Rhode Island’s economy slipped against the rest of the country over the past decade, weighed down by lower-productivity industries and heavy reliance on government spending, according to a new report released Tuesday by the Rhode Island Public Expenditure Council.
RIPEC’s Economic Prosperity Scorecard uses six measures drawn from federal economic data to compare Rhode Island’s performance with the U.S. and other states. The group says the report shows the state’s growth lagged the country sharply between 2014 and 2024, with gross domestic product per capita and labor productivity each growing at less than half the national rate.
Rhode Island ranks 17th nationally in median household income, putting the state in the top half and 2% above the U.S. average. But the report says that picture darkens as the lens widens. The state ranks 23rd in personal income per capita, a broader measure of the resources available to residents, and falls to 36th in real disposable personal income per capita once cost of living and taxes are factored in.
The state ranks 35th in both GDP per capita and labor force productivity, RIPEC says.
For every measure except median household income, RIPEC says Rhode Island’s rank among the states fell between 2014 and 2024. The biggest drops, according to the scorecard, came in labor force productivity, down 14 spots; real disposable personal income per capita, down eight; and GDP per capita, down seven.
“While there are some positive indicators compared to other states, Rhode Island is challenged by modest incomes relative to our neighbors and a relatively high cost of living,” RIPEC President and CEO Michael DiBiase said. “Our economic output is weak, with an over-reliance on lower-productivity industry sectors and on government spending. Most concerning is our economic trajectory — we are losing ground in nearly every measure and particularly with respect to measures of GDP.”
DiBiase said the findings should push policymakers to act with more urgency.
“These findings call for more urgency by policymakers to pursue policies and strategies that stimulate and support economic growth, raise incomes, and lower costs, including taxes,” he said. “We need to retain, grow, and attract more high-growth industries and business investment, improve the education and training of our workers, and make the state more affordable.”
RIPEC says other findings in the report include:
- 20% of Rhode Islanders’ personal income came from government transfers such as Social Security, unemployment, Medicare and Medicaid in 2024, ahead of the U.S. average of 18% and higher than Connecticut at 14%, Massachusetts at 15% and New Hampshire at 16%.
- Rhode Island’s cost of living was 3% above the national average and ranked 14th among states, with much higher utility bills and higher housing and service costs, including health care.
- The state’s real GDP per capita grew 6% from 2014 to 2024, compared with 20% for the U.S.
- Rhode Island ranked first nationally in 2024 for the share of its GDP tied to education services, health care and social services — sectors with relatively low labor productivity.
- The only component of Rhode Island’s GDP per capita to top the U.S. average in 2023 was government expenditures.
RIPEC says Rhode Islanders pay 49% more than the U.S. average for utilities and 5% more for housing.
The full Economic Prosperity Scorecard and a companion 50-state interactive map showing the values and rankings of each metric in 2014, 2019 and 2024 are available on RIPEC’s website at RIPEC.org.
