IT’S EASY to feel smug about living in Massachusetts, with its world-class education, innovative economy, glorious landscapes — and now, mild winters! Not for us the over-reliance on low-wage, dead-end burger-flipping jobs like those poor folks in Texas. We’ve got universal health care and the nation’s highest percentage of adults with college degrees. We’re featured in Wired magazine and TED talks. We’re cutting-edge, visionary, progressive.
Well, aren’t we?
The biennial Boston Indicators report released this week by The Boston Foundation contains some hard facts to challenge these rose-colored perceptions. It’s true that Greater Boston is outperforming other major cities, and the nation as a whole, in jobs, economic growth, and innovation. We made some smart bets investing in the education, technology, and health care industries — the “eds and meds’’ that support the local economy and attract research funds and venture capital. Greater Boston now ranks fourth in the number of new patent filings in the world.
But our overall success masks a worrisome — and widening — income inequality, more like Argentina than Arlington. In 2010, the top 5 percent of Boston’s earners held more than 25 percent of the area’s total income, while the bottom 20 percent held only 2.2 percent. The income differences track along racial, ethnic and educational lines: almost 40 percent of Boston’s adult Latino population lacks a high school diploma.
Although Massachusetts has a broad-based tax structure with high deductibles and exemptions for necessities like food and clothing, taxes still fall more heavily on low-income residents than the rich. In 2010, the poorest 20 percent of Massachusetts residents paid 10 percent of their income in all state and local taxes, while the wealthiest 1 percent (those making over $580,000) contributed less than 6 percent.
Exacerbating the trend is the state lottery — basically a kind of voluntary taxation. The top 20 communities in lottery sales — mostly low-income towns like Chicopee and Lynn — contributed $1.25 billion more in 2011 than they got back in unrestricted local aid.
And, as vital as the innovation economy is to the region’s success, it isn’t working for everyone. Some of the region’s hottest sectors, like health care, contain disparities that are obscured by average wage figures. The median annual wage for pediatricians is $155,000, while pharmacy technicians make a median of $32,000. For home health aides, it’s $26,000. Is it a surprise that whites and Asians make up 80 percent of the life sciences sector, and blacks and Latinos make up 74 percent of health care support workers, including home health aides? Happily, several hospitals have “career ladder’’ programs to help their lower-skilled workers move into better jobs. But there is along way to go.
Paradoxically, it is health care — our proudest asset and the region’s largest employer — that also poses the greatest threat to the future. Growth in health care spending is monstrous and on track to double by 2020. Worse, the boom in health costs is coming at the expense of education, the core value of the innovation economy. In the last decade, according the report, state spending on health care grew by 75 percent, while spending on higher education fell 27 percent. “The more the health care sector grows, the more life it drains out of the rest of the Massachusetts economy,’’ wrote Rick Lord, president of the Associated Industries of Massachusetts, on his blog.
The ironies grow thicker: Health care costs are rising while investments in public safety, recreation, public transportation, and the environment are collapsing - all of them key determinants of public health. “We are in a vicious cycle that, if we cannot break it, will break us,’’ said Charlotte Kahn, lead author of the indicators report.
The civic, business, and political leaders gathered for the release of the report had different ideas to pitch: community colleges, green jobs, minority hiring. But they were all equally agog at the estimated $21 billion-with-a-b Massachusetts squanders each year on “unnecessary’’ health care costs, according to the National Academies of Science. We are spending needlessly on paperwork, duplication, and, mostly, on preventable chronic diseases like diabetes and hypertension. Meanwhile, we can’t find $160 million for the MBTA - less than 1 percent of that $21 billion figure.
We’re such a smart state. How could we get that equation so wrong?