Massachusetts’ minor miracle: We’re still rich and thriving, despite the last crash
Massachusetts is doubly blessed: Not only are we one of the richest states in the union, but we’re also among the most economically resilient, having bounced back quickly from the recession of 2007-2009.
The Commerce Department on Tuesday released its latest data on the minor Massachusetts miracle, confirming that we remain the second-richest state (behind Connecticut), with an average income of $66,000.
And if the thought of coming in second leaves you feeling bitter toward Nutmeggers, don’t fret. Massachsuetts may soon be number one. As recently as 2009, average incomes in Connecticut were 17 percent higher than in the Bay State. The gap is now half that.
Why are we gaining ground? Because Massachusetts isn’t just rich; we’re also on the economic move.
Since 2013, average incomes in Massachusetts have risen roughly 4 percent per year. Even after adjusting for inflation, that means incomes today are 15 percent higher than before the economy cratered in 2007. Only eight states can boast a better performance.
To give a sense for Massachusetts’ economic strength, consider this chart. It plots average wages and recent growth for every state. Score high on both measures, and you’ll end up in the top-right — precisely where Massachusetts lands.
There is one big caveat. Average incomes tell us nothing about distribution. It’s possible for a state to have a high average incomes and even higher inequality, leaving all economic gains concentrated among the wealthiest families. And we know from other sources that Massachusetts is indeed among the most unequal states.
In this case, though, workers up and down the income ladder seem to be benefitting from our recent growth spurt. Low-wage workers have seen their paychecks grow faster than high-wage workers, partly due to the rising minimum wage.
Whether we can maintain this economic pace is an open question, but over the past decade Massachusetts has proved to be one of the brightest spots in the US economy.
Between the large paychecks, the well-educated workforce, and the explosion of professional fields — from life sciences to software engineering — Massachusetts has made itself an enviable spot for individuals and companies in search of opportunity.