wages by race and ethnicity. We can, however, turn to other sources to dig a little deeper in comparing wages by race and ethnicity. Figure 13 shows median annual wages for several smaller groups of workers, based on five-year data for (Three-year data (21-212) for White, Black, and Latino are included for comparison). Median Wages Vary by Race/Ethnicity African American, Southeast Asian, American Indian, & Latino Workers Left Behind $55, $5, * Indicates data from the three year ACS data set, Other data are from five-year data spanning $44, $41,848 $38,486 $36,15 $33, $3,825 $3,621 $3,384 $22, $23,726 $11, SOUTH & OTHER ASIAN WHITE* EAST ASIAN ALL ASIAN BLACK* SOUTHEAST ASIAN AMERICAN INDIAN LATINO* FIGURE 13 9 Median Annual Wage by Race/Ethnicity, (212 Dollars) Income Source: Economic Progress Institute analysis of American Community Survey data from IPUM-USA, University of Minnesota, Rhode Island s median household income 1 continued a downward trend in 214, a trend that had started well before the onset of the Great Recession (evident in Figure 14). We see the median household income for All workers, White workers, Asian workers, Black workers, and Latino workers in Figure 15. The disparity between White workers and workers of other racial and ethnic groups is noteworthy. Comparing Rhode Island s median household incomes with those for the nation, we see that the overall median household income, the White median household income, and the Black median household income are very similar, while Rhode Island s median income for Asian, Latino, and American Indian households fall well below the national level. 9 Note: Data are for 25- to 64-year-olds. American Indians include Alaska Native, Latinos, and biracial and multiracial individuals. Asian American groups exclude Latinos, and non-asian biracials and multiracials. The Southeast Asian category includes the Cambodian, Burmese, Filipino, Hmong, Indonesian, Laotian, Malaysian, Thai, and Vietnamese. The East Asian category includes the Chinese, Japanese, Korean, Mongolian, and Taiwanese. The South Asian category includes the Asian Indian, Bangladeshi, Bhutanese, Nepalese, Pakistani, and Sri Lankan. The Other category includes individuals of two or more Asian ancestries and Asian ancestries not listed in the other sub-populations. 1 Income consists of all earnings including wages, salaries, and self-employment income, interest and dividend income, and all other sources of income. The reasons median incomes have been in decline while wages have been essentially stagnant may include fewer weekly hours worked, and periods of unemployment or underemployment that do not effect hourly wage calculations, but do reduce annual income. 13

16 Rhode Island s Median Household Income Continues Downward Trend $66, $64, $62, $62,87 RHODE ISLAND TREND UNITED STATES $6, $58, $56, $56,63 $54,891 $54, $52, Great Recession Begins $53,657 $5, Source: Economic Progress Institute analysis of US Census Bureau ACS data FIGURE 14 United States, Rhode Island Median Household Income, (214 Dollars) Median Household Income Varies By Race/Ethnicity Asian, Latino, & American Indian Incomes in Rhode Island Trail National Incomes $8, $7, $6, $5, $4, $3, $2, $74,15 $62,23 $59,622 $61,46 $35,481 $35,772 $4,895 RHODE ISLAND MEDIAN HOUSEHOLD INCOME UNITED STATES MEDIAN HOUSEHOLD INCOME $31,283 $42,748 $3,797 $37,227 $53,657 $54,891 $1, $2,485 ASIAN WHITE BLACK SOME OTHER RACE LATINO AMERICAN INDIAN & ALASKAN NATIVE ALL Source: Economic Policy Institute and Economic Progress Institute analysis of Current Population Survey data FIGURE 15 Median Household Income by Race/Ethnicity, United States and Rhode Island, 214 STATE OF WORKING RHODE ISLAND 215

17 EDUCATIONAL ATTAINMENT With so many economic decks stacked against them, what can minority populations do to improve their economic well-being? The most common cited solution to improve the chances for economic security is to increase education and training. There is a persistent and significant premium from achieving higher levels of education, as seen in Figure 16. Education Pays Rhode Island Median Wages by Educational Attainment, $3 $25 $2 $15 $14.79 $27.37 $15.39 BACHELOR S OR HIGHER SOME COLLEGE HIGH SCHOOL LESS THAN HIGH SCHOOL $1 $11.3 $ FIGURE 16 Rhode Island Median Wages by Educational Attainment, Source: Economic Policy Institute and Economic Progress Institute analysis of Current Population Survey data In 212, the most recent year for which we have data across all four educational attainment groups, three things are striking. First is the premium associated with achieving a Bachelor s degree or higher. Compared with a high school diploma, completion of a four year college program nearly doubles ones wages. The second thing, with significant implications for policy makers, is that there is very little difference in wages between those who have completed a high school degree, and those who have attended some college (but not completed their degrees). Because this is the case, we need to ensure that public policies (both federal and state) are designed to not only encourage students to begin a college program, but also provide the basic supports necessary to facilitate completion of a college degree. Third is the premium associated with achieving a high school diploma or equivalent. In addition to ensuring more young people graduate from high school, policy makers should also consider strategies for increasing attainment of high school equivalency diplomas for adults. 15

18 The implication of this is clear for those looking at Rhode Island s disparities in educational attainment by race and ethnicity. There are significant racial disparities in the educational attainment of Rhode Island workers. More than one in three Latinos and one in four Blacks lack a high school credential compared to just one in ten Whites. Attainment of a Bachelor s degree or graduate degree is much lower among these populations than for Whites. Rhode Island has a higher percentage of workers with less than a high school diploma, across all racial groups, than all other New England states, as evident in Table 1, where the numbers in blue indicate the highest share lacking high school diploma. Share of Population Lacking High School Diploma: US & New England States RACE/ETHNICITY US CT ME MA NH RI VT Black 17% 17% 22% 18% 17% 25% 16% Asian 14% 12% 2% 16% 14% 22% 21% Latino 37% 31% 16% 33% 24% 38% 11% White 9% 7% 9% 7% 8% 11% 8% Note: Percentages in blue indicate highest rate among New England states. TABLE 1 Source: American Community Survey, , 5-year estimates In Table 2 we see there is significant variation between New England states and across race and ethnic groups in the share of the population with a bachelor s degree or higher. Unlike the less than high school category, there is not a clear pattern across states, though one evident pattern is that Rhode Island trails all New England states in share of Black and Latino people with bachelor s degree or higher. Share of Population with Bachelor s Degree or Higher: US & New England States RACE/ETHNICITY US CT ME MA NH RI VT Black 19% 19% 18% 23% 27% 18% 39% Asian 5% 61% 38% 57% 56% 42% 44% Latino 14% 15% 25% 17% 23% 12% 38% White 32% 4% 28% 42% 34% 34% 35% Note: Percentages in blue indicate lowest rate among New England states. Percentages in brown indicate highest rate among New England states. TABLE 2 Source: American Community Survey, , 5-year estimates STATE OF WORKING RHODE ISLAND 215

19 RHODE ISLAND S EMPLOYMENT SECTORS The sectoral makeup of a state s employment base, and trends over time as that base shifts from one sector to another, has a significant impact on the economic well-being of workers. Rhode Island s economy has been transformed mostly in negative ways by the decimation of its manufacturing sector. Figure 17 shows the decline in manufacturing since the onset of the Great Recession in 27. While nationwide, manufacturing employment has declined more than 12 percent, Rhode Island s decline of nearly 2 percent ranks fifth greatest among all states. Only Maryland, New Jersey, Delaware, and New Mexico fared worse during this period. Despite having stemmed that tide in recent years, there remain significant scars on the Rhode Island economy. Building that sector up again would likely have a positive impact, but it is not the only path to future prosperity. The experience of neighboring Massachusetts, with its comparatively small share of employment in manufacturing and comparatively strong economy, highlights the fact that there are choices that can be made that lead to increased prosperity. Public and private sector leaders working together to find (or create) those paths is a central challenge facing Rhode Island today. Ongoing Erosion of Manufacturing Employment During Great Recession/Recovery, % 5% % -5% Alaska South Dakota North Dakota Washington Wyoming Nebraska Iowa Texas Utah Colorado Louisiana Michigan Wisconsin South Carolina Montana Indiana Kentucky Oklahoma Minnesota Idaho Hawaii Oregon Kansas UNITED STATES Ohio Vermont California Arizona Pennsylvania Illinois New Hampshire Tennessee Alabama Georgia Massachusetts Maine Missouri Connecticut North Carolina Virginia Nevada Florida Mississippi New York Arkansas West Virginia RHODE ISLAND Maryland New Jersey Delaware New Mexico -1% -15% -2% 12.2% -25% 19.3% Source: Economic Policy Institute and Economic Progress Institute analysis of Current Employment Statistics data FIGURE 17 Manufacturing Employment, United States and 5 States,

20 Changes in the sectoral mix of the Rhode Island economy as we look forward will likely impact the state s largest ethnic and racial groups differently. Table 3 shows 16 industry sectors ranked by projected job growth between 212 and 222, and the distribution of workers by race/ethnicity, across all sectors. Several things stand out as noteworthy. First, among the six sectors expected to grow the most, three had median annual wages between that were substantially below the overall median annual wage of $39,199, while sectors with the least growth expected are those with generally higher median annual wages. Looking at these projected growth figures from the perspective of Rhode Island s largest racial/ethnic demographic groups, we see a mixed bag. Latino workers are more highly concentrated in growing sectors, but median wages in those sectors Employment Sector by Race/Ethnicity, Projected Job Growth, & Median Annual Wage JOB MEDIAN GROWTH ANNUAL WAGE RANK INDUSTRY WHITE LATINO BLACK (212 Dollars) 1 Health Care and Social Assistance 15.1 % 11.3 % 28.1 % $36,235 2 Professional and Technical Services 9.4 % 12. 5% 6. % $41,56 3 Arts and Entertainment 9.8 % 13.7 % 9.8 % $22,659 4 Construction 6.1 % 3.8 % 3.7 % $39,87 5 Manufacturing 1.4 % 19.8 % 9.2 % $4, Subtotal Top Five 5.8 % 61.1 % 56.8 % 6 Retail Trade 11.8 % 1.4 % 1. % $31,437 7 Finance, Insurance, Real Estate, and Rental Leasing 7.4 % 4. % 4.9 % $45,727 8 Educational Services 11.1 % 5. % 9.3 % $47,4 9 Transportation and Warehousing 3.2 % 2.9 % 3.9 % $41,263 1 Other Services 4.4 % 5.3 % 3.6 % $3, Wholesale Trade 2.2 % 2.6 % 2. % $45, Agriculture, Forestry, Fishing and Hunting.4 %.4 %. % N/A 13 Mining. %. %. % N/A 14 Utilities.6 %.1 %.5 % N/A 15 Information 1.9 % 1.2 % 1.4 % $46, 16 Government 4.5 % 2.2 % 4.8 % $59, TOTAL 98.3 % 95.2 % 97.2 % $39,199 Note: Columns do not total to 1% because of individuals in the military and the long-term unemployed. Missing wage data is due to insufficient sample size. Median Wages in blue are more than $2 less than the state median annual wage, those in brown are more than $2 more than the state median annual wage. TABLE 3 Source: Economic Progress Institute analysis of data from Rhode Island Department of Labor and Training and American Community Survey data from IPUMS-USA, University of Minnesota, STATE OF WORKING RHODE ISLAND 215

21 in which they are concentrated are generally lower than the overall median wage. The notable exception here is wholesale trade, in which median wages of $45,931 are well above the overall median annual wage. Black workers are disproportionately employed in health care and social assistance (which leads all sectors in projected growth), transportation and warehousing (in the middle of the pack for projected growth), and government (the sector anticipating the slowest growth over this period). White workers are disproportionately employed in all five sectors anticipating slowest growth, but are also disproportionately employed in a couple of sectors anticipating both high and moderate growth. In Table 3 we see that White, Latino, and Black workers are all quite concentrated in the top five sectors (though because White workers are less heavily concentrated, they are arguably less vulnerable to economic shifts, compared, for example, to Black workers who are heavily concentrated in the Health Care and Social Assistance sector). Despite this being the sector that is projected to grow the most, having too many eggs in one industry sector basket may not be ideal for Black workers. The disproportionate concentration of Latino workers in the manufacturing is noteworthy given the vulnerability of this sector to shifts in global trading patterns, though collectively with double digit shares of workers in five of the top six industrial sectors Latino workers appear to have protected themselves from potentially disruptive sectoral shifts. 19

22 CONCLUSION The fact that the Great Recession was hard on Rhode Island is widely understood, as is the fact that some racial and ethnic groups generally do worse than others within the economy. This is true nationally, regionally, and certainly within Rhode Island. This report has outlined several specific examples of these economic disparities. While Rhode Island s Latino workers generally face the largest gaps in educational attainment, wages and income, other groups including the Ocean State s Black workforce and the state s Southeast Asian population also fare poorly compared with the state s overall rates. The accompanying policy document outlines some ideas to lift up Rhode Island s workforce so that nobody is being left behind, and particularly not because of their race or ethnicity. STATE OF WORKING RHODE ISLAND 215

23

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