State adds jobs in June, but is still a long way from peak employment
by Statehouse News ServiceJULY 21, 2006 -- Massachusetts gained 4,400 jobs in June and raised its May estimate by 800, though the unemployment rate remained at 5 percent, steadily .4 percent above the national numbers, according to figures the state released Thursday.
Despite the employment gains, the rate stayed flat because the labor force grew by 19,800, according the state's Department of Workforce Development. The labor force - defined as the total number of employed and unemployed - has "shown much volatility in recent months," the department said, dropping between February and April and shooting up during the spring, and is up 6,800 from a year ago.
The professional, scientific, and business services sectors gained an aggregate 2,200 jobs in June, and education and health services added 800 jobs. The "super sector" of trade, transportation and utilities tumbled 500 jobs in June, furthering to 1,900 its year-long slide, affected by "slower than usual seasonal" gains in wholesale and retail trade.
"You're seeing that the economy is growing, but there's such a premium on growing productivity on where you can, and such reluctance to hire . . . the businesses where you have to hire more to do more business is where you're seeing the growth," said Andre Mayer, senior vice president for research at the Associated Industries of Massachusetts, a leading employer group.
Despite 2.2 percent growth in the past year, the construction industry lost 300 jobs in June. Manufacturing has inched up 0.2 percent since June 2005, adding 500 jobs last month.
While the state has emerged from the fiscal doldrums that saw cuts to local aid and state services earlier in the decade, its economy continues to trail most of the nation's, having regained about a quarter of the jobs lost in the crisis that started in 2001.
"We're still way down from our peak," Mayer said.
Since December 2003, 55,700 jobs have been added to the state's payrolls, but the US Census Bureau estimates that the Bay State continues to lose population, a finding some political leaders contest.
Policymakers worry about trends pointing to long-term population loss, spurred by the area's high cost of living, and dovetailing with a sluggish job market and high housing prices.
To combat that, the state has passed a pair of "economic stimulus" packages in the last four years, geared toward creating jobs and luring businesses. The bills included incentives for the life sciences and tourism, business-assistance measures that legislators predicted would reap long-term benefits.
Other suggestions for nudging along the economy are either dead or stalled.
Gov. Mitt Romney and Republicans have long called for an easing of the 5.3 percent income tax rate, a move Democratic lawmakers have rebuffed. Romney and business leaders have called for a reform of the state's unemployment insurance laws, but been unable to make progress in the face of opposition from Democrats who fear worker benefits will suffer.
A reform of the state's system for permitting commercial development, intended to streamline and encourage employer investment here, emerged from conference committee just hours after the new jobs data was released.
Associated Industries of Massachusetts said the bill, if passed, would allow Massachusetts to better compete with other states and would "bring fairness, timeliness and transparency to what has historically been a very uncertain process." In the works for years, the bill's prospects now appear better than ever.
Last week's fatal tunnel failure on a downtown highway, leading to shutdowns in key parts of the capital's Interstate system, has also exacerbated concerns about the state's economic future.
On Thursday, Lt. Gov. Kerry Healey met with business leaders to talk about how the closures were affecting businesses and tourism, and Romney ordered the closure of the Ted Williams Tunnel eastbound, which delivers motorists to Logan Airport.
Problems with the Big Dig are particularly worrisome for the state's tourism industry, limiting access to the main airport. Continuing shutdowns and traffic problems could also prove frustrating for the development of the South Boston waterfront, which city planners envision as a fruitful addendum to the downtown area.
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