When she was younger, Carolyn Rafaelian used to work in her dad’s jewelry factory as punishment if she misbehaved. Now, she and her sister run it.
“I love that factory smell,” she says, walking onto the factory floor. To her left are rows of waist-high cabinets, their drawers filled with beads. Some are yellow and orange like candy corns, others pink as grapefruit. To Rafaelian’s right, women sit at long tables, each working on a different task.
Her dad started this factory in 1966, when Rhode Island was considered a global capital of jewelry manufacturing. During the 1980s, the state produced an estimated 80 percent of costume jewelry made in the U.S.
Much of that business has now moved overseas, but not Rafaelian. Instead of selling to wholesalers, who’d sell to stores, as her father had, Rafaelian launched her own line of jewelry called Alex and Ani, which specializes in thin metal bangles strung with charms. By 2009, the factory was making Alex and Ani products exclusively. In 2013, annual revenue hit $230 million (the company no longer releases revenue data).
“This is what you can’t find in China or anywhere else in the world, archives of stones,” Rafaelian says. “The sizes the shapes, the settings. They don’t even make this stuff anymore.”
Rafaelian insists that she can’t make her products in China — that part of their appeal is their story and their Rhode Island origins.
“There’s machines that would do it automatic, but that would probably take away 15 jobs, 20 jobs,” she says. “I like it this way. Everything’s being touched.”
But where she’s thrived, many other companies have folded. Rhode Island’s manufacturing sector, already struggling before the recession, is one reason economists believe the country’s smallest state has been one of the hardest hit by the economic downtown, as well as one of the slowest to return to pre-recession employment levels.
“Rhode Island’s manufacturing sector has essentially been cut in half in the past couple of decades,” says Gina Raimondo, Rhode Island’s governor. “We lost more than 80,000 manufacturing jobs.”
Governor Raimondo is just a couple months into the gig and very, very aware of the big structural problems her state’s economy faces. Like Rafaelian, Raimondo's dad also worked in the jewelry industry.
“My father made his career at the old Bulova watch factory in Providence,” she says. “At one time, Bulova employed over a thousand people. Those jobs are not coming back. My dad’s manufacturing, that is gone and I don’t see that coming back to America, much less Rhode Island.”
The jewelry and textiles and other labor-intensive products that Rhode Island historically made were more vulnerable to competition from China than other states, says Mary Burke, a senior economist with the Federal Reserve Bank of Boston who recently published a paper on Rhode Island's recession and recovery.
She says by 2000, “the manufacturing sector was doing very poorly and in a lot of ways, that was hidden by the housing boom because the housing boom was creating jobs in construction and retail, [as well as] boosting spending in a lot of other things.”
As the housing boom turned into a housing bubble, the national economy suffered. Burke says the impact was magnified in Rhode Island because it had larger housing price increases during the boom years and deeper declines during the bust than other states in the region.
During the recession, the state began earning the wrong kind of superlatives – its job losses were the worst in the region and it’s still 3.4 percent below its pre-recession peak in 2006. It had highest unemployment rate in the country for parts of 2013 and 2014.
But Burke says state’s economy is gradually recovering.
“It’s not going to happen overnight,” Raimondo says. “The decline has been over decades and it’s going to take time to turn the ship.”
To help make that turn, Raimondo recently proposed wide-ranging jobs plan, including everything from initiatives that seek to streamline the cost of doing business in the state to a new tourism campaign. She also wants manufacturing to play a role in the state’s future, but thinks the state needs to transition into high-tech manufacturing with better-paying jobs, even though she knows Rhode Island residents may not currently have the skills fill those positions. Another feature of her plan? Training programs — both for the jobs the state already has and the ones it hopes to create.
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