Massachusetts, Technology, and a

Changing Workforce

Mark Melnik, Ph.D.

October 25th, 2018

Presentation Outline

• The Massachusetts economy is growing

• This is a unique period of sustained growth

• Cutting edge, knowledge based industries (e.g. tech, bio, etc)

• Educated workforce

• Foreign-born labor

• This growth is not felt the same throughout the state

• Geographically and demographic disparities

• Challenges to long term growth going forward

2

3

PopulationTotal Population Growth by State, 2010-2017

Source: U.S. Census Bureau, Population and Housing Unit Estimates, April 1, 2010 to July 1, 2017, NST01 Table 1. Annual

Estimates of the Resident Population for the United States, Regions, States, and Puerto Rico

-1%

0%

1%

2%

3%

4%

5%

6%

Per

cen

t C

han

ge

4

EmploymentTotal Nonfarm Employment by State 2010-2018, Seasonally adjusted

Source: U.S. Bureau of Labor Statistics, Current Employment Statistics; UMDI analysis.

Note: 2018 is a 8-month, January-August, average.

0%

2%

4%

6%

8%

10%

12%

14%

16%

Per

cen

t C

han

ge

5

EmploymentTotal Nonfarm Employment, Massachusetts and the United States, January 2000-September

2018, Seasonally adjusted

Source: U.S. Bureau of Labor Statistics, Current Employment Statistics; UMDI analysis

MA 1.12

U.S. 1.14

0.9

0.95

1

1.05

1.1

1.15

1.2

Emp

loym

en

t G

row

th (

1.0

0=2

00

0)

6

UnemploymentUnemployment Rates, Massachusetts and the United States, January 2000-August 2018

Source: Massachusetts Executive Office of Labor and Workforce Development, Local Area Unemployment Statistics

MA, 3.6%

U.S., 3.9%

0%

2%

4%

6%

8%

10%

12%

Un

em

plo

yme

nt

Rat

e

7

Components of Population Change in

Massachusetts

Change in Massachusetts Population, 2010-2017

Component of Change

Absolute Change

Percent Change

Rank among States,

Absolute Change

Rank among States, Percent Change

Total Increase 312,011 4.8% 14 25

Natural Increase 122,717 1.9% 23 39

Net Migration 193,318 3.0% 13 17

International 292,266 4.5% 6 3

Domestic -98,948 -1.5% 41 33

Source: U.S. Census Bureau, Population and Housing Unit Estimates, April 1, 2010 to July 1, 2017, Table NST-EST2018-02:

Cumulative Estimates of the Resident Population Change for the United States, Regions, States, and Puerto Rico

8

Top 10 States by Educational Attainment

Percent of Population 25 Years or Older with a Bachelor’s Degree or Higher

Rank 2017 State Percent

1 Massachusetts 43.4

2 Colorado 41.2

3 Maryland 39.7

4 New Jersey 39.7

5 Connecticut 38.7

6 Virginia 38.7

7 Vermont 38.3

8 New Hampshire 36.9

9 Minnesota 36.1

10 New York 36.0

Source: U.S. Census Bureau, American Community Survey, 2017 1-Year Estimates

9

Source: UMass Donahue Institute calculators based on CyberStates and U.S. Bureau of Labor Statistics

Knowledge-based Industries are Driving Job

Growth in the State

Percent change in jobs by major sector, Massachusetts 2009-2016

10

Massachusetts’ High-tech Rank

Source: Milken Institute Center for Jobs and Human Capital, http://statetechandscience.org/statetech.taf?page=state-ranking.

*North Carolina and Massachusetts were tied for fifth place in Technology Concentration and Dynamism.

Massachusetts’ Ranking among Other High Tech States

2016

Rank

Research and

Development

Inputs

Technology

Concentration

and Dynamism

Technology and

Science

Workforce

Composite

Score

1 Massachusetts Maryland Maryland Massachusetts

2 Maryland California Massachusetts Colorado

3 Colorado Colorado Colorado Maryland

4 New Hampshire Texas Minnesota California

5 California Massachusetts Washington Washington

6 Delaware North Carolina* Utah Connecticut

7 Washington Virginia California Minnesota

8 Connecticut Washington Virginia Utah

9 Pennsylvania Georgia Alaska Virginia

10 Rhode Island Connecticut Connecticut Delaware

Top 10 States by Components of State Technology and Science Index

Massachusetts Industry Rankings

• Boston #1 - Top Life Sciences Cluster (Jones Lang LaSalle)

• Boston #1 - Innovation that Matters (U.S. Chamber Foundation)

• Boston #9 - World Financial Center (Economist Intelligence Unit)

• Boston #9 - Overseas Visitors (U.S. Department of Commerce)

• Mass. #1 - Most Innovative State (Bloomberg)

• Mass. #1 - State Technology and Science Index (Milken Institute)

• Mass. #1 - State Competitiveness Report (Beacon Hill Institute)

• Mass. #1 - Tech Industry Concentration (CyberStates)

11

12

Massachusetts Population Growth 2010-2017

Source: UMDI mapping analysis, U.S. Census Bureau, Population Division, April 1, 2010 to July 1, 2017, Annual Estimates of

the Resident Population

State average: 4.8%

13

Greater Boston Cities Underlie the

Commonwealth’s POPULATION Growth

Source: U.S. Census Bureau; UMDI analysis

Greater Boston,

1.09

Rest of MA, 1.04

United States, 1.05

0.98

1.00

1.02

1.04

1.06

1.08

1.10

2010 2011 2012 2013 2014 2015 2016 2017

Po

pu

lati

on

Gro

wth

Ind

ex,

20

10

=1.0

0

14

Source: UMDI mapping analysis, Bureau of Labor Statistics (BLS), 2010 to 2017 Quarterly Census of Employment and Wages

(QCEW)

Massachusetts Employment Growth 2010-2017

State average: 12.5%

15

Greater Boston Cities Underlie the

Commonwealth’s JOBS Growth

Source: U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of

Employment and Wages; UMDI analysis

Greater Boston, 1.17

Rest of MA, 1.11

United States, 1.13

0.95

1.00

1.05

1.10

1.15

1.20

2010 2011 2012 2013 2014 2015 2016 2017

Emp

loym

ent

Gro

wth

Ind

ex, 2

01

0=1

.00

16

Industry Mix by Employment

Share of Employment by Industry in Massachusetts Compared to the U.S., 2000 and 2015

Source: U.S. Census Bureau, County Business Patterns; UMDI analysis

Health care and social assistance,

Greater Boston

TechGreater Boston

Professional, scientific & technical servicesGreater Boston Educational services,

Greater Boston

Finance & insurance,

Greater Boston

Information, Greater Boston

Management of companies & enterprises,

Greater Boston

Health care and social assistance,

Rest of State

Tech, Rest of State

Professional, scientific & technical services,

Rest of State

Educational services, Rest of State

Finance & insurance

Rest of State

Information, Rest of State

Management of companies & enterprises, Rest of State

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00

Ch

ange

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t, 2

00

0-2

01

5

Location Quotient (LQ)

Weak & DecliningLQ < 1Employment Change < 0%

Weak & GrowingLQ < 1Employment Change > 0%

Strong & Growing LQ > 1Employment Change > 0%

Strong & Declining LQ > 1Employment Change < 0%

17

Building Permits

Source: U.S. Bureau of the Census, Building Permits Survey; UMDI analysis

Note: Data represent reported data plus the data imputed for non-reporters and partial reporters. The Boston-Cambridge Region

consists of Suffolk and Middlesex counties.

Total Housing Permits by Region, 1990-2017

18

Unemployment by Educational Attainment

Level

Less Than HS Diploma, 8%

HS Diploma/GED, 5%

Some College, 4%

Bachelor's or Higher, 3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2010 2011 2012 2013 2014 2015 2016 2017

Un

emp

loym

ent

Rat

e

Population in Massachusetts 25 Years and over, 2010-2017

Source: U.S. Census Bureau, American Community Survey, 2017 1-Year Estimates; UMDI analysis

19

Unemployment by Race

White, 3.9%

Black, 7.3%

Asian, 4.0%

Hispanic, 6.7%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2010 2011 2012 2013 2014 2015 2016 2017

Un

emp

loym

ent

Rat

e

Source: U.S. Census Bureau, American Community Survey, 2017 1-Year Estimates; UMDI analysis

Population in Massachusetts 25 Years and over, 2010-2017

Policy Issues Facing Massachusetts

• The Innovation Strategy

• Cost of housing

• Aging population

• Attracting and retaining young workers

• Investment in public education

• Infrastructure

• Uncertainty of federal policy

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UMass Donahue Institute

Economic & Public Policy Research

100 Venture Way, Suite 9

Hadley, MA 01035

(413) 545-0001

MMelnik@donahue.umassp.edu

www.donahue.umassp.edu