UMass Economist: State’s Recovery Strong, But Tentative

Goodman Outlines Spotty Jobs Growth, Climate Change Dangers At Middlesex Bank Annual Breakfast

Michael Goodman, executive director of the Public Policy Center at UMass Dartmouth and co-editor of the economic journal “MassBenchmarks,” illustrated the current strengths and potential storm cloud” on Massachusetts’ economic horizon during a presentation at Middlesex Bank’s 2015 Economic Breakfast last week.

He was joined afterward by Thomas Alperin, president and founder of real estate management firm National Development, Daniel Kenary, CEO and co-founder of Harpoon Brewery and Christine Schuster, president and CEO of Emerson Hospital in Concord, who gave insights into the challenges of their respective fields in a panel session.

In the context of the national economic situation, Goodman said that there is “a lot to be positive about,” especially in the private sector, where profitability has “come roaring back” since the Great Recession. This is in addition to a national budget that has returned to a normal level of deficit spending, and American consumers who have rediscovered the confidence to invest money in the economy rather than cutting spending entirely.

Massachusetts, Goodman said, is at its strongest level of job growth of the century. This, combined with the tight regulations on housing construction that prevented the severe overbuilding seen in many other states, has put Massachusetts among the healthiest overall economies currently.

However, Goodman warned that the “rising tide” of the state’s economic growth “is not lifting all boats,” describing the expansion as “regionally imbalanced” outside the Hub.

“There are many people who have continued to be left behind,” he said, with unemployment rates in certain parts of the commonwealth still sitting several percentage points higher than state and national averages. Springfield and Lawrence, for example, both sit at 8.8 percent unemployment as of August (nearly double the state average), with Fall River, New Bedford and Holyoke falling about a point below that. All things considered (including the underemployed and those who have left the job market altogether), the real statewide unemployment rate is around 10 percent.

The regional imbalance of economic strength is not new, Goodman said, “but it’s certainly become more pronounced in recent years.”

Goodman also pointed to the need for an overhaul of the state of transportation and infrastructure in Massachusetts, but noted that it will take a great deal of public investment.

“Clearly the system could be managed a bit better,” he said. “I think that’s the understatement of the century.”

Goodman’s comments come on the cusp of a winter for which the MBTA has been busily preparing, and just months since the appointment of a new MassDOT secretary who has called for a revolution in how her organization does business.

Regarding housing in Massachusetts, Goodman said appropriate development is stymied by strict and “archaic” land use and zoning laws, which, despite providing some stability during the volatile economic times of years past, make it “very difficult for developers to respond to market demand.”

By Goodman’s estimates, the state would need to create almost 30,000 new housing units by 2020 in order to reach the necessary levels to sustain a healthy workforce.

Finally, Goodman illustrated a long-term but pressing issue; the need for Massachusetts to make serious preparations for the impacts of climate change, particularly in Boston, which could end up underneath as much as six feet of water in vulnerable areas (Back Bay included) if a storm of the magnitude of 2012’s Hurricane Sandy hit the city directly.

Alperin, Kenary and Schuster followed up Goodman’s presentation by providing their perspectives on operating in Massachusetts:

  • Alperin discussed an “inability to invest in ourselves” in Massachusetts in regards to housing. An increase in affordable housing, especially in Gateway Cities, will be necessary to sustain a strong labor force, he said.Schuster said that the biggest of all health care issues on the horizon is the cost of senior and end-of-life care, which presents unique challenges in medicine, transportation and housing, and which has not received adequate airtime in the current health care debates. Additionally, she said that tort reform is a key means of bringing down costs and enhance quality of care for all, since “many of our doctors have to practice defensively.”
  • Kenary offered a challenge to the heavy emphasis on completing the college pipeline, describing a lack of “celebration” of skilled, blue-collar trade workers who do not attend college, but rather a vocational or trade school. His Boston location has struggled to keep a consistent workforce, he said, because of the lack of these skilled workers in the area, and the expensive residential and transportation situation of the city.

Tags: , ,

UMass Economist: State’s Recovery Strong, But Tentative

by Joe Kourieh time to read: 3 min