Experts see ‘bright spots’ for Massachusetts economy in 2022, despite uncertainty
There are plenty of reasons to feel good about the Massachusetts economy by 2022, experts say. Employers continue to hire, investments in the Commonwealth’s high tech and biotechnology sectors are breaking records, and the state has billions of dollars of federal money to spend on things like infrastructure and development. labor.
“We have had a lot of positives on the economic side of things in recent months, ”said Jeffrey Thompson, director of the New England Public Policy Center at the Federal Reserve Bank in Boston. “There are a lot of companies trying to hire.”
That sunny outlook comes with An obvious caveat as an omicron push is forcing new restrictions in parts of the world, adding to the uncertainty surrounding the coronavirus pandemic. Hospitalizations have increased in Massachusetts as well as across the country. Although the Commonwealth has one of the highest vaccination rates in the country, it is still unclear how this new wave of infections could impact hospitals, residents, workers and businesses.
As the new year dawns, WBUR spoke to several experts about the economic trends they’ve been tracking in Massachusetts and their forecast for 2022.
Massachusetts employers still feel optimistic
According to The Associated Industries of Massachusetts, employers are more confident than a year ago. Business confidence was 57.9 in November 2021 compared to 49.3 for the same period in 2020. AIM’s measure is based on a 100 point scale. Anything over 50 is considered optimistic.
Still, fears of COVID, supply chain issues and inflation have tempered that optimism since the summer.
“It’s important because confident employers hire people,” said Chris Geehern, executive vice president of public affairs at AIM. “Confident employers invest in expanding their factories, offices or facilities, and generally fuel economic growth.”
Geehern expects continued growth in areas such as software, biopharmaceuticals and advanced manufacturing. Construction is likely to have a good year, he says, with a planned $ 9 billion infusion of federal infrastructure funds. Geehern also believes 2022 will be a better year for retailers, who expect an 11.5% increase in holiday sales.
But industries that depend on in-person contact are likely heading for another difficult year. This includes restaurants, hotels, gymnasiums, and performing arts centers. Although attendance at some of these establishments is slowly increasing, it is still not at pre-pandemic levels.
There are concerns about a shrinking workforce
Most of the people who left the workforce during the pandemic have returned, making the state’s recovery relatively quick compared to the rest of the country. But Massachusetts still lacked about 6,800 people in its pre-pandemic workforce. A shrinking workforce and strong employer demand means we’ll likely see a lot of hires in 2022.
Nationally, the United States has gained only about half of the workers it lost during the pandemic, according to the Federal Reserve Bank of Boston.
The state’s labor shortage has not reached crisis levels, but it will take work to keep it that way, according to Mark Melnik, director of economic research and public policy at the Institute. Donahue of the University of Massachusetts.
Melnik says there is currently a significant realignment in the Massachusetts workforce, particularly among low-wage workers.
“People say, “This job is not worth the hassle I’m getting right now, and someone else might be willing to pay me more,” Melnik said.
Participation in the labor market is a key factor in forecasting future economic growth. The pandemic has hastened the early retirement of older, more educated workers, but there were signs of a shrinking workforce even before that. Massachusetts has gained fewer foreign-born workers, who have accounted for 80% of the growth in the state’s workforce since 1990. Net migration has slowed over the past five years due to policies of immigration from the Trump administration, followed by pandemic lockdowns.
Given these challenges, Massachusetts has the opportunity to build a new workforce, says Karen Wallace, marketing manager at AIM.
“Businesses are going to have to do a better job of hiring people who aren’t necessarily like them in order to move the economy forward,” Wallace said.
They may also need to look for talent in different places. An example of how to do this: train and recruit more workers in areas of the state where graduation rates are relatively low.
Massachusetts will need a lot of “upgrading” or “re-qualifying”
The World Economic Forum estimates that half of all workers in the world will need some sort of retraining or “skills upgrading” to keep up with the rapidly changing economy. The same is true for Massachusetts, where nearly 40% of jobs are in what’s known as the “innovation economy,” according to state agency MassTech.
“We feel more confident than other parts of the economy,” said Patrick Larkin, deputy director of MassTech.
This confidence is unlikely to slow down. In 2021, Local biotech companies are expected to break their investment record of $ 5.8 billion in 2020, according to MassBio. This is expected to translate into nearly 40,000 local jobs over the next four years.
While the astonishing growth of the innovation sector is certainly something to celebrate, it leaves behind large segments of the population. This includes many people of color, people without a college degree, and residents of rural areas outside of Greater Boston.
Larkin says the Baker administration has plans to strengthen the redevelopment and training of the state’s workforce using federal pandemic relief money.
“They’re pushing aggressively and working closely with us to try to identify what the needs might be in the tech areas, ”Larkin said.
2022 could be a big year for unions
There is a lot of movement on the union front. According to Gallup, 65% of Americans approve of unions. Steven Tolman, president of the AFL-CIO of Massachusetts, says he sees encouraging signs from the Biden administration.
“Life has changed for us with the new president and the new administration,” said Tolman.
Tolman points to workers’ efforts to organize at big companies like Starbucks and Amazon as evidence of a stronger labor movement. He also hopes the US Senate will pass one of the most important labor laws in recent memory, the Protecting the Right to Organize Act, or PRO Act. Among other things, it would make it easier to organize and impose stiffer penalties on employers who disrupt this process.
In Massachusetts, voters will also have an opportunity to help shape the work and odd-job economy in 2022. A proposed statewide ballot question would ask voters whether delivery drivers and drivers -delivers should be classified as independent contractors or employees. The initiative is similar to Proposition 22 in California, which allowed companies like Uber and Lyft to classify their workers as independent contractors.
“They’re trying to uberize everything and create a lower layer of workers,” said Beth Griffith, who heads the Boston Independent Driver’s Guild, a group that opposes the measure.
Griffith says what voters decide in Massachusetts could have major consequences for concert workers across the country.
Supporters of the measure – including the companies DoorDash, Instacart, Lyft and Uber – argue that classifying workers as independent contractors gives them more flexibility and more control over things like planning and schedules.