MassINC and Northeastern University’s Center for Labor Market Studies have released a report, "The Labor Supply and Our Economic Future" (PDF), about the Massachusetts workforce. News about the report’s release reached the pages of the Springfield Republican and those of the Worcester Telegram & Gazette, among other papers.
The key findings (PDF) show two major trends for the state: on one hand, Massachusetts can boast the second-highest out-migration in the country (New York’s is higher) of "young, well-educated managers and professionals" in the knowledge economy. And on the other hand, the state is seeing men opting out, "especially those with limited education," who are "neither working nor actively looking for work." Regarding the first trend, from MassINC:
The challenge for policymakers is twofold. Strategies to boost job creation are central to stem the future flow of out-migrants. Policymakers should also make it as easy as possible for people to put down roots in our state, by paying particular attention to affordability and quality-of-life issues.
Regarding the second:
[The] withdrawal [of men with limited education in their prime working years] has contributed to steep declines in the earnings of men without advanced degrees and has also led to rising income inequality in the state. A comprehensive strategy to retrain people for the New Economy, preferably before they lose their jobs, is needed. The human, fiscal, and economic costs of not doing so are enormous.
The study notes that these changes affecting men "appear to be the most severe in the state’s large urban centers, such as Boston, Springfield, Lawrence, Fall River, and New Bedford."
An overall challenge in the state is high labor underutilization rates. "Being in the labor force does not guarantee that a worker has a job, is able to work his/her desired hours of work, or fully utilize their skills on the job," the study says. A whole series of consequences emerges from underutilization. From the study:
[High underutilization rates] reduce the amount of labor that enters the production process, thereby reducing the level of real output of goods and services in the state economy. By reducing both paid hours of work and hourly wages for some groups, they reduce the aggregate earnings of workers, and the average levels of household and family incomes. The lost labor time reduces the work experience of the unutilized and underutilized, thereby reducing their future productivity and wages.
Lower wage and salary incomes reduce state income taxes and state sales tax receipts. Less employment and lower earnings increases the number of persons receiving cash and in-kind transfers from the federal and state government, including unemployment insurance benefits, TANF benefits, Supplemental Security Income for the disabled and aged, food stamps, rental subsidies, and Medicaid benefits. Higher levels of unemployment are also associated with a greater incidence of mental depression, physical health problems, social isolation, and unhappiness.
At times I have wondered how my neighbors can get by smoking marijuana seemingly all day long. I’ve wondered if they receive subsidies to make it possible, and how deep their depression runs. Even if they are dealing drugs, I can’t imagine it earns enough to pay all the bills. Then again, I’ve never tried drug dealing to know.
I have, however, been on WIC and state subsidies, and I know it’s not much for scraping by on, and how it hurts at first to earn just enough not to qualify anymore. Add the factor of a cruddy job market, and/or few marketable skills, and it may seem like the better part of wisdom to stay poor, to say nothing of drug use as an escape. People in my neighborhood spend a lot of time not sober, and we’d have a more productive community if more people stayed straight more of the time.
In February, my husband was laid off from a job that had, two years prior, opened the way for our first home purchase. After a few months of fruitless searching locally, successfully avoiding substance abuse in the interim, he found work based in Connecticut at a sports Web site start-up, which launched in September. The suburban office-park job is a little under an hour’s commute from our urban home. The incentives to stay continue to dwindle even as Springfield is starting to look up. The region simply doesn’t offer our primary bread-winner steady work.
Living in a city has its benefits, and one of them is that it can cut down commute time. We like to live and work in the same place. I like the walkability, the ethnic and cultural diversity, the amenities and a denser environment that can tend to bustle more than the suburbs or the countryside. Less reliance on the car is a great thing: get exercise and save money.
The list of city-life benefits goes on and on. But what do you do when you can’t find work there, either because you’re overqualified, or your skills don’t match at all with the new economy? What do you do when the city’s primary industry seems to be deprivation maintenance?
On a bright note, this week’s Business West includes a cover feature by George O’Brien on the region’s economic outlook, where "relative stagnancy is better than some regions have experienced." Robert Nakosteen also wrote a supplemental piece for the issue on the subject.
