October 23, 2005

EUROPEANS WILL EVEN FEEL COMFORTABLE THERE:

A state of decline: Why Massachusetts is losing people (Michael D. Goodman, October 23, 2005, Boston Globe)

The fact that the Massachusetts birth rate has been flat in recent years is in itself not terribly surprising in view of the relatively high level of educational attainment of the state's population -- on average, more highly educated households have fewer children. The disproportionate presence of such households in Massachusetts serves as a natural inhibitor of population growth. Fewer births also serve to raise the median age of the population and in doing so tend to put upward pressure on the death rate. This has long been a recipe for stagnant population growth in Massachusetts.

But while the pattern is not new, what is different today is that the state's traditional defense against slow population growth may not be sufficient in coming years. For much of its history, Massachusetts has been able to rely on two main sources of new residents and workers to compensate for its slow population growth: young adults moving in to the state in order to study and immigrants from other nations seeking expanded economic opportunities here. It is this ability to attract and retain talent from the rest of the nation and the world that has provided the Commonwealth with its primary competitive edge. But recent migration patterns strongly suggest that we may be losing that critical ability.

As documented in ''Mass. Migration," a report prepared by the University of Massachusetts and MassINC, more than 213,000 more domestic residents moved out of Massachusetts than moved into the state between 1990 and 2002. Between 2002 and 2004, this imbalance became worse.

A review of recent tax data indicates that the Bay State experienced a net loss of more than 100,000 residents during this period. During much of this period migrants from other nations have helped to offset these population losses in absolute terms, but these new residents frequently arrive with much lower levels of educational attainment and skill than those they are replacing.

And who are we losing? According to the 2000 Census, Massachusetts migrants leaving the state are younger, better educated, more likely to be employed in a knowledge-intensive industry, and less likely to be married, to have children, and to own a home. Significantly, those residents who were born in the state were much less likely to leave Massachusetts than people born in other states. And even those native-born Bay Staters who did move out of state were more likely to move to a neighboring New England state such as New Hampshire and Rhode Island, suggesting a desire to stay closer to home.

Both these short and the long-term trends have troubling implications for the state economy. Recently, Massachusetts employers have consistently reported difficulty in obtaining workers with the skills and experience they require. The most recent Job Vacancy Survey released by the Massachusetts Department of Workforce Development reported nearly 72,000 vacant positions during a period in which there were more than 140,000 unemployed workers statewide.

If this situation persists, it is easy to imagine that many of these employers may, like many of our residents, seek greener economic pastures elsewhere.

Over the next 25 years, the US Census Bureau estimates that the numbers of Massachusetts residents of traditional working age (20 to 65) will grow much more slowly than our younger and, particularly, our elderly population. In fact, Census population projections predict that the Commonwealth's ''dependency ratio," which measures the proportion of ''productive" residents against the proportion of more ''dependent" residents, will rise from 64.8 percent in 2005 to 83.3 percent by 2030.

Today, for every 100 working-age residents of Massachusetts, 65 residents are being supported. By 2030, this will increase to 83 residents for every 100 working-age residents. While the elderly population is expected to grow more rapidly than the youth population, ''dependent populations" are expected to grow more rapidly than the working-age population. At present pace, dependent populations will grow 24.3 percent over the next 25 years, and over the same period, the working-age population will shrink by 3.3 percent.

The impact of these shifts in the age composition of the Massachusetts population will be partially eased by the extraordinary productivity of the state's workforce and an expected rise in the proportion of elderly people who continue to work. But a growing share of the benefits generated by that productivity -- which historically has benefited workers through higher wages and employers through higher profits -- will now instead have to go to meeting the healthcare and other needs of a growing number of elderly residents.

And this creates an economic Catch-22: As those next-generation families and industries see wealth diverted to take care of the older generation, they may choose to relocate to other regions that offer a more equitable and mutually beneficial arrangement.


The smartest thing they could do is exploit the similar but more advanced phenomenon in Europe and encourage its young workers to come to MA.

Posted by Orrin Judd at October 23, 2005 9:46 AM
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