Shift in Mass. economy jars some workers
Some industries add jobs, but others shedding them
By Kimberly Blanton, 9/12/04
Sarah Mowbray and Sarah Manfra illustrate the tale of two Massachusetts economies.
Mowbray, 29, snared a high-paying job in March as a research scientist for Novartis, which moved to Cambridge two years ago. The pharmaceutical giant has hired about 700 people to work in its research facilities in Kendall Square and a retrofitted candy factory nearby.
Manfra, by contrast, embarked on a job search in May, one of 700 Massachusetts employees laid off after the acquisition of FleetBoston Financial Corp. by Bank of America Corp. The former Fleet talent recruiter, who is ''over 50,'' now finds herself looking for work.
The state's employment market is experiencing its best performance in four years: 9,800 jobs have been generated since the job market bottomed out in February, 300 of them in the once-moribund software sector. But while some industries - drugs, high technology, and manufacturing - are replenishing jobs, their growth is blunted by layoffs in fields such as finance, construction, and state government.
''The economy is transforming itself once again, and there is a reversal of fortune,'' said Alan Clayton-Matthews, a professor of economics at the University of Massachusetts, Boston, who analyzed state employment data for the Globe. Technology ''is coming back strongly, and the sectors which supported the economy and made the recession milder are weakening,'' he said, pointing to consumer spending and residential real estate.
This divergence of trends for two different sets of industries differs from the recovery after the early-1990s recession, when job growth was distributed more evenly among the state's major industries, said Clayton-Matthews. Economists are, however, encouraged by the long-awaited rebound in technology, a pillar of the Massachusetts economy. As biotech and manufacturing build steam, they create demand for products and services produced by other local businesses and spur consumer spending.
''As long as the technology keeps on track, we should continue to make progress,'' said John Bitner, chief economist for Boston-based Eastern Bank. ''I don't see it taking off into boom times, but I see nice, steady progress.''
Since February, the state's manufacturing firms, primarily in high tech, have hired 5,100 workers, according to the University of Massachusetts analysis. The business is being driven by strong capital investment by US companies and rising demand from Massachusetts trading partners, especially China.
For the state's skilled and educated workforce, companies that make computer parts, semiconductors, and other durable goods are a source of quality jobs paying nearly $61,000, on average, according to new data from the Massachusetts Budget and Policy Center.
A typical example is Techprint Inc., a high-tech manufacturer in Lawrence. The company offers full benefits to workers who assemble push-button controls and keyboards for use in medical equipment and bank-teller machines. Techprint's sales are strongest in Europe, where it recently won three big contracts, but ''China is going to be the bigger market'' in the future, predicted owner Paul Durant Sr.
In the past month, Techprint has hired a dozen workers and brought on 20 more in temporary, full-time positions, which could become permanent. And Durant plans to do more hiring by October. His 172 employees receive health and dental benefits, and 401(k) retirement benefits. Although he declined to disclose pay levels at Techprint, key employees who have been with him for years are ''well-compensated.''
While prospects for Massachusetts' economy - and the nation's - are largely optimistic, there are concerns a slowdown in recent months will interfere with the still-sluggish rate of job creation. The state has a long way to go to replace nearly 200,000 jobs lost since employment peaked more than three years ago.
''If our volume of work is an indicator, then things are certainly picking up,'' said Steven LaKind, cofounder of Taylor/Haley Search Partners, a search firm specializing in tech and biotech. The difference in business between this year and last year, is like ''night and day,'' he said. ''We are and have been maxed out in our capacity since February or March.''
But Robert Forrant, professor of economics at the University of Massachusetts, Lowell, doesn't anticipate a strong resurgence in hiring, largely because employers built up so much excess capacity when they made heavy investments in equipment and technology during the 1990s boom. ''They're reluctant to hire people until they see that capacity taken up'' by rising sales, he said.
He is also concerned about where the jobs are coming from. Industries low on the pay scale, such as health and hospitality, are expanding while many higher paying jobs are not being replaced. The Massachusetts Budget and Policy Center said contracting industries in the state paid about $58,000 on average in 2002, while expanding industries paid only $31,000. Job gains this year ''are terrific news but it's too little in terms of making up what's been lost,'' Forrant said.
''The jobs that are disappearing were full-time ones, with health insurance, and the jobs being created aren't,'' he said.
Since February, job gains have been biggest among employers in education and health services - 8,500 new jobs - where average pay is under $39,000. Hospitality, the lowest-paying industry, at just over $18,000 a year, has added 2,200 jobs during that time.
The biotech industry is hiring, but these high-quality jobs often require at least an undergraduate degree. The state's business and professional services companies, which includes some of its biotech employers, have added 3,500 jobs since February.
Mowbray, the research scientist, was so keen to work for Novartis she curtailed her doctoral study in immuno-toxicology at the University of Connecticut when she was offered a position. She is researching how inflammation in the body can lead to hardening of the arteries, a cause of heart attack.
''I felt I could get a head start on my career if I went earlier rather than later,'' she said about leaving school. ''I was lucky I had the training that was necessary, at the right time, to do the kind of research that I wanted to do.''
While pharmaceutical and biotech companies thrive, other Massachusetts employers struggle. State and local governments, a reliable source of jobs with benefits, have continued to lay off workers this year. Massachusetts reduced its state workforce more than any other state government during and after the recession. Between February and July 2004, overall government employment shrank by 1,800.
During that time, employment in the construction industry also fell by 3,400 - more than any other industry - as the housing market slowed and the Big Dig highway project neared completion.
Employment in the financial industry continues to decline. The state's financial firms have lost 1,500 mostly high-paying jobs since February as they struggle with consolidation and rising rates and outsource jobs to cheaper labor markets in the United States or overseas.
The Fleet acquisition ''forced a lot of new people on to the market,'' said Brendan King, president of King & Bishop in Waltham, which helps companies in their recruiting efforts.
After 23 years with Fleet and BankBoston, Manfra received ''an excellent severance package'' to hold her over until she finds new employment. The job market was tough last spring, said the human-resources professional, but she sees glimmers of hope in her search for a human resources position at a smaller company.
''There weren't a lot of opportunities,'' Manfra said. But recently, ''I am experiencing an uptick in interest.''
Kimberly Blanton can be reached at .
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