You say you want to govern Massachusetts for the next four years, maybe more?
Be careful what you wish for.
Even as the polls show the electorate in a sour mood, local incumbents mostly breezed through their primaries and seem poised to do the same in November. This hints at an odd phenomenon — here in arguably the bitching-moaning-and-finger-pointing capital of America, voters don’t seem to blame our elected officials as aggressively as you might expect.
For politicians elected during the COVID era, the pandemic has absorbed the blame for some of its worst side-effects. Public school math and reading test scores were declining for years before 2020, but COVID still gets most of the credit for their precipitous implosion since then. The collapse of downtown office property values is blamed on the pandemic-era work-from-home boom. And COVID aside, it’s hard to pin the housing crisis too aggressively on Beacon Hill when the lead culprit is generations of NIMBYism at the local level.
However you divvy up the blame pie, the result is the same — a mess that promises to turn the next few years at least into more tractor pull than victory lap.
Don’t take our word for it. Cue the all-stars on the editorial board of Mass Benchmarks, the UMass Donahue Institute/Federal Reserve Bank of Boston bible of regional economic analysis.
At their most recent board meeting they ingested the current data and served up a smorgasbord of troubling questions about our future. For every bit of welcome good news there were disturbing caveats.
The Massachusetts GDP outperformed the nation with two percent growth in the second quarter, in spite of the Trump administration’s efforts to strangle us with tariffs and ICE. “Genuine economic strength…[stemming] primarily from higher productivity growth,” notes the board. But it seems most of that bump reflects “strong equipment purchases related to artificial intelligence, including data centers.”
Uh-oh. Are we pitching our tent on quicksand? “The quality of growth may be less sustainable long-term than the numbers suggest,” writes the board. “Potential economic risks from artificial intelligence include job displacement, the rise in corporate debt to fund infrastructure, and potential financial market instability….if AI falters, an economic slowdown could ensue.”
No worries! Our tech-bro overlord geniuses will never let that happen!
More good news: employment also grew here by more than the national rate. But we still lag the rest of the US in year-over-year job growth, says Mass Benchmarks. They’re hiring in the life science and clean energy sectors, but “jobs weakness persists…in information, transportation, utilities, and finance — areas where artificial intelligence disruption may play a role.” And get this: for all the tartan-clad hype, “leisure and hospitality — despite major events like the World Cup — failed to generate expected employment gains.” Och!
It’s almost cliche at this point to talk about the exodus of younger people in search of jobs that can fund an affordable lifestyle. But next time they start yapping about how all we need to do is keep the bars open later, consider the board’s warning that “the population aged 16 and older — the potential pool for future labor force growth — is not growing…a warning sign about the state's ability to sustain future economic expansion.”
It’s the same old Massachusetts story. If you’re flush and safely ensconced in Greater Boston, the Cape and/or the islands, life is good. Mmm, this $250 omakase is tasty!
Otherwise, not so swell. The next governor can expect to grapple with a state labor force that “may flatline or even decline in absolute terms as demographics shift, creating rising dependency ratios where fewer workers support an aging population,” says Mass Benchmarks. “Immigration restrictions could exacerbate this challenge, making the state more vulnerable to constraints on future growth. How Massachusetts’ employers adopt and integrate AI into work patterns without strangling opportunity for younger workers starting their careers represents a critical challenge. Changes in federal R&D funding policies are creating unease in the Massachusetts innovation community, raising questions about the extent of future federal support for core research activities.”
While some of these threats are Trump-related, broader changes in demographics and the global and national economy have been confounding smart, sincere governors here for decades. The next one, noted the board, may well have to answer an existential question: “whether broad-based prosperity can be restored to regions and populations left behind by knowledge-economy growth, or whether the state will accept an increasingly divided economy where success is mostly confined to a prosperous core.”
In other words, will we be “the shining city on the hill”? Or Detroit?
