RI unemployment hits 10.3 percent

PROVIDENCE, R.I. (WPRI) - Rhode Island's unemployment rate rose to 10.3 percent in January, according to numbers released by the state Department of Labor and Training Tuesday. And a local economist said it's only going to get worse.

Rhode Island unemployment is at the highest rate in more than 30 years, and much greater than the national average of 7.6 percent.  Only Michigan, which has a 10.6 percent jobless rate, is higher.

"A lot of people think that we don't have the financial cushion that a lot of other states do because of our scale," said Laura Hart from the DLT. "We may be entering into an economic downturn sooner than the nation, but the nation is going to follow us."

According to the DLT, Rhode Island shed another 1,600 jobs in January, marking the 12th straight month of job losses for the state. In addition, the number of unemployed Rhode Islanders increased by 4,600.

Hart said construction, education, wholesale trade and professional and business fields saw the biggest layoffs in January.

For unemployed workers outside a job training center, the new figures make a bad situation worse.

"It's very, very difficult. There's nothing out there. People aren't hiring anybody right now because of the economy," said Carmen Escobar. "It's very stressful and very depressing. You want to be working. You want a job. You want to support your family. This just makes it very hard."

"2008 was a bad year. This year might be worse," said Larry Counts, also unemployed. "Your 401K, you gotta cash that out to live. Now that's almost gone and I'm in a hole."

Bryant University economist Edinaldo Tebaldi forecasts unemployment will climb to 11 percent before the economy starts recovering next year. But he said it could take years for the job count to reach its peak of February 2007, when 549,800 state residents were employed.

Rhode Island's dire financial situation extends beyond unemployment numbers. The state is trying to close a $357 million budget gap for this fiscal year, and with an unfunded pension liability of $7 billion, it's one of the worst in the country.

In fact, the state gained national attention for its problems when it was recently featured in a New York Times article entitled "Smallest State Grapples with Oversize Problems."

However, there is a bright spot for the state's unemployed. Starting this week, those collecting unemployment benefits will see an extra $25 in their checks, as the result of the federal economic stimulus law.