Massachusetts leads the nation in unemployment growth

December 19, 2001

New report shows metro Boston and high-tech beltway hit hard

BOSTON, Mass. - Thought to be somewhat immune to labor market fluctuations given its strong economy, diversity of its economic structure, its educated workforce and reliance on financial and high technology industries, the Bay State has seen the national recession ravage its workforce in 2001. According to a new study by the Center for Labor Market Studies at Northeastern University, since early 2001, Massachusetts now ranks first in its rate of unemployment growth whose level has climbed to more than 80 percent in less than a year (compared to a 37 percent increase nationally). And, according to the study's authors, economists Paul Harrington and Andrew Sum, it is likely that the state's unemployment rate will continue to worsen given recent national economic declines.

The substantial labor market expansion of the 1990s reached its zenith in the last quarter of 2000 when New England registered the lowest unemployment rate ever recorded for any major geographic region in the nation, with the average unemployment rate in Massachusetts at only 2.6 percent, some 1.4 percentage points lower than the national average. Since then, however, both New England and Massachusetts now lead the nation in the overall growth of the number of unemployed, with state unemployment rising by more than 83 percent in ten months and more than 64,000 additional unemployed between December 2000 and October 2001.

"Little solace should be found in the fact that the state unemployment rate has remained below the national average," said Harrington. Because of limited labor supply growth during the 1990s, he explains, the official unemployment rate in Massachusetts fell to historically low levels despite a below-average rate of new job creation in the state over the past decade.

Sum and Harrington also explain that many of those who lost their jobs in Massachusetts are college-educated, a reversal of the trend in the last recession that found many without a college education jobless.

"Unemployment insurance claims among those with four or more years of college more than doubled over the year and rose twice as fast as those of all other educational subgroups," Sum said. "Substantial increases in unemployment claimants also took place among workers in managerial and business/fiscal occupations, computer-related professions, and architecture and engineering positions. In this economy, no one - no matter their education - is immune."

The study also found that the recession has had disparate impacts on unemployment across geographic regions of the state, the hardest hit being the Metro West regions and the Route 2 corridor north of Boston. In the Metro West region, total unemployment rose by nearly 87% between the third quarter of 2000 and 2001 as college graduate unemployment in this area rose sharply. Not surprisingly, layoffs among firms in engineering and information technology related fields were especially steep in this region of the state while the number of UI claimants in the Route 2 corridor nearly doubled since last fall.

Given the sharp rise in the number of Massachusetts workers who have lost their jobs since last winter, Sum and Harrington call upon the US Congress to expand national funding to better address the growing need for re-employment and re-training services to the state's growing pool of dislocated workers.

Effective use of such funds can assist in keeping workers in our state, having them remain active in the labor force, and equipping them with the education and training needed to successfully compete in the labor markets of the future, the authors said. For a copy of the Center for Labor Market Studies latest report, please call 617-373-5455 or download it from the Web (PDF): http://www.nupr.neu.edu/news.html
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Northeastern University, a private research institution located in Boston, Massachusetts, is a world leader in practice-oriented education. Building on its flagship cooperative education program, Northeastern links classroom learning with workplace experience and integrates professional preparation with study in the liberal arts and sciences. For more information, please visit www.northeastern.edu.

Northeastern University

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