Rhode Island’s Economy in Trouble and Ranked Worst in Northeast

Rhode Island is facing big money problems.

A new study by WalletHub says it's the state with the worst economy in the Northeast. It comes in near the bottom for the United States, at No. 45.

So, the trillion-dollar question is: Why is Rhode Island struggling?

According to The Providence Journal, the main reason stems back to Covid-19. When the pandemic hit in 2020, many people lost their jobs. In April 2020, a shocking 18.4% of people were unemployed — the highest ever unemployment rate in Rhode Island's history. The state lost over 100,000 jobs in just a few months.

Things are getting better, but slowly. In June 2024, more people had jobs, but the state still hasn't reached its pre-pandemic job numbers. Some good news: factory and construction jobs are back to normal levels, but many other types of jobs, such as in restaurants and hotels, have yet to bounce back to normalcy.

Another big issue is that Rhode Island, over all, is a tough place to start a business. WalletHub ranked it as the worst state for this. Why? High taxes and expensive office space aren't helping the state's economic position and make it hard for new businesses.

Rhode Island has other long-term problems, too: The population is getting older, and not many new people are moving in. Schools aren't performing well, which makes companies less likely to move here. Lastly, many jobs are low-paying.

Businesses in general are struggling to keep doors open and some have already closed indefinitely.

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The pandemic also showed that some people in Rhode Island make much less money than others and the gap is getting bigger, making it harder for everyone to recover.

Little Rhody was hit hard by the pandemic, and it has other long-standing issues that make recovery tough. Delays caused by the closure of the westbound side of the Washington bridge is only making matters worse. The reality of this situation comes down to the state finding ways to bring back jobs, helping new businesses, and providing more support for its residents.

The states with the five best economies? Washington, Utah, Massachusetts, Texas and California.

Marissa Sebastiao contributed to this report.