A SMALL STATE WITH A BIG PROBLEM

By Greg Wood BBC North America Business Correspondent, Cranston, Rhode Island

The Cranston job center is deluged with people looking for work

"If it wasn't for my parents I'd be on the streets with my two kids. It's rough at the moment."

Those words, from mother-of-two Mary Hallam, sum up the plight of many people in the town of Cranston, Rhode Island.

This tiny state has the highest unemployment rate in the US after Michigan. One in ten of the workforce here is without a job.

Mary lost her job as a cashier in a seafood restaurant last October. She and the children get by on $465 (£314) a month in food stamps.

She can't afford her own place, so they have to live with her parents, both of whom are also unemployed.

"My Dad worked at the same company for 25 years", she says, "He paid his taxes. Now he can't even get help from the state to pay for medical care. It's very sad."

Rhode Island, known as the Ocean State, is a mixed bag. Parts of it are very prosperous. The town of Newport is famous for its jazz festival and the mansions built by 19th century barons of industry.

But away from the tourist centres on the coast the story is very different. Rhode Island has been losing manufacturing jobs for years.

Now the financial crisis has caused major shut downs in many other areas of the local economy, from construction to financial services to retailing.

Despite the thick snow on the sidewalks, the labour and training centre in West Warwick, just a few miles from Cranston, is packed with job seekers - at computer screens, in one-on-one interviews, in big groups doing tests.

Many stores have closed down in the area

There used to be pages of job adverts in the local newspaper. Now they're down to a single page, if that. There are four vacancies at a firm which needs jewellery polishers, but not much else.

Marissa Stewart-White is a single mother with a nine-year-old daughter. She lost her job working for a government contractor just before Christmas.

"I have a degree in economics and computer science. I've been working since I was fifteen. However, these are really hard times right now."

The Labour Department here can't cope with the avalanche of new claims for unemployment benefit. In a bitter irony, it's bringing back retired workers and advertising for forty new call centre staff to deal with the backlog.

"We absolutely have a backlog of claims" says Labour Department manager Laura Hart. "We have about 10,000 internet claims and they go back to the beginning of January. We hope to make a dent in it this week".

So, on top of the shock of losing their jobs, many of the people here are having to wait more than a month before they receive their first benefit payment. The system is struggling to cope with the human tide of unemployment.

BBC NEWS REPORT.