Massachusetts' job growth has lagged all but one state's in recent years, according to a new study, raising the possibility that the state won't regain the jobs lost in the last recession before the next one begins.
The study, released today by the Massachusetts Institute for a New Economy, or MassINC, finds Massachusetts is still far from recovering the jobs lost in the recession that began in 2001. Six years later, the state still has 100,000 jobs to go.
Now, with the economy slowing dramatically under the weight of the housing meltdown, the risk of another recession is growing. So are the chances that the state won't climb back to the 2001 employment peak.
"Time is running out on the business cycle," said Andre Mayer, senior vice president of research at Associated Industries of Massachusetts, a business group. "We've been having booms and busts, but this time we may get the bust without the boom."
Even if the nation avoids a recession, a recent forecast by the New England Economic Partnership projects the state won't recover the jobs until 2012 - 11 years after the 2001 peak. That would mark the first time since at least 1940 that the state has gone more than a decade without increasing payroll employment, said Andrew Sum, director of Northeastern University's Center for Labor Market Studies and the lead author of the MassINC study.
"We should be embarrassed," Sum said. "The governor, the Legislature have to get back in there and say, 'What are we going to do to create jobs in this state.' Somebody's got to advocate for jobs here."
The erosion of manufacturing, long a ladder to the middle class, and the emergence of industries requiring specialized skills also threaten to create a "boutique economy" that rewards the highly educated and the skilled, but leaves behind broad swaths of the labor force, the study warned.
The state, said MassINC president Gregory Torres, needs "a greater sense of urgency on how to respond to the shifting economy and provide a mix of opportunities for all workers."
The study calls on the state to set targets for creating jobs in industries that sell goods and services beyond Massachusetts, so-called export sectors that bring wealth into the state and typically pay higher wages.
In addition, the study calls for boosting education and worker training to match skills to job vacancies, now about 90,000; cutting energy and other business costs; making it easier for firms to expand; and developing strategies to spread economic benefits, particularly to aging industrial cities.
"We've got to try things," Sum said. "We have to stop taking things for granted."
Kofi Jones, spokeswoman for the Executive Office of Housing and Economic Development, said the Patrick administration is "focused on expanding economic opportunity and ultimately creating 100,000 new jobs through long-term investments and changing the business culture and climate."
Since the beginning of this year, she noted, the state has added about 25,000 jobs.
Massachusetts, because of its large technology sector, suffered the deepest job losses in the nation after the tech boom went bust in 2001, shedding 6 percent of its jobs, compared to 2 percent nationally. Weak job growth resumed in early 2004 and has picked up modestly over the past year.
Still, only Michigan, which continues to bleed jobs as the US auto industry sinks, has a worse job-creation record. Through the end of last year, Michigan's payroll employment was down 6 percent from 2001, compared to nearly 4 percent in Massachusetts. Only five other states had yet to regain their pre-recession employment peak by the end of last year.
With its mature economy, Massachusetts isn't going to lead the nation in job growth, the study concedes, but the anemic rate of job growth over the long term is cause for concern. Since 1988, payroll employment in Massachusetts has expanded by less than 4 percent, compared to nearly 30 percent for the nation. The MassINC reported analyzed nearly two decades of economic data.
Perhaps more alarming, the study found, Massachusetts is losing jobs in key sectors, such as technology and manufacturing. In 2000, Massachusetts accounted for 4.2 percent of the nation's tech jobs; by 2006, just 3.9 percent.
Its share of manufacturing jobs, meanwhile, slipped to 2.1 percent from 2.3 percent. Among the few sectors that increased the share of jobs was biotechnology, which expanded employment at more than twice the national rate.
As biotech's growth shows, the state's economy is not without bright spots. Its output remains strong, thanks to growing productivity of the state's workers, and incomes are rising at solid rates.
But sectors like biotechnology have not proved to be the job generators traditional industries were. Biotech accounts for about 2 percent of the state's payroll employment. Manufacturing, despite having lost some 100,000 jobs since 2001, still accounts for 9 percent of the state's payroll jobs.
Robert Gavin can be reached at rgavin@globe.com.
