It's an apparent sea of prosperity amidst New England's economic gloom. What's the deal?
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What's The Matter With Rhode Island?
04 Sep 2006 09:56 pm
Comments (16)
I would guess that it represents the effect of population inflows from higher income Massachusetts.
I knew that Michigan was having problems, but I never realized just how widespread the downturn was. I would have thought on local levels in Michigan some of what I consider to be the more affluent areas would be insulated from the downturn, that appears not to be true. I consider Ann Arbor to be rather well off, but it posted a 15.6% downturn in median wages. Even areas that I consider to be where the rich resides like Rochester Hills was down 7.8 percent. Canton was down "only" 6.3%, but housing and population in that area has been booming in the past couple of years and may be attracting some of the well off from other areas....wealth relocation within the state doesn't seem to be that big of a factor.
My wife works for a successful company in Ann Arbor and word from high in the past several years has said things haven't been better. Executives would come onsite to tell the employees how well the company was doing, but that did not set well with the employees. Feedback from employees on these meetings showed quite a bit of hostility since the company is posting record profits, but the majority of workers aren't seeing the fruits of this profitability. The meetings were a slap in the face to the workers who consistently receive raises that do not cover increases in the cost of living.
The whole map pretty much turns my conventional wisdom on its head with the median income stuff. I mean, its easy to understand Oregon (tech bubble burst) and Michigan (auto manufacturers laying off thousands). But North Carolina, Mississippi and Utah? And Texas comes in at -9.9%. What gives? These are just not places that I would think about as having this problem. Texas, where I lived till recently, has boasted of its economic prowess.
I thought the drops in median income were about regions losing power, and many of them at the same time, not such a widespread thing in places that are generally thought to be doing well. There's probably some interesting economic reporting to be done to tease out some reasons for this. Is it places with poor social safety nets (TX and MS)? Is it higher immigration rates? General shifts to the service economy? Some combination of all of it?
Very interesting.
Unlike, say, Massachusetts, Rhode Island is the home of an excellent institution of higher education.
My guess is tourism. Rhode Island is a small state. A disproportionate amount of its economy is geared towards recreation rather than industry.
The area's losing wage are more industrial, old line manufacturing economies. Florida doesn't make any sense in all this. But when did it ever in anything?
Definitely reasons to get involved in the following, especially in OH and CO, where the median wage has fallen pretty far.
www.raisewages.net
This is offtopic, but the link to Lindsay Beyerstein in your blogroll is goofed up.
"Unlike, say, Massachusetts, Rhode Island is the home of an excellent institution of higher education."
RISD is indeed quite a good school.
"It's an apparent sea of prosperity amidst New England's economic gloom. What's the deal?"
Two theories:
- Organized crime
- Family Guy
My only complaint is that Rhode Island does not resemble a see.
The Bishop of Providence begs to differ.
Actually since the national average was a 6% drop New England as a whole did ok.
But North Carolina, Mississippi and Utah?
NC? Collapse of manufacturing jobs. The tobacco buyout. The growing population of retirees in the far west of the state, contributing to an economy that's built more on the service sector. The high-tech stuff around the Triangle can't compete with the closure of mills to the west. Which is why CAFTA is going to be a big issue in this election.
Rhode Island? I dunno. The raw median figure ($64657) is lower than CT or MA, but my guess is that it's structural factors most of all.
HoyaChris definitely has part of the answer. Increased commuter rail service from Providence to Boston, combined with skyrocketing housing costs in Massachusetts (and RI, but happening more slowly and not to the same degree) have driven a significant number of people who earn salaries larger than the norm found in Rhode Island across the border. I'd also say that the tech boom and bust, which had a serious impact on the Massachusetts, especially Boston, economy, wasn't nearly as significant in RI, where there were fewer high tech jobs.
Unlike, say, Massachusetts, Rhode Island is the home of an excellent institution of higher education.
Rah rah Brunonia, Al.
But North Carolina, Mississippi and Utah? And Texas comes in at -9.9%. What gives?
North Carolina, despite the high-tech industry concentrated around the Triangle, suffered a one-two punch of losing its textile manufacturing jobs to Mexico and losing its furniture manufacturing jobs to Asia. It's Michigan writ small, only without the UAW.
I'd guess that the housing boom has had a disproportionate effect on Rhode Island's economy. A couple thousand new houses and extensive renovations for affluent Boston commuters and second-homers creates a lot of work in Rhode Island. This (along with the rapacious natural gas exploration) is probably also a pretty big contributing factor for Wyoming's increase (that, and the fact that wafes were starting at a really, really low level in WY).
Comments closed September 18, 2006.
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Heads in the Sand
Great catch. My only complaint is that Rhode Island does not resemble a see -- the area approximate that of Massachusetts Bay and is smaller than Long Island Sound. Perhaps a lake of prosperity, or, why not! an island.
Posted by piotr | September 4, 2006 10:23 PM