Economic Outlook; Panel says Rhode island Can Do More
By: Karen Lee Ziner
March 29, 2013
The national recession's lingering effects have taken "an enormous toll" on Rhode Island families, but the state can do much to help its work force and its residents move ahead, according to speakers at the Economic Progress Institute's sixth annual Policy & Budget Conference on Thursday.
The "Rhode Map to Economic Progress" conference was held at Rhodes on the Pawtuxet.
Keynote speaker Dean Baker, co-director of the Center for Economic Policy Research in Washington, D.C., said that while "it's hard to see Rhode Island prospering without a turnaround in the economy," the state "is doing some things right," but there is "a long way to go."
Among Baker's suggested remedies: increased work-sharing, a better-educated work force, reduced property prices, and a tax on services while reducing the sales tax on goods. (Governor Chafee has previously floated the latter idea, largely unsuccessfully).
Rhode Island is a national leader when it comes to job-sharing, Baker said. "That's great, but we probably can do more. If you can get companies to shorten work hours, rather than laying people off ... that's good policy." He called that "top on the list."
Baker also said property prices should "come down to earth."
"If you can bring prices down, you'd see more of these homes occupied and costs go down for people," he said, citing Detroit as an example.
"You can live in New York and share a closet, or you can live in Detroit and have two people sharing a house." Baker added, "Your vacant properties - why not have them filled?"
Ida Rademacher, chief program officer with the nonprofit Corporation for Enterprise Development, urged protections from predatory lending; requiring financial education in schools; and increasing education and training opportunities for low-skilled workers.
According to data Rademacher presented, nearly 28 percent of Rhode Island households are so lacking in liquid assets - with less than three months' savings to fall back on - that a job loss or medical emergency could throw them off balance.
For a nearly equal number, debts overwhelm any assets they do have, such as savings, homes, cars or businesses, according to data in the corporation's "Assets and Opportunity Scorecard."
"The average borrower in America is carrying around $10,736 in debt," Rademacher said. "In Rhode Island, it's more like $13,000."
She also noted that Rhode Island "is only one of five states in the country that doesn't have a policy integrating financial education in schools. There's lots of room for improvement there."
Doug Hall, director of the Economic Policy Institute's Economic Analysis and Research Network in Washington, said Rhode Island needed to "keep on doing things that are working."
Among them is the state's Temporary Disability Insurance program, which Hall called "vital."
He also said raising the minimum wage was "a key battle."
Hall noted that Rhode Island's $7.40 minimum wage is significantly lower than either that of neighboring Connecticut, $8.25, or Massachusetts, $8. He said a proposal to hike the federal minimum wage to $10.10 would benefit more than 100,000 workers in Rhode Island.
Raising the minimum wage "puts money in the pockets of lower-income folks. They'll spend it locally, and completely," Hall said, which he called "the most effective way."
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