Business

In Massachusetts, jobs abound but wages lag

“One of the reasons Massachusetts has a high-technology economy,” Alan Clayton-Matthews, an associate professor of economics at Northeastern University said, is because “we got it by attracting employers with our highly skilled labor force.”

David L. Ryan/Globe Staff/File

“One of the reasons Massachusetts has a high-technology economy,” Alan Clayton-Matthews, an associate professor of economics at Northeastern University said, is because “we got it by attracting employers with our highly skilled labor force.”

Massachusetts has largely recovered the jobs it lost during the Great Recession, according to a report by the Massachusetts Budget and Policy Center, a research group in Boston.

But for most workers, that economic growth hasn’t translated into increased wages — with the notable exception of the top 1 percent of earners, whose incomes have grown faster in Massachusetts in recent decades than in any other state in the nation.

Advertisement

“The good news is our economy is recovering from the Great Recession,” said Noah Berger, president of the research group, which focuses on low-income residents. “We’ve had strong job growth, and more people are entering the workforce. But we’re not seeing strong wage growth, and the focus in economic policy should be in how to translate that job growth into higher wages.”

Berger and his colleagues analyzed data from federal and state agencies. They found that the Massachusetts labor force has grown by 3.2 percent so far this year, outpacing any other state’s, and that it has added nearly 300,000 jobs since the Great Recession, for a total of 3.6 million as of July. That compares with the prior peak of 3.3 million, just before the economy tanked in 2007.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

For nearly a decade, the state’s unemployment rate had remained below the US average, but as the number of jobs nationwide steadily increased in recent years, the gap narrowed. In July, the rate was 4.3 percent, statewide and nationally.

Most Massachusetts residents who want a job have one, but earnings have stagnated, if not receded. Middle-class wages before the recession averaged $22.33 per hour but in 2016 stood at just $22.60, after adjusting for inflation.

That stands in contrast to the top 1 percent of earners, whose incomes continue to grow by an average of 4.3 percent annually, according to the report.

Advertisement

Another key finding is that education has a strong effect on earning potential. The workforce in Massachusetts narrowly edges out New Jersey’s as the most educated in the nation, and workers in the state who hold bachelor’s degrees earn nearly twice as much as those with only high school diplomas.

Alan Clayton-Matthews, an associate professor of economics at Northeastern University who reviewed the report before its release, agreed with its findings and encouraged policy makers to continue to invest in the education system as an engine of economic growth.

“To the extent that a labor force is highly skilled, the jobs will come and prepare opportunities for them,” Clayton-Matthews said. “That’s one of the reasons Massachusetts has a high-technology economy. We weren’t born with it. We got it by attracting employers with our highly skilled labor force.”

An organized labor force can also be effective using its leverage to win higher compensation. A separate report published this week by researchers at the University of Massachusetts Amherst said members of labor unions in the state earn nearly $4 more per hour than nonunion workers.

But Berger said government intervention is sometimes necessary to secure the well-being of vulnerable populations. Wage hikes for Massachusetts’ lowest-paid workers since the early 1990s have come only because of increases in the state’s minimum wage.

“At the state level, there are limited options available,” Berger said. “But there are things that the state could do. The first step is to acknowledge that with state economic policy, we should be thinking about how to raise wages for ordinary working people, and to see all problems through that lens.”

Jon Christian can be reached at jonathan.a.christian@gmail.com.
Loading comments...
Real journalists. Real journalism. Subscribe to The Boston Globe today.