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Business Insider: What's wrong with Rhode Island?

 
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08/10/2014 09:14 AM
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Business Insider: What's wrong with Rhode Island?
[link to www.businessinsider.com]
For the better part of a century, Providence, Rhode Island, was known as "the jewelry capital of the world." At its peak, the city boasted an estimated 85% of the precious metals products manufactured in the U.S., and the industry was the state's primary source of revenue.

But by the 1980s, jewelry manufacturing was in a tailspin. Between 1978 and 1996, the number of jewelery employees shrank to 13,500 from 32,500, according to The New York Times.

Today, Rhode Island employs just over 3,000 jewelry workers, a 70% drop from 2000.

It's called the Ocean State, but Rhode Island might better be considered a satellite of the Rust Belt, as it's been in a state of unending decline for nearly three decades. At 7.9%, it now has the country's highest unemployment rate. A plurality of Rhode Islanders are now employed in either healthcare or tourism, while total manufacturing employment has declined 43% since 2000 to 41,000 workers, less than 10% of the overall workforce.

"Rhode Island became a post-manufacturing economy ... over 25 years ago," Len Lardaro, a University of Rhode Island economist, told Business Insider.

What happened?
[link to static1.businessinsider.com]

Like the Rust Belt, the state faced a flood of cheap overseas competition, especially from East Asia. A 2013 paper chose Providence as an archetypal city vulnerable to outsourcing competition from low-wage workers in China between 1990 and 2007. National Bureau of Economic Researchers calculated that the city saw increases in Chinese import exposure of $2,910 per worker between 1991 and 2007. In other words, employers could save almost $3,000 per worker if they started using Chinese workers instead of American ones.

"Several years ago a major American company offered to buy 100,000 corporate medallions from me if I could match, or even come close to, the unit prices they cost in Taiwan: twelve to fourteen cents each, a retired Rhode Island jewelry executive told editor Ted Klein in his book on the state published in 2008. I contacted nearly a dozen firms in Providence, and the cheapest price they could quote me was twenty-eight cents.

And yet the cost of doing business did not come down. The state's 9% corporate tax rate has long been one of the highest in the nation. Between 1988 and 1998, property values in the state's five largest cities declined by 24%, or more than $3.3 billion. At the same time, their effective tax rates went up by 44%, according to a 1999 report.

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Norml85

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08/10/2014 09:20 AM
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Re: Business Insider: What's wrong with Rhode Island?
Didn't read your link, but it probably has a lot to do with most of the mafia being disbanded on fed hill.
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04/14/2024 06:45 PM
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Re: Business Insider: What's wrong with Rhode Island?
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04/14/2024 06:54 PM
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Re: Business Insider: What's wrong with Rhode Island?
It’s not an island and it’s full of assholes.





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