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Socioeconomic Factors

Introduction - Historical Overview - Socioeconomic Profile

Socioeconomic Profile - The Economy

Introduction | Social and Demographic Factors | The Economy | Projected Trends

Decommissioned South Street Power Plant in Providence.
Decommissioned South Street Power Plant in Providence, future home of the Heritage Harbor Museum.
Courtesy: NOAA

Economic trends in Rhode Island during the latter half of the 20th century in large reflected those of the nation as a whole. Total employment in Rhode Island grew at an average annual rate of 0.9 percent since 1950, with pronounced declines corresponding to national economic downturns. The national employment shift from the production of goods to the production of services that characterized the latter half of the 20th century was even more pronounced in Rhode Island. Since 1950, Rhode saw a steady decline in goods-producing jobs–primarily in manufacturing–and rapid growth in service-producing jobs, such as health, business, and educational services, and wholesale and retail trade.

In 1950, 53 percent of Rhode Island's employees worked in goods-producing sectors, 93 percent of those in manufacturing. From 1991 to 2001, employment in goods-producing sectors fell 15 percent while that of service-producing sectors rose 23 percent. By 2001, goods-producing employment accounted for only 18 percent of Rhode Island's total. Overall, employment in goods-producing sectors has declined at an average annual rate of 1.1 percent since 1950 while that in service-producing sectors grew at an average annual rate of 2.0 percent. (Rhode Island Economic Development Corportation 2000)

In 2001, there were 390,000 jobs in Rhode Island's service-producing sectors, accounting for 82 percent of total employment. Nineteen of the state's twenty largest employers are in service-producing sectors. This includes the sector traditionally designated as "services," which includes health, business, and educational services and collectively accounting for 35 percent of state employment, as well as wholesale and retail trades (22 percent), government (13 percent), finance/insurance/real estate (FIRE; 7 percent), and transportation (4 percent). The FIRE sector accounts for about a quarter of the state's gross product. In only three U.S. states, Delaware, New York, and Connecticut, does this sector contribute a greater share of the state product. From 1991 to 2001, service-producing employment rose 23 percent, including a 35 percent increase in services, 24 percent in finances, and 20 percent in wholesale and retail trade (Rhode Island Economic Development Corportation 2000). This growth resulted in the addition of tens of thousands of high-paying jobs in business, engineering, management, health, and educational services. The Rhode Island Economic Development Corporation (2000) wrote:

Business Services and Engineering and Management Services are among the fastest growing sectors of Rhode Island's economy, employing over 34,000 in 1996. Rhode Island companies have developed extensive system engineering and research facilities in support of the Naval Undersea Warfare Center in Newport. Over 2,600 firms provide business support services, not only for Rhode Island's diversified economy, but also export these services throughout the United States and the world.

Health Services is the largest employment group in Rhode Island. There are 14 general hospitals and two voluntary psychiatric hospitals in Rhode Island. All acute care general hospitals are approved by the Joint Commission for Accreditation, and are eligible providers under the Medicare programs. In addition, there are 110 nursing and personal care facilities in Rhode Island.

Rhode Island is a center of educational excellence producing more college graduates each year than high school graduates. Annually, Rhode Island's colleges and universities award almost 16,000 degrees. Three public and nine private colleges provide enrollment for over 79,000 students, including 55,000 undergraduate, and 8,900 graduate students. The majority of these students are from other areas of the United States and foreign countries. Rhode Island's institutions of higher learning are widely recognized for their prominence in specialized areas: Brown University for science, medical, and engineering programs, the Rhode Island School of Design for art and design programs, and the University of Rhode Island has a reputation for excellence in the fields of engineering, pharmacy, and oceanographic research.

Brown University, founded in 1764 in Warren, moved to its present location on College Hill in 1770.
Brown University, founded in 1764 in Warren, moved to its present location on College Hill in 1770.
Courtesy: NOAA

Employment in goods-producing sectors of the economy totaled 89,000, down from a peak of nearly 200,000 during the 1940s. Textiles dominated manufacturing employment in 1950, and led the decline of manufacturing jobs through the latter half of the 20th century. At more than 60,000 jobs in 1950, employment in the manufacture of textiles fell by half over the next decade, continuing its decline to fewer than 20,000 jobs in 1970, just over 10,000 jobs in 1985, and 5,600 jobs in 2001. Although employment in jewelry manufacturing continued to grow through 1978, reaching 33,000 jobs, it had fallen below 20,000 jobs by 1991 and below 10,000 jobs by 2001. Employment in the manufacture of industrial machinery, primary metals, rubber and plastic, and fabricated metal products followed a similar pattern. Employment in the production of instruments peaked a decade later at 8,000 jobs, declining to just over 5,000 jobs in 2001.

Despite these declines, the manufacturing sector remains important to Rhode Island's economy, accounting for 15 percent of the nonfarm jobs in 2001 and more than $2 billion in payroll. Over 1,000 firms produce jewelry and related products marketed under brand names such as Trifari, Monet, Vargas, Calibri, Allison Reed, AT Cross and Quill, and Sworovski, accounting for a quarter of the U.S. jewelry industry. Heavy industry has given way to high-tech manufacturing, with declines in the production of textiles and primary metals being to a degree offset by gains in the production of meteorological, navigation, and medical equipment, drugs, and advanced biomedical products. Even though in-state manufacturing employment declined, many large manufacturing firms are headquartered in Rhode Island, including Hasbro (toys), G-Tech (online lottery equipment), and APC (computer power supplies). Leading jewelry trade associations are also headquartered in the state, including the Manufacturing Jewelers and Suppliers of America, the United Jewelry Show, and the Jewelry Manufacturers Association.

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References

Rhode Island Economic Development Corporation. 2000. "About Rhode Island" Web page (http://www.riedc.com/aboutri/!aboutframe.html). Providence, Rhode Island.

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This site was created through a partnership of the:

Coastal Resources Management Council
Narragansett Bay Estuary Program
Save The Bay®