Tuesday, September 5, 2017

MassBudget: What is the state of working Massachusetts?

 Massachusetts Budget and Policy CenterDemocracy.

New Study Finds MA Workers Joining Labor Force Faster Than Any Other State, Amid Strong Job Growth but Flat Wages

On this Labor Day there are some very positive signs in our economy, but our State of Working Massachusetts report finds that rapid job and labor force growth isn't leading to strong, broad-based wage growth. Our labor force has grown faster than any other state in 2017 - increasing 3.2 percent. Massachusetts has added close to 300,000 jobs since the start of the Great Recession in 2007. That's 9 percent job growth - among the highest rates of job growth in the country over that time.

While our economy is growing, we are not seeing strong wage growth for most workers. This continues a long-term trend in Massachusetts and in the United States: economic growth is not translating into wage and income growth for most workers and their families. Since 1979, median household income in Massachusetts has barely budged, growing only half a percentage point each year after adjusting for inflation. By contrast, among the highest-income one percent of households, income has risen by 4.3 percent annually. This is a national pattern, but it is particularly pronounced in Massachusetts. In fact, household income among the highest-income one percent has grown more rapidly in Massachusetts than in any other state: 341 percent between 1979 and 2014 (the most recent year for which data is available). Ten percent of all Massachusetts income went to the highest-income one percent of households in 1979. In 2014 it was 25 percent.

After years of stagnation and decline, we have seen strong growth in the wages of low-wage workers in Massachusetts over the last two years. After declining by almost 10 percent between 2008 and 2014, wages among the lowest-earning 10 percent of workers have increased by 8 percent since the state's minimum wage was increased by a dollar each year in 2015 and 2016.

Another bright sign in the data is that Massachusetts has the best educated workforce in the nation. In fact, in 2016 Massachusetts became the first state ever with 50 percent of its workforce holding a four-year college degree. Across the nation, the states with well-educated workforces consistently have stronger economies than those with less well-educated workforces. Massachusetts and New Jersey have the best educated workforces in the nation and workers in those states earn the highest wages. While that strength alone hasn't led to wage and income growth for all of our workers - a goal that likely requires improvements in the national economy, along with changes to state and federal policy, to achieve - it has put us in a strong position for our state economy to outperform the rest of the nation.

Read MassBudget's new State of Working Massachusetts 2017 report. 

The Massachusetts Budget and Policy Center (MassBudget) produces policy research, analysis, and data-driven recommendations focused on improving the lives of low- and middle-income children and adults, strengthening our state's economy, and enhancing the quality of life in Massachusetts.

BOSTON, MA 02108
Massachusetts Budget and Policy Center, 15 Court Square, Suite 700, Boston, MA 02108

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