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Mass. Jobless Rate Drops to 8.8%
By Robert Gavin, The Boston Globe
December 18, 2009
The Massachusetts unemployment rate fell in November for the second straight month, adding to evidence that the state's economy has begun a recovery and the struggling job market is nearing a bottom, analysts said.
The state's jobless rate slipped to 8.8 percent, following a sharp drop in October, when it plunged nearly a half-point to 8.9 percent, the state Executive Office of Labor and Workforce Development reported yesterday. The national unemployment rate fell to 10 percent in November from 10.2 percent in October.
The state's job market, however, remains weak. Massachusetts employers sliced payrolls by another 1,700 jobs in November, with the heaviest toll in retail, personal services, real estate, and government. Still, two sectors that increasingly drive the state's economy posted strong gains. Education and health services added 3,100 jobs, while professional and business services, which include technology, scientific, and research firms, added 1,200 jobs.
"The downward trend in unemployment, and the fact that we're seeing growth in some of our most important industries, is good news," said Nancy Snyder, interim secretary of Labor and Workforce Development. "We're not out of the woods yet, but it's hopeful."
Trends in unemployment and payroll jobs can diverge because they are based on separate surveys by the US Labor Department. Payroll employment estimates come from a survey of businesses. The unemployment rate is estimated from a survey of households. The household survey also captures a broader swath of labor market by including workers, such as independent contractors, who don't show up on payrolls.
Many analysts had expected the state's unemployment rate to rise again after October's sharp drop, and were surprised by November's decrease. If the rate declines for a third month, it could indicate that the most dismal forecasts were off, according to Elliot Winer, an independent economist in Sudbury.
The New England Economic Partnership, a nonprofit forecasting group, recently projected that state's unemployment rate would peak at 9.6 percent around mid-2010.
"If it goes down in December," Winer said, "you might be able to say the worst is over."
Other data suggest the worst may already be over for the Massachusetts economy, said Alan Clayton-Matthews, an economics professor at Northeastern University. State withholding taxes have increased in each of the past two months, a sign that employers, if not hiring, are at least increasing hours for workers. Massachusetts exports have risen more than 20 percent since April.
Several indicators, such as growing worldwide semiconductor sales, point to an improving technology sector.
In addition, two of the hardest hit industries posted job gains in November. Manufacturing added 900 jobs, the first monthly gain in nearly three years. Construction, which has lost one in five jobs since the beginning of the recession, added 200 jobs, the second consecutive monthly gain.
"The unemployment rate was rising sharply, and now it's leveling off," said Clayton-Matthews. "It's consistent with an economy that has bottomed out, and a labor market that is getting near the bottom."
Most economists expect a long climb back. More than 300,000 Massachusetts residents are still unemployed, and many more are underemployed or no longer looking for work. Only those who actively seek work are counted as unemployed.
More than 15 percent of Massachusetts workers were unemployed, underemployed, or no longer seeking work in November, compared with about 17 percent nationally, according to the US Labor Department.
As a result, consumers continue to curb the spending on which some industries rely. Massachusetts retailers shed 1,700 jobs in November. Real estate firms cut 1,300 jobs. Leisure and hospitality, which include hotels and restaurants, shed 200.
"The worst of the employment declines might be behind us," said Michael Goodman, an economic analyst and professor of public policy at the University of Massachusetts-Dartmouth. "But the impact of consumers' retrenchment is evidence that we're not there yet."
Hub Homes Regaining Value
By Thomas Grillo, The Boston Herald
December 9, 2009
Boston area home values soared by $23 billion this year, the biggest increase nationwide according to a new study.
In a survey of 154 markets tracked by Zillow.com, four dozen regions, including Greater Boston, bucked the trend of falling home values. Providence followed a close second with a gain of $12.4 billion.
Nationwide, homeowners lost $489 billion in home values during the first 11 months of 2009, significantly less than the $3.6 trillion lost during 2008, Zillow found.
The biggest home value losses in total dollars were in Los Angeles where values fell $60.8 billion, Chicago, which was down $49.6 billion, and New York, where values fell by $49 billion. The large overall losses were due to a combination of the high number of homes in these metro areas, along with decreases in median home values, the study found.
Alan Clayton-Matthews, a Northeastern University professor, said Bay State median home prices have been growing since March of this year, up 9 percent.
"We didn't have the speculative building in Massachusetts like some other parts of the country," he said. "Our housing slump began earlier than the rest of the nation and it appears there has been a turnaround in the residential market."
State Employers' Confidence Rises
By Jon Chesto, The Patriot Ledger
December 2, 2009
BOSTON – Massachusetts employers' confidence levels have risen in eight of the past nine months in a reassuring trend that offers more evidence that the state's economy is finally beginning to improve.
However, only 3 percent of respondents said they thought the recession is over in the latest poll of about 150 business leaders conducted by Associated Industries of Massachusetts for its business confidence index.
The index rose from 43.3 in October to 44.9 last month, its highest point since September 2008. The confidence index still fell short of the breakpoint of 50 that separates indications of an overall positive mood from a generally downbeat mood. The index has rebounded somewhat from its all-time low of 33.3 in February.
Andre Mayer, senior vice president for research at the employer group, said the steadily rising confidence levels this year indicate that the economy's health isn't worsening, even if most Massachusetts business leaders still don't believe that the economy is growing yet. In particular, the respondents were most upbeat about the prospects from their own companies.
"It's been a long slow climb to this point, and it seems like we have a long slow climb ahead of us," Mayer said. "In the absence of any drastic shock from the outside, it appears we're on our way to rebuilding."
Alan Clayton-Matthews, a public policy professor at Northeastern University, said he expects that the state's economy will begin to grow again sometime by the end of the year, if it hasn't begun expanding already. Employment growth, however, will lag behind: Broad job growth isn't expected in Massachusetts until late next summer.
Clayton-Matthews said the latest business confidence index results confirm those projections and similar economic data that he has tracked.
"All this is consistent with the economy now being at the bottom, either turning, just having turned or just about to turn," Clayton-Matthews said. "If the turnaround hasn't started, it's close to starting."
Clayton-Matthews said it has become increasingly unlikely that the state will fall into the dreaded "double-dip" recession – in which the economy begins to grow, only to fall back into a recession again.
"It looks like we're at the bottom and anything can happen," Clayton-Matthews said, "(but) I suspect that direction that we're headed is up now, not a double dip. … As long as we're seeing improvement, I think the chances of a double dip get less."
State Jobless Rate Declines, Bucking Trend
By Robert Gavin, Boston Globe
November 20, 2009
The Massachusetts unemployment rate dropped last month for the first time in two years, and job losses slowed – signs the state's beleaguered job market may be stabilizing.
Bucking a national trend, the state's jobless rate fell to 8.9 percent in October, down from 9.3 percent in September, the state Executive Office of Labor and Workforce Development reported yesterday. Unemployment in Massachusetts had not fallen since June 2007.
"The only way you can read this employment report is as good news," said Alan Clayton-Matthews, a Northeastern University economics professor. "You need to take monthly data with a grain of salt, but the fall is so dramatic that it's likely things are improving in the labor market."
Governor Deval Patrick also hailed the decline in the jobless rate as good news but acknowledged that "8.9 percent is high."
"There are still families struggling. We have a lot of work to do," Patrick said in an interview. "But I'm cautiously optimistic. This suggests the job market is stabilizing."
Economists, however, cautioned that one good month doesn't necessarily signal a turnaround in the job market. The unemployment rate could rise again in the next month. It usually requires several months of data to get a clear picture of the economy's direction. For now, analysts expect more job losses and higher unemployment into next year.
Still, the October employment report represents a dramatic improvement from September, when employers slashed 9,300 jobs. Last month, job losses slowed to just 900 statewide.
The diminishing job losses are consistent with an economy that is beginning to turn around, analysts said. Fueled by low interest rates and federal stimulus money, businesses are increasing production.
Employment, however, frequently lags production because firms tend to hire cautiously until they become confident that the recovery will last.
Some signs point to an increase in hiring the Bay State, analysts said. Day-care employment, for example, has risen in each of the past four months, suggesting that more people are going back to work.
Temporary employment has increased for six consecutive months. Economists consider temporary hiring to be a leading job market indicator because as business first improves, firms often use temps.
"They're not ready to make the leap to permanent hiring," said Elliot Winer, an independent economist in Sudbury, "but employers are starting to think about expanding and bringing back people."
Certainly, the state's labor market remains weak, as many sectors continue to struggle. Manufacturing shed another 2,300 jobs in October, bringing job losses over the past year to nearly 18,000, or 6 percent of employment.
Real estate employment, down 15 percent over the year, fell by another 800 jobs last month. Retailers shed 700 jobs. State and local governments cut 800.
But much of those losses were offset by strong gains in two of the state's most important sectors: education and health services, as well as professional, scientific, and technical services. Each sector added about 1,500 jobs last month.
Even construction added 100 jobs, the industry's first monthly gain since February. Construction has been hit hardest by the downturn, shedding 1 in 5 jobs since the recession begin in March 2008.
Massachusetts has lost 125,000 jobs, or just under 4 percent of employment during this recession. So far, though, the state has fared better than the nation, which has lost more than 5 percent of employment.
In recent months, it appeared the state might recover sooner than the nation as whole, but September's steep job losses, coupled with sharp declines in income, led economists to downgrade their expectations. Clayton-Matthews, the Northeastern economics professor, recently projected the state would lag the nation by three or four months.
"September was really bad, but October's data is consistent with a labor market that is getting better," Clayton-Mathews. "If it continues, I'll have to revise my forecast again."
Jobs Scene Looks Up
By Jay Fitzgerald, Boston Herald
November 20, 2009
The Massachusetts economy continued its roller-coaster ride last month as the state's jobless rate plunged to 8.9 percent after lurching upward to 9.3 percent in September.
October's decline was the first time since June 2007 that the jobless rate has fallen in Massachusetts – and the decrease left economists scratching their heads.
Some said the drop could be a statistical aberration caused by complex and sometimes contradictory data compiled by government officials.
"It's still a very bad number," warned Andrew Mayer, research director for the Associated Industries of Massachusetts, referring to the 8.9 percent jobless rate.
He also noted that a separate payroll survey showed that the state lost 900 jobs last month.
The two surveys can often be at odds, frustrating analysts.
The jobless-rate survey is conducted by the U.S. Labor Department and U.S. Census. The payroll survey is jointly conducted by federal and state officials.
Alan Clayton-Matthews, an economist at Northeastern University, joked he was getting "whiplash" from all the different signals the state's economy has been sending lately. "It's gone from good to bad to ugly, and then back to good," he said of recent economic figures.
But he said the jobs data released yesterday can only be viewed as positive, since it reflects slightly increasing tax revenues collected last month by the state.
He also noted that total employment figures are up in Massachusetts, while the number of estimated unemployed residents has declined.
Michael Boyd, an executive recruiter in the Boston office of Ajilon Finance, a staffing firm, said he's seeing signs of a rebound as more people are being placed in jobs.
"It's not a boom time, but we're seeing a slight increase in activity," he said.
About 1,000 of the new jobs can be attributed to the U.S. Census gearing up for next year's massive census survey, officials say.
But the professional and scientific sector, which includes some high-tech jobs, saw an impressive 4,000 increase in jobs, according to government data, confirming reports that tech-related companies are doing better.
Even construction, which was hit hard by the downturn, saw a very slight increase in jobs, the data shows.
Retail and financial services are among sectors that saw declines last month.
Underemployment Lurks In New Mass. Jobless Numbers
By Curt Nickish, WBUR
November 20, 2009
BOSTON – The Massachusetts unemployment rate fell last month for the first time in nearly 2 1/2 years. The rate dropped from 9.3 percent in September to 8.9 percent in October.
But beneath the positive jobs news lurks a very troubling figure that is not getting better: the number of the underemployed. Those are people who are working part-time, only because they can't find full-time work.
There are 200,000 people across the state who are underemployed. They're mainly people who've lost their full-time jobs. They might have gotten some fill-in, contract work at the same company, or they've found part-time work somewhere else – often a job that's below their skill levels, but they're taking what they can get.
These underemployed people tend to only earn about 40 percent of what they were making before, which hurts the state economy and sales tax revenues when a couple hundred thousand people out there have far less money spend.
But what really bothers economists is the career stunting that can take place, since part-time workers don't get the benefits that full-time workers do. Andrew Sum, who heads the Center for Labor Market Studies at Northeastern University, says that part time workers also don't get the training that full-time workers do, either.
"So you're not only losing today," Sum says, "but the work that you're doing today will not pay off for you in the future. So you're going to have a negative effect on you further on down the line."
Underemployment can affect the next full-time job you can land. And it can affect how much you make when you get that job. And depending, those hits you take can stay with you for the rest of your life.
"The key thing is whether you manage to get back a job that utilized your old skills," Sum says. "If you do, you'll be fine. If not, then you're gonna be hurting."
Now this does not go to say that it will hurt less to collect unemployment benefits instead of being underemployed. Even if the economy is slow, it's moving forward. When you're working part-time, at least you're trying to keep pace. This is especially important for younger workers who are gaining initial job experience.
"Any job is better than no job for all of those young people," Northeastern's Sum says. "It's just that for adults, the disadvantages of being trapped in that part-time work are really a lot larger than just the short-term effect on hours."
And the longer the recession goes on, the harder it is for people working part-time to connect with full-time jobs and get their skills back up to speed again.
Underemployed workers say they often feel frustrated, but the level of frustration really depends on the job they used to have. One person I spoke with used to have a good paying job in manufacturing. He's now working part-time in retail for a lot less. He's afraid his old job is not coming back. And so he's got the sobering challenge of having to find something new, take on serious training or get an education.
On the other hand, a woman I spoke with lost her job in financial services. She's now doing part-time project management work in education. She's an example of someone who has a better chance of pulling out of underemployment when the downturn ends. Luckily, says Northeastern University economist Alan Clayton-Matthews, Massachusetts is somewhat less susceptible to the dangers of underemployment.
"Because our labor force is highly educated and highly skilled, it also means it's more flexible," Clayton-Matthews says. "Many workers who transition into one type of job into another can do that fairly quickly with minimal additional training. And with minimal time lost out of the labor market."
But there's still going to be lost time. Here's the troubling side of the jobless numbers that came out Thursday. Normally, when more jobs are available, underemployed workers benefit first. They get more hours sooner, and they're better positioned to take on full-time jobs. But unemployment did not drop at all in Massachusetts' October jobs numbers.
In fact, the figure appears to be at its highest since the Great Depression. So most Commonwealth economists still think it's going to be that later next year before the underemployed get a chance to move forward with full-time jobs and careers again.
Mass. Unemployment Drops for First Time in 2 Years
By Curt Nickisch, WBUR
November 19, 2009
BOSTON – The Massachusetts unemployment rate has dropped to 8.9 percent, down from 9.3 percent the month before. It's the first drop since June 2007 — even as the figure nationally topped 10 percent for first time this recession.
But some of the figures do not support a statewide drop. The payroll survey of employers indicates Massachusetts actually lost jobs in October — 900 in all. However, the household survey suggests a growth in the labor force of 1,500.
"All survey numbers are wrong, the question is how wrong," said Northeastern University economist Alan Clayton-Matthews. "But it's very unusual to see drops of this magnitude. So it has to be considered good news."
Among the state sectors that added jobs is professional and business services, a sign that companies may be feeling more confident about the economy. The field of health care added jobs, too.
Government jobs were basically flat, with new positions for the federal census offsetting losses at the state and local levels. The education sector also held steady.
Manufacturing and financial services continued to shed jobs. Information technology also lost jobs, after adding the month before.
A year ago, in October 2008, the Bay State's jobless rate was 5.8 percent.
To Derail Economy, Put the T on Hold
By Stephanie Pollack, Boston Globe
November 18, 2009
THE RECENT REPORT by businessman David D'Alessandro paints yet another grim picture of the MBTA's financial situation, concluding that "it makes little sense to continue expanding the system when the MBTA cannot maintain the existing one." The report's diagnosis – that the T is in critical financial condition – is correct. The recommended treatment – freezing the current system until its financial health can be restored – is a prescription for disaster for the Massachusetts economy.
Every weekday the MBTA brings hundreds of thousands of workers to jobs in 175 cities and towns. Many of these jobs are in and around the urban core because Boston and its neighbors continue to provide a substantial share of the region's jobs. A recent Brookings report found that Boston is the only large metropolitan area where job growth is concentrating in communities within 10 miles of downtown, rather than sprawling out into places where the jobs are accessible only to workers with the financial resources and patience to commute by car. The commuter rail system connects residents of smaller cities like Brockton, Fitchburg, and Haverhill to these jobs while catalyzing local development around stations.
Transit capacity and ridership need to expand as the economy grows. Cars alone simply cannot deliver enough workers to dense job clusters like Boston's Longwood Medical Area. The recently adopted MetroFuture plan for Greater Boston projects that modest growth will generate 290,000 new jobs by 2030 and calls for two-thirds of them to be located near transit. Transit ridership must also grow if Massachusetts is to meet the ambitious goals in the state's Global Warming Solutions Act, since transportation accounts for the state's largest and fastest growing share of greenhouse gas emissions.
But transit ridership cannot grow if the transit system does not. Capacity can be expanded by adding trains and buses and increasing service frequency. Increased and improved service can spur ridership – but only if the new customers can fit onto trains and buses. The state's projections for 2030 show ridership nearly doubling on the Red Line and almost tripling on the Green Line. Anyone who has elbowed their way onto a rush-hour subway knows that such ridership growth is physically impossible. For ridership to grow sharply, the transit system needs to serve more places.
Freezing the current system, by contrast, will stifle ridership growth and punish communities that have been shortchanged in the past. Neighborhoods along the Fairmount Line and Urban Ring corridors and cities like Somerville, New Bedford, and Fall River will remain poorly connected to the regional economy if expansion projects are slowed or shelved.
The problem, according to D'Alessandro's report, is that the MBTA can no longer afford to grow. Most transit systems spend a small fraction of their budget on debt service. But when the MBTA became financially self-sufficient nearly a decade ago, it was saddled with $5.6 billion in debt, a figure that has soared to $8.5 billion. The report revealed that MBTA financial managers struck a "Faustian bargain," deferring interest and even principal payments into a future that has now arrived. In five years, yearly debt service costs will grow to $525 million – for a transit agency that costs roughly $1 billion annually to operate.
High debt service costs are not the exclusive cause of the MBTA's financial woes. Relieving the T of responsibility for paying off the debt is, however, the closest thing there is to a silver bullet solution. If the Commonwealth were to incrementally assume responsibility for paying off the MBTA's debts, the T could instead invest hundreds of millions of dollars each year to improve operations, make needed repairs and invest in strategic expansion.
Why should Massachusetts take on billions in debt? On Nov. 1 the Commonwealth – literally overnight – assumed responsibility for repaying $2 billion in bonds issued by the now-abolished Massachusetts Turnpike Authority. Massachusetts is in the midst of issuing $3 billion in bonds to fix deteriorating bridges. Building and maintaining roads and bridges is acknowledged to be the state's responsibility. The same is true for transit.
The MBTA cannot afford to maintain, upgrade, and strategically expand the state's transit capacity. The Commonwealth, however, cannot afford not to.
Downturn Isn't Over Yet for Bay State
By Robert Gavin, Boston Globe
November 15, 2009
The Massachusetts economy seemed to have begun a turnaround this summer as employment losses in August diminished to just a few hundred statewide. With the national job losses still mounting, it appeared the state would emerge from the recession sooner than the nation as a whole.
September data, however, changed that outlook. Massachusetts shed more than 9,000 jobs that month, the most since April. Other data, such as plunging state tax collections, also suggested the economy was weakening. Meanwhile, Massachusetts wasn't getting much of a boost from stimulus programs such as "cash for clunkers," which offered owners of old cars and trucks cash toward a new, more fuel-efficient vehicle, because of its minuscule automobile sector.
As a result, it now appears the state will lag behind the national rebound by three or four months, according to a recent forecast by the New England Economic Partnership, a nonprofit research group.
The US economy grew at a 3.5 percent annual rate in the quarter ended Sept. 30, while the state economy shrank at a 1.1 percent rate, according to reports from the US Commerce Department and University of Massachusetts.
"The data was telling a different story this summer," said Michael Goodman, economic analyst and professor of public policy at the University of Massachusetts-Dartmouth. "September seemed to mark a reversal of fortune."
The steep job losses in September suggest that employment data reported over the summer may have underestimated the weakness of the labor market, analysts said. Monthly state employment figures are estimates based on a survey of businesses. The data can swing widely from month to month, and are frequently revised as more information is gathered from employers.
When the data are comprehensively revised at the beginning of next year, they are likely to show that job losses over the summer were worse than first reported, said Alan Clayton-Matthews, a Northeastern University economics professor. Declines in payroll withhold ing tax collections suggest more people may have lost jobs than were counted in the monthly employment reports.
Massachusetts entered the recession about four months after the national downturn began in December 2007, in part because the state was less exposed to the housing bust. Massachusetts, which has a relatively small construction sector, did not experience the same level of speculative building seen in states such as Florida, Nevada, and California.
These and other factors suggested the state might rebound sooner than the nation. Improving employment data in the spring and summer seemed to support that view.
But the disappointing September report showed the state's economy was taking a different path. Having entered the recession later than the nation, it appears the state will emerge later, too. The Massachusetts economy is forecast to begin a turnaround in terms of production this month or next, about four months after the US economy.
"We took the hit later," Clayton-Matthews said, "and we're lagging on the way up, too."
Except for the timing, the state recession will largely mirror the national downturn in depth and duration, each lasting about 20 months and resulting in the loss of about 6 percent of jobs, according to the New England Economic Partnership forecast.
That's still better than the last two recessions, when the downturn in Massachusetts was longer and job losses greater than the nation's. The recession that began in 2001, for example, lasted two years in Massachusetts, compared with months nationally, while the state shed more than 6 percent of jobs, compared with about 2 percent nationally. That recession was led by a technology collapse, which hit Massachusetts' tech-heavy economy particularly hard.
Massachusetts tends to lag behind the nation because its economy relies more on business spending than consumer spending, Clayton-Matthews said. The state has a high concentration of companies that sell equipment and services to other businesses, which typically wait for consumer demand to pick up before investing in technology, software, and other products.
Earlier this summer, it appeared that demand was picking up. Auto and home sales were rising, as were sales of semiconductors, an indicator of growing demand for electronics. In another good sign for Massachusetts, exports were increasing. The state has many companies that sell in foreign markets.
"But just because sales were improving doesn't mean businesses were hiring," Clayton-Matthews said. "They were still cutting costs and squeezing more productivity from existing employees."
Outlook darkens on Mass. job picture in '10
By Robert Gavin, Boston Globe
November 11, 2009
The Massachusetts economy will shed tens of thousands of jobs over the next year, with the unemployment rate peaking near 10 percent in the middle of 2010, according to a forecast released yesterday.
The outlook is darker than just a few months ago, when it appeared that job losses were coming to an end and the state would emerge from the recession earlier than the nation as a whole.
"Now that appears to have been an illusion," said Northeastern University economics professor Alan Clayton-Matthews, who prepared the forecast for the New England Economic Partnership, a nonprofit research group.
The forecast, released at the partnership's semiannual conference in Boston yesterday, projected that the state would lose more than 60,000 additional jobs before the labor market hits bottom in the third quarter of 2010. That would bring total job losses in this recession to just under 200,000, or 5.9 percent of total employment, slightly worse than for the US economy, which is projected to lose about 5.5 percent of its jobs.
The Massachusetts unemployment rate, now at 9.3 percent, will rise to 9.6 percent before beginning to retreat in the second half of next year, according to the forecast. That would bring the state's jobless rate to its highest level since 1976, still below the US rate. National unemployment, now at 10.2 percent, is projected to peak at about the same time at 10.7 percent, according Moody's Economy.com, a West Chester, Pa., forecasting firm.
Governor Deval Patrick, speaking at the State House, said his administration is working to boost the state's economy, focusing on promising sectors such as alternative energy, education, and life sciences, which includes biotechnology and other health-related sectors.
But, he acknowledged, "If you're out of a job or at risk of losing your job, you could care less about what the statistics say. We're still in for a few bumps before opportunity is readily available and widely available to everyone."
That's likely to take years, according to the forecast. The state's unemployment rate is projected to remain above 9 percent into 2011, with no significant job growth until 2012. Massachusetts is not expected to regain all the jobs lost in the recession until 2013.
It now appears the state's recovery will trail the nation's by three or four months, said Clayton-Matthews. The national economy, as measured by the production of goods and services, began expanding in the third quarter, which ended Sept. 30. The state's economy, which continued to shrink last quarter, is expected to resume growing in the current quarter.
Employment typically lags behind production, because even when business picks up, companies hire cautiously until they become confident the recovery will last.
This summer, it looked as if the state's economy had begun to rebound ahead of the nation's. Job losses had diminished for several months, slipping to just 700 statewide in August. But the state shed more than 9,000 jobs in September as incomes and consumer spending fell sharply, suggesting a much weaker economy.
Still, it appears the state's economy is on the mend, Clayton-Matthews said. Worldwide technology sales are rebounding, and so are exports. That's good news for Massachusetts, which has a high concentration of tech firms that sell internationally. "By every measure," Clayton-Matthews said, "information technology markets have turned the corner, and sharply."
A housing recovery is also underway, as both sales and prices have risen solidly over the past several months. Homes in Massachusetts are now at their most affordable since the mid-1990s, Clayton-Matthews said.
And while businesses remain reluctant to hire, the pace of layoffs is slowing. First-time claims for unemployment benefits have plunged more than 40 percent since peaking earlier this year, to 7,900 a week at the end of October from 13,500 in mid-March. First-time claims have slipped below 40,000 a month, which economists consider the dividing line between a recessionary state economy and one that is recovering, Clayton-Matthews said.
Some companies, however, are continuing to slice workforces. American Student Assistance, a Boston nonprofit that helps to manage student loans, has laid off 109 workers, or 17 percent of its workforce. In January, the company cut 50 jobs.
Aramark Corp. of Philadelphia said it will cut 118 jobs by the end of the year at its site in Norwell, which sells uniforms and work clothing to businesses. "We're strategically expanding our operations to other locations," said Aramark spokeswoman Kristine Grow.
Adidas AG's Reebok athletic footwear business is laying off 145 workers, as the company shuts down its Stoughton distribution center and consolidates distribution in South Carolina. The closing was announced in April 2007, before the start of the current recession.
Experts see Mass. layoffs
By Jay Fitzgerald, Boston Herald
November 11, 2009
The Massachusetts economy will likely lose tens of thousands of jobs before a recovery takes hold next year, economists warned yesterday.
The New England Economic Partnership's gloomy forecast estimated that the nation's jobless rate could rise from 10.2 percent to about 10.8 percent by mid-2010, as companies resist rehiring workers as long as possible to make sure a recovery is on solid footing.
In Massachusetts, the jobless rate could jump to a minimum of 9.6 percent from the current 9.3 percent, adding about 65,000 workers to unemployment rolls, the partnership estimated.
And that 9.6 percent figure is likely low, as economists recalculate assumptions due to the higher-than-expected rise last month in the nation's jobless rate.
The bottom line is that the Massachusetts economy is now tracking the nation's economy as a whole, said Alan Clayton-Matthews, an economist at Northeastern University. The state followed the U.S. economy into recession, and it will probably follow the nation out of recession, he said.
The nation's economy probably emerged from the recession this past summer, and Massachusetts will probably crawl out of its downturn this month or next, he said.
One bright spot is that Massachusetts could see a surge in job activity within the technology, health-care and higher-education sectors, the New England Economic Partnersip estimated.
Another bright spot is that the Massachusetts housing market seems to have "turned the corner" as sales and prices have begun to slowly increase again, economists said.
The nation's housing market still has a way to go before it hits bottom, perhaps losing another 7 percent in value through the first half of next year, said Gus Faucher, an economist with Moody's Economy.com, which helps the partnership with its forecasts.
At one point this past summer, it appeared the Massachusetts economy had emerged from recession, as job cuts appeared to be slowing.
But jobs data for September was dismal – and lower state tax revenues indicated that the Massachusetts economy was in rougher shape than thought.
Mass. Economy Shrinks in Third Quarter
By Curt Nickisch, WBUR
October 30, 2009
BOSTON – The commonwealth's economy contracted 1.1 percent during the third quarter of 2009, even as the United States' economy grew 3.5 percent over the same period.
The latest MassBenchmarks economic index compiled by the Federal Reserve Bank of Boston and the UMass Donahue Institute revealed a stark contrast between the state's negative numbers and the country's positive ones.
UMass Dartmouth economic analyst Michael Goodman said it is not as bad as it looks. He co-edited the MassBenchmarks report and said much of the growth nationally was boosted by Cash for Clunkers and the first time homebuyer tax credit.
"The states that are much more dependent on auto manufacturing and have had much more difficult housing markets benefited disproportionately," Goodman said.
On the other hand, Goodman had expected positive third-quarter numbers for the state. So had Alan Clayton-Matthews, a Northeastern University economist and contributor to the MassBenchmarks analysis.
"The state entered the recession later than the U.S., and so appeared to be performing better than the U.S. through the spring of this year," said Clayton-Matthews. "However, recently released income and tax revenue data suggest that the state's economy continued to decline through the third quarter."
The good news is that the forecast is brighter than the current economic climate. Another MassBenchmarks index, a leading one, predicted slow but real growth during the fourth quarter of this year and the first quarter of 2010. Positive indicators include a modest recovery in residential real estate and stronger demand for information technology products and services that Massachusetts companies offer.
However, the index's compilers said the near-term outlook is harder to assess.
Sector cobbles jobless comeback
By Robert Gavin, Boston Globe
October 29, 2009
To cut costs when the economy tumbled, Peerless Precision Inc. invested in computerized equipment, partly to eliminate the use of costly subcontractors. Now that new orders are coming in, the equipment is allowing the Westfield machine shop to expand production without adding to its workforce of about 20.
"The bottom line is that by working with our employees, we've improved efficiency," said Larry Maier, the company president. "That's why we're still here. That's why we're having a good year."
Manufacturing in Massachusetts is rebounding from the deep recession, but as Peerless shows, the sector will be slow in recovering the 25,000 jobs it lost over the past two years. Even though production is projected to expand by nearly 5 percent over the next year, manufacturers are still expected to slice another 14,000 jobs before employment levels in the second quarter of 2010, according to forecasts by Moody's Economy.com, a research firm in West Chester, Pa.
Improved productivity, or producing more with the same or fewer employees, is a key reason why manufacturing no longer generates the jobs it did during the heyday of textiles, shoes, and other traditional industries. But manufacturing nonetheless remains a key component in the state's economy, and one that will play an important role in its recovery, analysts said.
Despite decades of job losses, manufacturing still employs five times as many workers as biotechnology and ranks second only to health care in total payroll because its jobs are generally high paying, according to analyses by Moody?s and Northeastern University's Dukakis Center for Urban and Regional Policy. Manufacturers account for $1 of every $8 in goods and services produced in Massachusetts and export more than $20 billion a year in merchandise to foreign markets, according to the US Commerce Department.
Massachusetts manufacturers were hit hard in the recession, shedding 8 percent of their jobs and cutting employee hours. But the worst appears over. Many firms are reporting rebounds in orders and extending work weeks to meet the demand. Some are even calling back laid-off workers.
"We saw the lights go out last year, and now they're back," said Jack Healy, director of the Massachusetts Manufacturing Extension Partnership, a joint federal-state program that helps manufacturers stay in business. "Dim, but definitely on."
Some firms, however, say conditions are quickly brightening. Michael Tamasi, president of Boston Centerless Inc. of Woburn, said that in the past two months, his company has enjoyed record orders for the precision parts it makes for industries, from aerospace to medical devices. Workers are now on the job 42 hours a week, after being cut to 34 hours. The company, which employs 90 in Woburn and another 60 at its AccuRounds subsidiary in Avon, recently hired two workers and has openings for four more.
"It was tenuous, but we got through it," Tamasi said. "Manufacturing is still very viable and one of the best industries for the future."
Analysts said the state's manufacturing sector is well positioned for the recovery. Although the recession took its toll, the state's manufacturers fared far better than their counterparts nationwide. Manufacturing nationally shed 15 percent of jobs, nearly double the loss here.
Many economists expect the recovery to be led by business investment, particularly in the advanced technology and equipment in which Massachusetts firms specialize. Manufacturers should also get a boost from a weaker dollar, which makes their products cheaper in foreign markets. "This industry was once in free fall," said Barry Bluestone, dean of Northeastern University's School of Public Policy and Urban Affairs, "but it has retooled and reinvented itself as a sophisticated, high tech sector."
Clinton plastics maker Nypro Inc., for example, prospered for many years by making casings and other components for consumer electronics. But as the electronics industry slowed along with consumer spending, Nypro has shifted its focus to health care products, said company spokesman Al Cotton.
Those products are experiencing solid growth, as is Nypro's health care products group, centered in Massachusetts. One of its divisions, NP Medical, recently completed a $5 million expansion in Clinton, and it is considering another one, Cotton said. Nypro employs about 1,000 in the state. "We continue to grow in health care," he said, "and we're starting to see things improve overall."
Hugh Mason, president of Mason Box Co., in North Attleborough, said he is also starting to see signs of better times after a tough year. The 118-year-old box maker was forced to lay off about 30 percent of its workforce, which is now about 50.
"The worst is past," he said. "For those of us who've survived, as the economy comes back, we're going to be able to take advantage of it."
Broadside: Unaffordable housing
(NECN) – One would think that the recession would have one upside. If houses aren't selling, like they once did, doesn't that mean more people should be able to afford them? Guess again.
Jim Braude is joined by Barry Bluestone, Dean of Public Policy and Urban affairs at Northeastern University to discuss. Barry is also the co-author of the Boston Foundation's 2009 housing report card.
Barry says that housing prices did fall in Massachusetts, but because they fell so quickly in other markets around the country, they still remain relatively higher. Barry explains how the drop in housing prices, has caused an increase in rental prices.
To read this year's Greater Boston Housing Report Card, click here.
Renters get little relief as demand increases
By Jennifer McKim, Boston Globe
October 27, 2009
Renting an apartment in the Boston area remains expensive, despite the precipitous drop in property values that has benefited some home buyers, according to a report from the area's largest community foundation and a group that promotes affordable housing.
Survey Your rent changed in the last year? The Greater Boston Housing Report Card 2009 shows renters in the region pay an average of $1,629 a month, 11 percent more than four years ago, even though housing values dropped about 18 percent during the same period.
Barry Bluestone, the report's coauthor, attributed the increase to a growing demand for rentals, as people who lost their houses to foreclosure have moved into apartments, and to a high number of qualified buyers who remain content to rent until the economy stabilizes.
Regional housing specialists are scheduled to meet tomorrow to discuss the report, released by the Boston Foundation and the Citizens' Housing and Planning Association.
Although rents have fallen about 2 percent since they peaked in the third quarter of 2008, they still strain the finances of many Boston-area residents, the report found.
"Renters still make up 40 percent of the people who live here. They tend to be people who are lower or moderate income or young people," said Bluestone, dean of the School of Public Policy and Urban Affairs at Northeastern University. "We clobbered them during this recession."
Adding to their woes, the median household income of renters has fallen 7 percent since 2000, the report said, while homeowners' incomes increased 4.7 percent.
The high rental costs, combined with an economic slowdown, has forced more people to become homeless and resulted in growing waiting lists for affordable rental housing, said Aaron Gornstein, executive director of the Citizens' Housing and Planning Association. At the same time, state and federal programs to assist renters have been cut back, Gornstein said.
"Home prices have come down but rents haven't," he said. "It's a very difficult situation for renters."
Russell Smith, 38, knows firsthand about the high price of renting. After being laid off as a hotel manager in July, Smith decided to move out of his $1,850 a month South Boston loft to find something more affordable. He and his roommate are considering a two-bedroom South End apartment for $1,600 a month.
"It's been very hard to find something that is reasonably priced and what we want," said Smith. "There's a lot of people who have deals out there, but not great deals."
The annual report card, which was first published in 2002 when home prices were on the rise, was created to examine how the region deals with housing affordability, said Paul Grogan, chief executive of the Boston Foundation.
Grogan said this year's report is "sobering" because it shows the Boston area is still unaffordable for many people, despite a drop in housing prices since 2005. Compared with Boston, property values in areas such as Miami, Phoenix, and Las Vegas have plummeted an average of about 50 percent during that time.
And as Boston rents have gone up, the gap between prices in the region and those in the nation's most expensive markets – including Los Angeles, New York, San Diego, and San Francisco – has narrowed, according to the report.
"We are having trouble holding onto our people and trouble creating jobs," said Grogan. "Our relative affordability hasn't improved."
Although rents have started to moderate and some landlords are offering incentives to reduce vacancies, some housing experts don't expect a prolonged downward trend. Nicolas Retsinas, director of Harvard University's Joint Center for Housing Studies, said rents probably will soon increase again because there has been a slowdown in housing construction, and more people unable to buy a home because they are unemployed or unable to get a mortgage are turning to rentals. That kind of market stagnation does not bode well for the rental market, Retsinas said.
"You want an economy that encourages mobility so people can move where the jobs are," he said.
To read this year's Greater Boston Housing Report Card, click here.
Boston-area rents now 2nd highest in country
By Thomas Grillo, Boston Herald
October 27, 2009
Rents in Greater Boston are among the highest in the nation – eclipsing New York City for the first time, according to the Greater Boston Housing Report Card.
"We now have the nation's second-most expensive rents, surpassed only by San Francisco," said Barry Bluestone, a co-author of the annual report. "As a result, Greater Boston is in danger of experiencing more out-migration of young working families."
While the annual survey from the Boston Foundation and Citizens' Housing and Planning Association said the recession is ending and falling home prices have made homes more affordable, the region's "housing crisis" is far from over as rents are rising.
Boston is tied with San Diego as the second-most expensive city in which to rent, followed by Washington, D.C., New York City and Los Angeles, the report found.
"Rental prices are rising due to the foreclosure crisis as people go from homeownership to rental housing," said Aaron Gornstein, executive director of CHAPA, an umbrella organization for affordable housing that funded the study.
Monthly rents in Greater Boston peaked in the third quarter of 2008 at $1,658, up 15 percent since the first quarter of 2004. By the second quarter of 2009, the average rent fell to $1,629, a decline of only 1.7 percent from their all-time high.
The report cites the lack of multifamily housing starts as one reason for the spike in rents. Housing construction in Greater Boston has come to a near standstill.
Last year, 122 Bay State municipalities did not issue permits for any large multifamily projects, the greatest number of communities without such housing production since 2000. No more than 3,500 housing permits are expected to be issued this year, down from 15,000 in 2005, the peak year, the report said.
To read this year's Greater Boston Housing Report Card, click here.
Report: Housing In Boston Less Affordable Than Ever
By Deborah Becker and Kathleen McNerney, WBUR
October 26, 2009
BOSTON – Even though housing prices in Greater Boston are down almost 20 percent from what they were four years ago, this region is still one of the most unaffordable places to live in the country, according to a new report.
There are signs of recovery, with home sales and prices beginning to improve. But rents in Boston are now the second highest in the country, after San Francisco – even higher than in New York.
"Costs here in Boston have actually gone up relatively because prices have fallen so much further elsewhere," said Barry Bluestone, dean of Public Policy and Urban Affairs at Northeastern University and co-author of the Boston Foundation's 2009 housing report card (PDF).
The report, released Monday, reveals a spike in foreclosures over the last couple of years has driven up demand for rental housing and pushed up prices. Rents were up 11 percent this spring compared to the second quarter of 2005, Bluestone said.
"If this housing cycle looks like the last housing cycle, and it already does look that way, then it will be another four to five years until prices get back to where they were in 2005," Bluestone said.
Overall, however, housing prices are beginning to stabilize across the nation as well as across Greater Boston, which Bluestone said could be a precursor to a recovery if demand for new houses begins to pick up.
For a short-run fix to rising rent, Bluestone recommends expanding voucher programs to help people pay the rent.
Bluestone said his long-term concern is of the slow growth in new housing stock, which Bluestone terms a "Third Civil War" playing out across the nation – the first being the Civil War in the 19th century, which the North won, and the second being the battle over where manufacturing would take place in the 20th Century, which the South won.
"The Third Civil War's going to be what regions of the country, what metro areas, what states can retain and attract young people," Bluestone said. "Housing costs (and) rents are going to be a critical decision in where people decide to move, where people decide to remain. If we can't solve our housing price and rent problems in the future, we're going to lose that civil war."
Another problem, Bluestone said, is persuading young people and first-timers to buy into the market. He advocates federal legislation that would allow new homebuyers to purchase home insurance from the federal government. If a homebuyer is forced to sell the house after three years and ends up taking a loss, the government would insure 90 percent of the loss.
"This should get people into the market. It would be much cheaper than the $8,000 home tax credit we have now and I think it would stimulate more sales now to get the economy moving," Bluestone said. Analysts expect prices to have recovered and continue rising over the next few years, so few people would suffer a catastrophic loss.
Bluestone said U.S. Rep. Barney Frank, D-Newton, has endorsed his plan.
Chip Case, an economics professor at Wellesley College, said it is hard to predict what will happen if the federal tax credit for first-time homebuyers expires.
"We are not out of the woods, unemployment is rising and rising rapidly here in the commonwealth," Case said. "We've got a fair amount of uncertainty about where the housing market is going."
To read this year's Greater Boston Housing Report Card, click here.
The Good 100: Building Trains in Detroit
By Michael Dukakis
October 22, 2009, GOOD Magazine
After years of delay, during which both Europe and Asia enjoyed the benefits of modern trains that run at speeds of 200 miles per hour and beyond, President Obama, Vice President Biden, and Congress have made an $8-billion down payment on what can and should be a national rail passenger system that will rival the ones our friends in Europe and Japan have been enjoying for years.
Unfortunately, our failure to invest in high-speed intercity rail has also led to the demise of what was once the world's biggest and best rail-car-manufacturing industry. While GE continues to make quality locomotives that it ships all over the world, the rest of the United States has been incapable of making transit cars and passenger trains for years. For that reason, U.S. metropolitan transit systems and Amtrak have been forced to spend hundreds of millions of dollars on foreign-made trains because our country has lost the capability to build them.
This must change. There is no reason that we can't revive and rebuild our rail-manufacturing industry, especially in places like Michigan that have taken the toughest blows during the current economic downturn. We have plenty of unused and underused industrial capacity, thousands of skilled workers who are currently collecting unemployment compensation, and auto-parts manufacturers who are perfectly capable of making the components of trains.
What's needed is a strong push by the administration, Congress, and states like Michigan to take advantage of what the new national commitment to investing in transit and rail now makes possible.
We have the people. We have the industrial capacity. We can certainly recapture the know-how we once had – another example of how an economic crisis can create new opportunities if we have the sense and determination to take advantage of them.
Source: Good Magazine: http://www.good.is/post/the-good-100-building-trains-in-detroit.
Is Massachusetts Poised to Lead the Recovery?
By Jane Clayson
Host, Radio Boston – WBUR
Some economic indicators suggest the nation, region and our state may be on the edge of recovery from the recession of the last year or so. That's good news, but some economists say there's even better news for Massachusetts: Because of our unique mix of industries, they say, we're going to be out of the recession first, and lead the country in an economic rebound. That's all well and good, but we're still faced with a 9.1 percent unemployment rate. We'll take a look at some of the industries that are said to be leading the way, and at their potential for job creation.
This year's report is due out in a couple of weeks and it indicates several green shoots. Unemployment in Massachusetts has leveled out, beating national averages, largely due to growth in higher education and medical sectors. One surprise: tremendous growth potential in manufacturing.
As the Economy Drags, Green Shoots Hint At Growth in Massachusetts
By Adam Ragusea, WBUR
BOSTON – Around this time every year, Northeastern University political economist Barry Bluestone offers-up a widely-read assessment of the housing market and the economy as a whole in Greater Boston. In 2008, it was pretty scary.
This year's report is due out in a couple of weeks and it indicates several green shoots. Unemployment in Massachusetts has leveled out, beating national averages, largely due to growth in higher education and medical sectors. One surprise: tremendous growth potential in manufacturing.
"Here in Massachusetts, we've really in much of our manufacturing made a transformation to true 21st century advanced manufacturing. Sixty percent of the more than 700 firms we talked with actually expected to add jobs between now and 2017," Bluestone said.
Old Style Manufacturing In The 21st Century
Bluestone highlighted companies that seemed like old style manufacturers, but are doing sophisticated things: such as Boston AccuRounds and Centerless, a maker of precision metal components for applications with extremely low tolerances like medical devices and defense.
"The commonwealth has gotten more and more business-friendly as of the last several years," said President and CEO Michael Tamasi, explaining why he has not outsourced the jobs as many other manufacturers have done. "There's workforce training fund grants, there's industrial development bonds that have helped us build our building in Woburn 10 years ago."
The firm has seen a dramatic up-tick in orders since August. The 60 or so workers at their Avon plant are starting to work overtime again. In the long run, Tamasi said he's confident about the firm's growth potential.
Biotech, Green Tech To See Upswings
In other sectors, there is still a lot of excitement around green tech and biotech, according to Bluestone. One example is Acceleron Pharma in Cambridge, where scientists have isolated a protein with incredible potential.
"This molecule, when given to mice, in three days their lean body mass and their skeletal muscle increase by about 10 percent, and over the course of a month it can increase as much as 40 percent muscle mass," said Jasbir Seehra, the chief scientific officer. His research is aimed at developing treatments for neuromuscular diseases, particularly Duchenne's — a severe form of muscular dystrophy.
Keeping Jobs Close To Home
Acceleron has added about 40 research and development positions this year and are still based in greater Boston. A big question is whether companies like Acceleron will stay in the area once they progress beyond the research and development stage and move into commercial production.
"Well, for these industries it's always good to have a well-trained labor force. Relative to other states, we are pretty good at that," Bluestone said. "On the other hand we have very high cost housing, particularly here in eastern Massachusetts."
Bluestone also pointed out the higher energy costs in Massachusetts and red tape might prompt companies to set-up production operations elsewhere — like North Carolina or India — after their big ideas translate into products for the market.
Click "Listen Now" to hear WBUR's Bob Oakes and Adam Ragusea discuss the report.
Tackling Public Policy at Northeastern University
In Just A Few Months, Dukakis Center Sees Itself As 'Major Public Policy' School
A College and Its Community
By Ian B. Murphy, Banker & Tradesman Staff Writer
Northeastern University's Dukakis Center for Urban and Regional Policy, which has become a player in the commonwealth's housing and economic development scenes, has reached critical mass.
After attracting top economists and policy specialists from around the country for a decade, the faculty drawn from several departments will be tenured in the university's School of Urban Affairs and Public policy.
"Very rapidly, in the matter of months, we have become one of the major public policy schools, not just in New England, or in Boston, but nationwide, given our track record of research in so many of these critical urban issues, from housing, to economic development, to transportation, to workforce development," said Barry Bluestone, the school's dean.
This year Alan Clayton Matthews, one of the region's foremost economic forecasters and a member of Gov. Deval Patrick's council of economic advisers, has joined the school. Mathews previously taught at the University of Massachusetts- Boston. The school also now boasts Bill Dickens as a full professor. Dickens is an internationally recognized labor market and macroeconomics specialist who advised former President Bill Clinton.
"You want people to sort of bang together in a space to think about things," said Christopher Basso, association dean of the school. "You would think they would do that already; you want people at a university to interact with each other. The creation of the school is one of those catalytic events, we're hoping."
The seeds for the school's growth were planted in 1999 when Richard Freeland, who is now the commonwealth's commissioner of higher education but was then the president of Northeastern, recruited Bluestone from UMass- Boston to the school to start the Center for Urban and Regional Policy.
"I was eager to get Northeastern University more involved with the city, and eager to get the university more involved with policy questions instead of just academic questions," said Freeland.
A 'Do Tank'
Bluestone agreed to come to Northeastern, but he had a condition: the Center for Urban and Regional Policy couldn't be just another research center.
"[I wanted] to create a center that was not just a think tank, but a do tank — a think and do tank — one that was not only interested in doing state-of-the-art research, but then found ways to apply it, that's what I [wanted] to do," Bluestone said.
Shortly after the center was founded, Bluestone said he was asked to meet with Cardinal Law of the Archdiocese of Boston, and Paul Guzzi, executive director of the Greater Boston Chamber of Commerce. They both had the same concern – housing – but for different reasons. The church felt the city had a moral imperative to create more affordable housing, and the chamber was concerned that the city was pricing young professionals – and all their retail purchasing power – out and driving them away.
The center did some economic modeling and research – they found 38,000 units needed to be created to stabilize housing prices in Boston. The center joined forces with The Boston Foundation, the Citizens Housing and Planning Association, and The Warren Group, publisher of Banker & Tradesman, to craft "The Housing Report Card,"an annual statistical look at housing in Greater Boston.
And after all that research, the center wanted to do something.
"What became very clear, based on the reports that we'd been doing and some other studies, that we needed somehow to deal with the zoning problem," Bluestone said. "Ultimately we helped craft chapter 40r [the smart growth overlay zoning law] and 40s [school cost insurance] and got it passed. I'm very very proud of that, because that's not what a university usually does. It may do the background research, but to carry that all the way though to get actual legislation written is quite unique."
The center next waded into economic development, specifically in Massachusetts' more industrial cities. Bluestone and the staff surveyed 240 members of the National Association of Industrial and Office Properties (NAIOP) to see what made different cities and towns attractive to developers.
"What was interesting was that things like tax abatements, all kinds of subsidies, ranked very low," Bluestone said. "What ranked very high in their answers where things that had to do with the speed with which they could get a permit to build. What we learned in this new global economy is that speed to market is the catchword."
The result was the Economic Development Self Assessment Tool (EDSAT), software that extensively grades municipalities on attractiveness to development, and offers solutions for improvement.
"The whole idea is to help mayors and other town officials to become CEOs for economic development," Bluestone said. "That's the goal: making them much more adept at overcoming the deal breakers and instilling deal makers to bring investment and jobs to their town."
Bluestone said 60 municipalities in the region have used the EDSAT, and each one that signs on enriches the data. In November, Bluestone is taking the tool to a national council of cities conference in Chicago. Last fall, the research center elected to rename itself after former Gov. Michael Dukakis, who is now a professor at Northeastern, and his wife, Kitty.
Email: firstname.lastname@example.com
Q&A: Dukakis on Ted Kennedy
By Lauren McFalls
September 1, 2009 | news@Northeastern
In 1962, Edward M. Kennedy won a U.S. Senate seat in Massachusetts in his first try at elective office. That same year, a young Harvard Law graduate from Brookline, Mass., named Michael Dukakis ran for and won a seat in the state legislature. During the ensuing 47 years, the two men shared a progressive ideology, a lengthy history of political triumphs and travails, and a personal friendship. Now a Distinguished Professor of Political Science at Northeastern, Dukakis talked yesterday about his relationship with the late senator and the impact of his passing on the current national debate over universal health care, the passion of Kennedy's political career.
How would you sum up Ted Kennedy as a politician?
He was the whole package for me, a remarkable combination of personal commitment and passion for the job, and skills, legislative ability. He never would start a policy initiative without getting a Republican cosponsor.
You know, after Bill Clinton went down to defeat on his 1993 health care plan, he and Ted got together to see what could be done, and decided, OK we'll start with the kids, so they came up with this children's health plan. And Kennedy, as you might guess, was the principal cosponsor in the Senate.
[Republican Senate Majority Leader] Trent Lott knew that Kennedy was looking for a Republican cosponsor. Kennedy had this long-standing personal friendship with [Utah Republican] Orrin Hatch, and when Lott found out that Hatch had agreed to cosponsor the bill, he was just furious. But they put it through — raised the federal cigarette tax from 24 cents to 67 cents and put it through. That was Kennedy.
Do you remember the first time you worked with him politically?
I'm sure we probably did some things together in the Sixties. But people ask me, "What are your favorite Kennedy stories?" and I've got two.
I was first elected governor in '74, I was defeated by Ed King in '78, so there was the great rematch in 1982, in the Democratic primary. King was the incumbent Democratic governor, albeit a conservative one; he later switched parties. Still, there was no reason for Teddy to come out 10 days before that election and endorse my candidacy, but he did.
Did you ever ask him about it?
He just thought it was the right thing to do, very similar to when he endorsed Obama in 2008. He was close to the Clintons, and I know they were very hurt and disappointed, but he did it anyway. And I know his endorsement was just as crucial for Obama then as it was for in 1982.
My other favorite memory came about when I signed the universal health care bill in 1988. I'll never forget when Teddy called me, he was just so proud — of me, of Secretary of Health and Human Services Phil Johnston, of the state. He was incredibly proud that his state was the first in the nation to enact universal health care.
You served as governor for 12 years while Ted was in the Senate, so the two of you must have worked together a lot. Does anything in particular come to mind?
On public transportation, which I'm slightly obsessive about, he was absolutely terrific. This was in my first term, and at the time, you could not bust the highway trust fund, the gasoline tax, you could not use it for public transportation.
I was one of the leaders to fight the so-called Master Highway Plan, which would have — created a California-style freeway system, eight lanes of elevated highway going right through Frederick Law Olmsted's Emerald Necklace, down Ruggles Street and three feet from the Museum of Fine Arts.
And meanwhile, the T was just a basket case, it was awful, it would break down three days out of five when I took it to work.
So after a 10-year debate, we had killed the Master Highway Plan, and we had given up hundreds of million of dollars in federal highway money, but we thought, why can't we use that for public transportation? And Ted and [former House Speaker Thomas P. "Tip" O'Neill Jr.] were largely responsible for making it possible for Massachusetts to become the first state in the nation to be able to use federal highway money for public transportation.
We ended up with $3 billion to invest in the T. We acquired the entire commuter rail system in eastern Massachusetts for $35 million, stations, parking lots, tracks, — and we could not have done it without Kennedy and Tip's leadership.
What will Ted Kennedy's legacy be — what do you think he'll stand out for above all?
In a general way, that he was somebody who knew where he stood, and he lived it, practiced it, did it. He had a very strong philosophy, which at times was not in vogue. And yet he never wavered at all. I think subsequent events demonstrated clearly that his values and his approach to public service made a lot more sense than some of the folks who were critical of him.
The one piece he wasn't able to achieve was his goal of health care for everyone, and I hope we're going to do that.
You see people at [health care] rallies holding signs, saying "Do It 4 Teddy." How do you think his passing will change the health care debate?
No question we'd be on our way to a health care bill if Ted Kennedy had been healthy, engaged, and involved. If, for example, there had to be some compromising on a pure public option, because it was Kennedy, the liberal community would accept it because his credentials there were so strong.
I'm not saying we can't get a health care bill, but there is no one with the unique set of skills and the respect that he had.
My own view is that the Democrats will have 60 votes for cloture, assuming Massachusetts changes the law and gets someone down there to vote. So what the Democrats have to do, not that you don't keep reaching out to Republicans, is to put together a bill that has solid Democratic support, and then you use the 60 votes to close out debate.
But there is going to be some very hard work to do among Senate Democrats. Kennedy certainly would have been the glue to hold them together and get this thing passed. Now, other people will have to step up to try to do it.
Finally, a rail plan for New England
By Michael S. Dukakis and Robert B. O'Brien
August 23, 2009 | Op Ed in the Boston Globe
ALL ABOARD! The New England Rail Train is at long last leaving the station.
Earlier this month top transportation officials of the six New England states endorsed an ambitious regional rail plan that will give New England the opportunity to compete for federal stimulus funds as well as the $8 billion the president and Congress already have committed to intercity high speed rail.
The plan includes a series of projects that will connect the region's states to one another and the region to the rest of the country. It will put thousands of people to work, revive some key urban communities, and build a more secure foundation for the region's economic and environmental future.
The projects include:
- New Inland Route high speed service from Boston to New York City via Worcester, Springfield, Hartford, and New Haven, which will link and revitalize some of the region's oldest cities and most affordable and promising economic enterprise zones – as will proposed new rail service to Fall River and New Bedford. The Inland Route will also provide connecting service along a new Knowledge Corridor from Springfield north to Montpelier, Burlington, and Montreal, connecting the five-college area in and around Amherst with universities such as Dartmouth and the University of Vermont. This would encourage the kind of academic and technological excellence that is the key to New England's future.
- New Capital Corridor service between Concord and Boston – via Manchester, Nashua, and Lowell – which will strengthen another important group of residential and employment centers and ease the burden on a seriously overcrowded I-93 and highway system north of Boston.
- Extension north along the Maine Coast to Freeport and Brunswick of the already successful Amtrak Downeaster service between Boston and Portland, with connections to the Maine State Ferry Service. This will support the all-season tourism industry that has long been a major element of the regional economy and quality of life.
- Completion of environmental review and preliminary engineering for the North Station/South Station Rail Link – for which federal funds have already been requested by Governor Patrick. This project would link North and South Stations by an underground rail tunnel, thereby extending the Amtrak Northeast Rail Corridor north of Boston and finally connecting all the pieces of the commuter rail system in a way that will make it possible for people to leave their cars at home and get to Logan Airport.
The regional rail plan came none too soon. The region is already behind the Midwest and California, both of which have been working on regional rail plans for at least the past decade; other parts of the country are racing to catch up. New England is even behind the rest of the Northeast Corridor, where our partner states to the south have been hard at work, with new rail tunnels between New York and New Jersey already approved, along with roadbed improvements between New York and Washington that will reduce Acela running times to about two hours.
But now that there is a rail plan for New England, it is time to act. The Obama administration has already received over $100 billion in state applications for the $8 billion on the table. The New England governors working our congressional delegations need to push – and push hard – to join California and the Midwest at the front of the federal line. And Massachusetts has a special role to play in this effort: We are the biggest state in New England, and virtually every element of the new regional rail plan is connected to or through us.
Working together, we have a not-to-be-missed opportunity to set the stage for a vibrant and expanding New England economy of the future.
Former governor Michael S. Dukakis is a professor of political science at Northeastern University and former vice chairman of the Amtrak board of directors. Robert B. O'Brien is executive director of the Downtown North Association and chairman of the North-South Rail Link Citizens Advisory Committee.
Measuring for Success
By Jason Kornwitz
August 18, 2009 | news@Northeastern
A unique after-school program at Our Space Our Place–a small nonprofit organization housed at the Tobin Community Center, in Roxbury, Massachusetts–is helping visually impaired and blind children gain more self-confidence and build lifelong skills.
And Northeastern students are making sure the youngsters get the most out of their experience there.
Over the spring semester, two students taking "Techniques in Program Evaluation," a graduate-level political science course taught by Dukakis Center for Urban and Regional Policy senior research associate Laurie Dopkins, worked with the resource-strapped nonprofit to develop a way to gather data on student participation, measure the program's effect on students' lives and assess the organization's future goals.
The project was part of the university's Stony Brook Initiative, a large ongoing partnership that links Northeastern with community and nonprofit organizations in neighboring Roxbury, Mission Hill, the Fenway and the South End. The goal of this particular project is to help these nonprofits develop new methods, leverage resources, and become more efficient and effective, despite all the funding cuts prompted by the economic downturn.
"It sounds easy," says Cheryl Cumings, founder and executive director of Our Space Our Place. "But you really need to do research to make sure you have the right tools. We just don't have the time to do the additional work. And, because of our size and limited budget, we cannot afford to pay someone to do the work Northeastern did."
Our Space Our Place, founded in 2005 and currently serving 11 students, aims to introduce visually impaired or blind kids to new worlds of possibility and adventure. From September through June, the 6- to 18-year-olds take lessons in dance and Tai Kwon Do, learn to play chess, write and perform in plays, engage in team sports, host radio shows and participate in college and career exploration.
Meg Bossong, MS'09, who earned her degree in the Law, Policy and Society program, and Diana Wogan, a graduate student studying political science, developed surveys for Our Space Our Place that elicit feedback from students, instructors and parents, and created a spreadsheet-like tool for tracking student participation.
Keeping the reality of budget restrictions and the need for ease of use in mind, Bossong and Wogan also suggested that all students keep a portfolio of their work, so that, at the end of the year, the nonprofit will have a tangible way of measuring student accomplishments.
Having easy-to-access data will come in handy when the nonprofit applies for grants, says Bossong. "It is critical to establish why a program is unique and valuable, and be able to effectively communicate that information to funders, potential volunteers and others interested in the program," she explains.
"Now, when we apply for grants, we will be able to provide numbers, in addition to the great stories we can tell," Cumings adds.
According to Dopkins, the Stony Brook partnership is a much-needed forum for open discussions about the community's needs.
"Together, we're coming up with ways of addressing the issues," she says.
Photo caption: Graduate student Diana Wogan, left, and recent master's degree graduate Meg Bossong developed an evaluation plan for measuring the affect of a program for the visually impaired. Photo by Lauren McFalls.
A Future for Public Employee Unions?
By Barry Bluestone
July 18, 2009 | The Boston Globe
While working my way through college in the 1960s on a Ford assembly line in Michigan, I was a proud member of the UAW. My union had 1.5 million members. Its economic clout helped provide excellent wages and benefits, and it was one of the most respected progressive forces in the nation fighting for universal healthcare, civil rights, and workforce training, and fighting against poverty. Its political clout helped boost the national minimum wage, legislation not directly benefiting its own well-paid members.
Today, the UAW has fewer than 465,000 members and its economic and political power is greatly diminished. Much of its decline is due to extraordinary blunders made by the auto companies that employ its members. Nonetheless, over the past two decades, the union often failed to take action to preserve the industry and therefore its own membership.
It failed to press the auto companies to build high-quality, innovative cars that could compete with imports. Often, it insisted on job classifications and work rules that undermined efficiency and compromised the industry's competitiveness.
The UAW was not alone. Today, less than 14 percent of US workers are members of unions, down from 35 percent in 1955. With membership so low, private-sector unions have lost much of their power and the nation is losing a major force for progressive change.
Will public-sector unions follow the same path? Nationwide, these unions represent over 35 percent of federal, state, and local employees, roughly the same as in 1980. Over the years, they have won improved wages and benefits for their members. Yet the leaders of many of these unions, particularly in Massachusetts, seem to be setting the stage for the same kind of deterioration we see in unions like the UAW.
Teachers unions refuse to make changes in work practices that could help improve the chances of children succeeding in school. Police unions fight against lowering the cost of details at construction sites. The MBTA union and others representing transport workers lobby vociferously against reforming the state's transportation system. Municipal unions refuse to permit their local communities to join the Group Insurance Commission that would save their towns millions without compromising the quality of their members' medical care.
As a result, between 2000 and 2008, the price of state and local public services has increased by 41 percent nationally compared with 27 percent in private services. Even in the face of the worst fiscal crisis in decades, many state and local union leaders refuse to consider a wage freeze that could help preserve more of their members' jobs.
Such action is rapidly losing the support public-sector unions need to survive. Union leaders may think that by working diligently to elect friendly public officials, they can fend off the day of reckoning. But that day is fast approaching. Citizens, and ultimately their elected representatives, will increasingly object to tax increases to pay for what they see as bloated union contracts and poor public service.
Sensing the public's demand for reform, Governor Patrick and the Legislature have already passed pension and transportation measures opposed by union leaders, and Mayor Menino and Governor Patrick favor an expansion in the number of charter schools.
Ultimately, new ways will be found to provide public services to circumvent public unions. Non-union charter schools will proliferate, not to reduce teachers' salaries or benefits but to avoid a plethora of work rules that make school reform difficult. Public services will be privatized with private contractors hired to pick up trash (in addition to recycling), to guard prisoners, and perhaps even to fight fires. Public highways may be sold off. The result: public-sector unions will see their memberships and their influence decline.
This will be a tragedy. To move in a different direction, we need to think about a new "grand bargain" between public-sector unions and government. Union leaders in the state need to consider ways to work collaboratively with public officials so as to offer quality public services at a reasonable cost to the taxpayer while preserving union jobs for their members.
Click here to view the article online.
Dukakis Center staff to present to Chinese delegation
June 15, 2009
On June 4th,
Dukakis Center Associate Director Stephanie Pollack presented key data on Massachusetts transit and fiscal policy as part of the week-long symposium with government officials from Hangzhou, China.
World Class Cities Partnership hosted the Chinese delegation as the first program of the new initiative. As a new institute of the School of Social Science, Urban Affairs and Public Policy, the World Class Cities Partnership is an international network of government, academic and corporate leaders that aims to bring leaders from around the world together to share resources, information and "best practices" that can be duplicated in other developing cities.
With important city-planning insight from Lisa Signori, Director of Boston's Office of Administration and Finance and Dukakis Center Director Barry Bluestone, the panel discussed the historical strengths and future challenges facing infrastructure planning in Massachusetts. During her portion of the presentation, Associate Director Stephanie Pollack gave a detailed overview of the history of American infrastructure spending and the implications of Massachusetts's unique budget system on Massachusetts' transit and public services. Although Massachusetts has made significant steps to expand and "green" metropolitan areas transit systems and public resources, Pollack's presentation pointed to a need for better collaboration between federal and local governments in the region.
Ms. Signiori's presentation gave key perspective into the City of Boston's budget approval and negotiation process; while highlighting the strengths of a strong mayoral government system, Ms. Signiori explained that Massachusetts often faces budgetary and fiscal negotiation challenges not often seen in other states. Closing with frank questions about differences between state and national infrastructure processes by the Hangzhou delegation, the panel re-emphasized the need for a more diversified source of income for cities and continued transparency between city government officials and unions in order to provide more affordable services for all citizens.
To learn more about the World Class Cities Partnerships, contact Executive Director Michael Lake at firstname.lastname@example.com.
Q&A with Barry Bluestone on the many projects of his "think and do tank"
June 1, 2009
In a recent interview with Northeastern University reporter Susan Salk, Dukakis Center Director Barry Bluestone sounds off on research and policy trends at the Dukakis Center.
Transnational collaboration: School welcomes Chinese delegation for "best practices" symposium
June 1, 2009
The World Class Cities Partnership, an initiative within the School of Social Science, Urban Affairs and Public Policy proudly welcomes a delegation of government officials from Hangzhou, China from May 31st through June 5th. This week-long symposium will focus on the history and current state of urban issues facing Boston.A collection of experts will discuss a new issue each day, including urban planning, education, technology industries, capital investment and budget, and economic development. This first of it's kind World Class Cities Partnership program will share best practices related to our common urban issues and help resolve these issues in cities around the world.
Source: The School of Public Policy and Urban Affairs
Boston Economist: Home Equity Insurance Fund Could 'Nudge' Economic Recovery
By Ian B. Murphy
May 29, 2009 | Banker and Tradesman
Dukakis Center Director Barry Bluestone shares insight on why the American housing market hasn't "yet found bottom" and how a federal homeowner insurance program may give necessary acceleration to the down-economy.
To view the full article online, click here.
A Ride on the Green Line with Former Gov. Michael Dukakis
By David Boeri
May 29, 2009 | WBUR
Other than T officials themselves, there's probably no one single person in Greater Boston that's more concerned about the fate of the T and rail ridership in general than former Gov. Michael Dukakis. When he was in office, he invested heavily in the T.
To view the full article online, click here.
Michael Dukakis: Obama Needs to Revive Train Manufacturing Industry
By Jebediah Reed
May 26, 2009 | The Infrastructurist.com
Last week we ran part one of our recent interview with Michael Dukakis, in which he discussed how building transit will lead to healthier cities and how the burden is now on governors to take the lead on building out our passenger rail network.
In part two, the Duke has some advice for Obama on how to jump start what could become a major domestic industry in decades ahead.
To view the full article online, click here.
Dukakis' Transit Vision Gaining Steam
By Tom Condon
May 10, 2009 | The Hartford Courant
Boston is one of the most successful cities around the country; cool, hip, exciting. What makes Beantown tick?
Trains. The Hub is a rail center, served by intercity, commuter and street rail. "This is fairly obvious. If you invest in rail, you get compact cities; if you invest in highways you get sprawl."
To view the full article online, click here.
Harnessing the power of waste
By Robert Campbell
May 10, 2009 | The Boston Globe
As cities and municipalities are combining economic ingenuity with key efforts to become more sustainable, harnessing previously unattainable energy is now a possibility.
To view the full article online, click here.
The end of the McMansions
By Barry Bluestone and Ted Carman
April 27, 2009 | The Boston Globe
In a recent op-ed piece for the Boston Globe, Dukakis Center Director Barry Bluestone and Ted Carman of Concord Square Planning and Development sound off on why mega-homes of the past are no longer an option for America's new housing and economic future.
To view the full article online, click here.
Fast-rising NU re-examines its identity
By Peter Schworm
April 6, 2009 | The Boston Globe
This article highlights the unique values and offering of Northeastern University and the role they've played in the university's rise to top-tier status in recent years.
"We're going through this transformation so rapidly, I'm sometimes winded by it," said Barry Bluestone, dean of the School of Social Science, Urban Affairs, and Public Policy. "But we're not trying to follow anyone else. We're trying to create our own model. We're trying to create a different kind of school."
To view the full article online, click here.
Stephanie Pollack named to Boston Climate Action Leadership Committee
March 30, 2009
Mayor Thomas Menino appointed Dukakis Center Associate Director Stephanie Pollack, Associate Director of Research at the Dukakis Center to the new Boston Climate Action Leadership Committee. Bringing years of advocacy and policy experience on urban sustainability and transportation, Pollack and the Leadership Committee will advise city government on ways to make Boston a leading "green" city.
Dukakis Center announces new summer internship program
March 30, 2009
The Dukakis Center announces a new series of summer internship programs geared toward current students from across a variety of majors and interests. All internships are unpaid positions. Applications close on May 1st.
What's so bad about a cottage
By Lisa Prevost
March 22, 2009 | The Boston Globe
A plan to build a dense community of homes 1,000 square feet or less has the pretty town of Easton in an uproar. But why? Maybe these are exactly the sort of properties this state needs to help fix a market filled with overpriced, oversized housing.
To view the full article online, click here.
Transportation, planning experts back 19-cent gas tax hike
By Rosemary D'Amour
March 18, 2009 | MetroWest Daily News
Endorsing Governor Patrick's reforms to transportation finance – including the 19 cents gas tax hike – A Better City and the Dukakis Center hosted a panel bringing key transportation and policy experts.
To view the full article online, click here.
Higher Gasoline Taxes: Elitist or Equitable?
By Barry Bluestone and Stephanie Pollack
March 17, 2009 | Presentation to a Better City
Bluestone and Pollack presented analysis that the gas tax is equitable, not elitist. Contrary to conventional wisdom, it's actually not regressive up to $70,000 in income. Moreover, if the increase in gas taxes is not approved, the alternatives — particularly increased MBTA fares — will cost the low and middle income families much harder than the gas taxes.
Download the presentation
Are the High Fliers Pricing Themselves out of the Market?
The Impact of Housing Cost on Domestic Migration Rates in U.S. Metropolitan Areas
Presentation at the Urban Affairs Association Conference, Chicago, Illinois
March 7, 2009
Barry Bluestone, Mary Huff Stevenson, Russell Williams The highest cost metro areas (top decile), failing in the recent past to build adequate housing stock to meet rising demand, are now pricing themselves out of the market for people and business investment.
Download the presentation
Consumers who could lift market not ready to buy
By Robert Gavin
March 7, 2009 | The Boston Globe
As housing prices fall and demand for rental properties continue to rise during the economic downturn, Dukakis Center Director Barry Bluestone and Wellesley College economics professor Karl Case give insight on current consumer trends for housing.
Gas Tax: Paying cents to save big bucks
Barry Bluestone and Stephanie Pollack, Dukakis Center
February 26, 2009 | The Boston Globe
To view the full article, click here.
How much good will the stimulus do you – or the economy?
By Dan McDonald
February 18, 2009 | MetroWest Daily News
Barry Bluestone, Director of the Dukakis Center, sounds off on what the new Obama stimulus package will mean for Massachusetts.
To view the full article, click here.
Chamber experts see fair to partly cloudy skies
By Ashley Smith
February 13, 2009 | Nashua Telegraph
Dukakis Center Director Barry Bluestone helps shed light on current economic conditions during a recent annual meeting in Nashua, NH.
To view the full article, click here.
High-Speed Transit Returns to U.S. Fast Track
By Dave Demerjian
January 28, 2009 | Wired.com
After languishing at the margins of federal policy for most of the past decade, passenger rail is moving to the fore as President Barack Obama joins a growing number of states in calling for heavy investment in America's rail infrastructure.
To view the full article, click here.