Rhode Island Isn’t Big on Reinvention

So Rhode Island is hemoraging its young and ambitious citizens. That’s not really news, but its mention gives us an excuse to consider our state in broad terms.
Any state-sized entity will have a broad middle for which life simply goes on — with more or less difficulty — whatever the trends along the all-important margins. But as a general proposition, it strikes me as characteristic of Rhode Island to enable policies that drive out the young and the entrepreneurial, while attracting those who will surely be state-dependent (i.e., welfare recipients, in one form or another). As a matter of simple logic, then, it follows that the movers and shakers who remain will be those who’ve found a way to capitalize on the ill health of the state, whether directly or indirectly. That would seem likely to result in a self-reinforcing downward spiral.
According to University of Rhode Island economist Leonard Lardaro:

With our budget deficits, the fact that our population is declining and the fact that we know our tax and cost structure is not competitive, Rhode Island needs to reinvent itself. This is not the time for piecemeal answers.

So what do you think? How about we “conserve” huge swaths of land, dictate a $10 per hour minimum wage and non-discrimination rental status for felons, layer regulations (as opposed to, say, consumer choices) on healthcare by government fiat, and finance our legislators’ progressive education? Okay, fine. You drive a hard bargain, but we’ll keep allowing public-sector employees (such as teachers) to unionize.
If that’s not a formula for success, then I’m not a native Rhode Islander…

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Rhody
Rhody
14 years ago

None of the above is driving younger folks out of the state – it’s the good ‘ol boys who are doing it. It’s the feeling that no one in power stands up for their interests, that the money and power decisions are made at the Capital Grille and Capriccio instead of out in the open, that elected officials kowtow to long-established financial and religious institutions, that the tentacles of organized crime extend into politics and municipal government…I’ve found those issues do a lot more to drive young people out of Rhode Island than environmental regulations, unions, aid to less unfortunate citizens, etc.

Greg
Greg
14 years ago

Yeah Rhody? Wait until American Power Conversion leaves the state later this year and takes the thousands of tech jobs with it. They aren’t leaving because they don’t like the decision makers. They’re leaving because it’s too expensive to operate here.

johnb
johnb
14 years ago

as someone who has experienced coming out of college into the rhode island “job market” in recent years, i can attest to the fact that the incentives for leaving the state far outweigh those for staying in state for a combination of reasons that both rhody and greg cite.
specifically: in fields involving politics, government, or pr (including the large non-profit sector), the good-ol’-boy network does indeed apply.
as for more traditional private sector white collar jobs? due to the high cost of doing business (including the demands of unions and rigid tax structure) and the lack of economic diversification, they simply do not exist.
the top 5 best bets for job seekers under the age of 30?
5. chart your own course: start your own business and hope to survive
4. sell out to the powers that be
3. forget post-grad studies. join a union.
2. run for the general assembly as a democrat. proceed to sell your seat. repeat in two years.
1. the best bet for young RI job seekers? move to boston or new york and return in 20 years to a state that’s been run into the ground by former botton-rung classmates who either sold out or rose to the top due to a shallow career pool.

Ragin' Rhode Islander
Ragin' Rhode Islander
14 years ago

The young people who leave, by definition, do not vote in Rhode Island, so the General Assembly could care less.
Indeed, educated and ambitious people are far more likely to vote Republican than are government-dependent state employees and welfare / RIteCare / daycare “workers” … so from a Democrat Party standpoint, the more educated and ambitious people that can be “encouraged” to leave, the stronger the Party’s hegemony.
The problem for the Democrats is that they’re almost at the point where the number of productive taxpaying citizens is falling below the “critical mass” required to support their union / welfare state.

SusanD
SusanD
14 years ago

Rhody, my friend, our elected officials kowtow to the public labor unions, not financial or religious institutions. They simply cannot say no to them. That’s why we have an oversized, well compensated government with lots of generous, unnecessary programs to administer and the high taxes to show for it.
The State of Rhode Island is the largest employer in the state. Can we now start vilifying the State and public labor unions the way some of us have been bashing the big, bad (but voluntary, as has been pointed out) corporate boogeyman?
“The problem for the Democrats is that they’re almost at the point where the number of productive taxpaying citizens is falling below the “critical mass” required to support their union / welfare state.”
Correct. But too many of our elected officials lack the spine to get us going in a more productive direction. (Kowtowing is easier when you’re an invertebrate.)
I’m curious, though. When it crashes, what are they going to say to all those people they made promises to?

Anthony
Anthony
14 years ago

The good ol’ boy network applies everywhere when you talk about government, public relations and politics, not just in Rhode Island. But that’s not what the state needs anyway.
What we’re missing are the high-paying jobs associated with skilled white collar industries such as information technology, biotechnology, engineering, etc.
The state successfully provides tax breaks to specific large companies as an incentive to keep them or attract them to RI. But it fails miserably in creating a business climate that will allow a company to be created and grow in the state. RI appears unable to create a dynamic environmnent where companies and technologies are created.
If a RI company manages to succeed against the odds, there is no incentive for it to stay in RI unless they are able to get company-specific concessions from the state (G-Tech, Fidelity, etc.)
That’s what makes the APC shut down really sad, if it’s true. APC was a homegrown company that grew in RI against the odds.

Ragin' Rhode Islander
Ragin' Rhode Islander
14 years ago

>>But too many of our elected officials lack the spine to get us going in a more productive direction. (Kowtowing is easier when you’re an invertebrate.) I’m curious, though. When it crashes, what are they going to say to all those people they made promises to?
The same thing politicians and collectivists have been doing since time immemorial when the chickens come home to roost: shift the blame by any means possible, typically by creating a scapegoat upon which to redirect the publics blame and anger.
Thus we’ve seen “Jews / Zionists,” “capitalists” and “westerners” (in particular the U.S.) blamed for what has ailed other places (i.e., the failures of dictatorships / communism / fascism – which all ultimately just variations of a collectivist governing model).
Here in RI the Democrats will probably blame the consequences of their actions on the “rich” (perhaps after a stock market decline, which they’ll blame for the unfunded pension liability) … or upon “the Republicans in Washington” … or an economic decline following a terrorist attack.

WJF
WJF
14 years ago

“But as a general proposition, it strikes me as characteristic of Rhode Island to enable policies that drive out the young and the entrepreneurial, while attracting those who will surely be state-dependent.”
Isn’t this the Curley Effect?
http://www.projo.com/opinion/contributors/content/projo_20050319_19coyne.19edfd3.html
or
http://www.economics.harvard.edu/faculty/shleifer/papers/curleyJUNE2003.pdf

SusanD
SusanD
14 years ago

“The probability that Curley would win in Boston was[enhanced by] increasing in the share of poor Irish Bostonians, and decreasing in the share of rich Bostonians of English descent.”
“Unsurprisingly, he tried to turn Boston into a city that would elect him. We call this strategy — increasing the relative size of one’s political base through distortionary, wealth-reducing policies — the Curley effect. But it is hardly unique to Curley. …”
Interesting. So the Dems on Smith Hill aren’t breaking new ground with their bad policies. They’re just trying to inflict them on a larger number of people.

Tom W
Tom W
14 years ago

Irony, thy pull is strong …
Regarding the “Curley Effect” piece in the ProJo: in hindsight it is ironic that it was written by Tom Coyne (creator of the “RIPolicyAnalysis” web site).
My understanding is that Mr. Coyne is leaving (or may already have left) Rhode Island to work elsewhere. While I am not privy to the reason(s) for his departure, I have to believe that (at least in large part) he gave up on Rhode Island and decided that his economic prospects would improve in a place where he wasn’t trying to swim against Rhode Island’s economic tide of stealth socialism (i.e., wealth redistribution) and political corruption.
Knowing what I know now, I very regret that when I got out of college I didn’t exit to the Sunbelt – as most of my high school / college friends did within a few years of graduation – a dynamic that still continues (as we read about in last week’s ProJo).
My advice to any young person with ambition is to get out of Rhode Island and start your career in a business-friendly, low tax clime – it’s hard enough to get established and succeed without having to swim against the aforementioned economic tide of 1930’s industrial age / union class warfare thinking that permeates this state.
Rhode Island is like economic anti-matter to those who have ambition, a work ethic, integrity and just want to pursue the “American Dream.”
The tragedy is that it doesn’t have to be this way. Rhode Island has so much potential: physical beauty, easy proximity to NYC and Boston, etc. All squandered on the alter of the Democrat / union “us vs. them” mentality and the culture of corruption woven into the fabric of the RI Democrat Party.

Rhody
Rhody
14 years ago

It’s the culture of corruption and giving chosen companies huge tax breaks, only to see those companies live up to their end of the bargain (isn’t that what happened with APC?). When other companies don’t receive that tax break, that’s when R.I. gets perceived as anti-business and they run off.
If the powers that be would start thinking about what’s good for the business climate in general instead of just the APCs and GTECHs of the world, we might all be better off. Those policies are what’s really crushing small business (much of which is NOT unionized).

Tom W
Tom W
14 years ago

>>Those policies are what’s really crushing small business (much of which is NOT unionized).
Let’s not forget to distinguish between private sector unionization and public sector unionization.
Private sector unions / unionization is not the problem.
The makeup of organized labor is about to become (if not already) composed of a majority of government employees.
This is largely because unions have shrunk in the private sector – in part because of the unions – as unionized airlines, steel, autos etc. shrink (or cease to exist) in the face of union-free competition.
Meanwhile public sector unionization has grown by leaps and bounds – the script we’ve seen here has also played out elsewhere (particularly in the Northeast and California).
That is, in Democrat dominated states the unions figured out that they could buy / control Democrat politicians and the Democrat Party – via the recycling of (ultimately taxpayer-originated) mandatory dues money from the paychecks of government employees into election campaigns, as well as “in kind” contributions from “union volunteers” – and then behind closed doors stick it to taxpayers and the business community.
Ironically, this dynamic also hurts private-sector unionized workers, as they too must confront the high taxes and reduced job opportunities created by the public sector union – Democrat Party axis … and the private sector union workers kids’ future prospects are equally diminished by the mediocre education that is inevitable in unionized public schools.

WJF
WJF
14 years ago

Tom W,
To play on a famous quote, “Tom Coyne has left the building.” It is true; he is no longer a RI’er. However, it was his intent to stay and fight, but an opportunity he could not turn down took him elsewhere.
But if we think we have it bad now…. wait until the GASBY Rule comes into play. This is the reg that will require all pensions to be funded (will hit the streets in about 1 1/2 years). Considering RI has amongst the highest ratio of unionized workers, and amongst the highest amount of pensions backed by IOU’s, it will hit us harder than most states. We will have 2 choices, raise taxes or cut spending. As individuals our third option would be to run like hell.
If we can get the impending indictments on legislators to hit at the same time as GASBY, maybe we will finally see a changing of the guard at the State House.

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