Casino jobs aren’t enough
LAST YEAR, House opposition stopped Governor Patrick’s proposal to build three resort casinos in Massachusetts. With a worsening fiscal crisis and Speaker Robert DeLeo taking a more casino-friendly stance than his predecessor, the issue is sure to reemerge this fall.
Proponents argue that casinos will add new tax revenue and much-needed jobs - a Greater Boston Chamber of Commerce study estimates that three resort casinos would add between 10,000 and 11,500 temporary construction jobs and 17,000 to 21,000 permanent jobs. Opponents cite the societal costs associated with gambling.
Our organizations haven’t taken a position on casinos. But we believe the much bigger issue is that while the country added about 25 million jobs over the last two decades, the number of jobs in Massachusetts stayed the same.
Flat job growth is not a strategy for long-term success. Skilled workers have made Massachusetts a leading destination for high-paying jobs. But focusing only on high-end employment is a recipe for disaster, creating a society of haves and have-nots. Broader job growth creates social mobility, encourages affordability, and enhances the region’s ability to attract the best talent.
Creating a level playing field should be the foundation of an overall vision for long-term job growth. It begins with streamlining the process for starting a business. Massachusetts must be a destination that holds opportunity for new immigrants and other start-up entrepreneurs, not just the established and affluent. And while Massachusetts will never be inexpensive, costs matter, and there is much that can be done to reduce them.
A 2006 study prepared by Global Insight for Pioneer Institute found that the cost of land was the source of the state’s high residential and commercial rents, wages, and overall cost of living. The problem often stems from rigid local zoning ordinances that discourage development. In the midst of a deep recession, it’s easy to lose sight of problems such as the supply of affordable commercial space not keeping up with demand. But over time, this has been a main driver of rising costs, making each new job more expensive to create.
The cost of employer-provided health insurance continues to rise much faster than inflation. The Commonwealth’s 2006 health care reform law was a first step toward addressing the problem. It has successfully expanded access to health insurance, but a laser-like focus on cost containment will be necessary if it is ultimately to succeed.
Massachusetts’ cost of electricity, one of the highest in the nation, is also hindering economic growth. With the state’s reliance on expensive fuels to generate power, escalating costs to replace an aging infrastructure, and the willingness to constantly add surcharges to customer bills to fund unproven renewable technologies and other costly experimental programs, further double-digit rate increases are certain.
Massachusetts employers also pay more than $1.5 billion annually in unemployment insurance taxes - double the national average on a per-employee basis. The taxes support a system that offers the richest benefits in the country, and one in which it’s easier to qualify for benefits and recipients can collect for longer than in other states.
With people hurting across the state, this isn’t the time to cut unemployment benefits. But a set of reforms proposed last year by Associated Industries of Massachusetts would have saved $366 million without slashing benefits.
Today, businesses in seasonal industries like construction and tourism routinely lay off the same employees every year, using unemployment benefits as kind of a payroll subsidy. Some small-business owners take advantage of this loophole by laying themselves off and collecting for part of each year. Charging those companies much higher unemployment insurance tax rates would provide a disincentive for bad behavior and lighten the load for companies that aren’t abusing the system.
Whether to build casinos in Massachusetts is an issue that merits spirited debate. But casinos alone aren’t nearly enough to make up for the Commonwealth’s failure to grow jobs. Regardless of how the casino debate turns out, state policymakers should spend far more time and effort on reforms that will spur substantial long-term job growth.
Rick Lord is president and CEO of Associated Industries of Massachusetts. Jim Stergios is executive director of Pioneer Institute.