Census shows Mass. at a loss
Was only state to take population hit in '04
It was the year everyone wanted to be in the Bay State, with a crush of delegates flooding Boston for the Democratic National Convention and the curse-toppling Red Sox drawing fans from around the country.
But Massachusetts, when it comes to population, is still a loser.
In 2004, the state gained the ignominious title of the only state to lose residents, US Census data show. Despite continued growth in immigration to the Bay State, Massachusetts lost 3,852 people in the last year, a slight drop that economists attribute to a stagnant job market and view as a dangerous signal.
"Population loss is a pretty fundamental number," said Paul E. Harrington, an economist at Northeastern University's Center for Labor Market Studies. "When you start seeing that, you're in West Virginia land."
The only influx offsetting the trend is a boost in foreign immigration, Harrington said. They're counted by the Census, but immigrants often don't show up in job or unemployment data, he said, leading him to conclude that they are being paid under the table on construction sites, in restaurant kitchens, or on landscaping jobs.
"We're creating labor market institutions in this state that we don't want," Harrington said. "I believe this tees up a long-term economic growth problem for us."
The country's population swelled by almost 3 million, to nearly 294 million, from July 2003 to July 2004, the Census Bureau reported in its annual population estimates last week.
In contrast with the fast-growing West and South, Massachusetts logged a loss of 1.1 percent. Its population of 6.4 million didn't change its ranking as the 13th most populous state. Between 2000 and 2004, Massachusetts gained just 67,400 people, the Census reported, leaving it ranked 44th in state population growth.
While high housing costs are often blamed for discouraging residents from putting down roots in Massachusetts, Harrington argued that the primary problem is a job market that has failed to spring back from the recession, which eliminated 200,000 jobs.
Though the unemployment rate has dropped from 6 percent two years ago to 4.6 percent this month, the work force hasn't expanded accordingly, he said. The shrinking labor force is an indication that out-of-work residents stopped looking for jobs or moved elsewhere.
At the same time, those leaving the state are often young, well-educated people who have yet to form families or establish community roots, Harrington said.
"As a consequence, I think we're sowing the seeds of our long-term destruction here," Harrington said.
Governor Mitt Romney's communications director, Eric Fehrnstrom, said that people are probably being drawn to warmer climates where housing is cheaper and more plentiful. Even as the state's housing market has begun to stabilize, a survey this week found that rents take a bigger bite out of hourly workers' paychecks in Massachusetts than in any other state but California.
"Our biggest concern, of course, is that as the economy does come back, our biggest challenge will be a labor shortage," Fehrnstrom said.
Ranch Kimball, Romney's secretary of economic development, disputed the job numbers, saying the state has added about 22,000 jobs since February.
He also pointed out that the governor established a $2,000 incentive training grant for employers who hire someone who has been out of work more than a year and formed a one-stop Business Resource Team for companies looking to locate or expand in the Bay State.
Kimball also said that the administration has made English as a Second Language programs eligible for work force training funds.
Ali Noorani, executive director of the Massachusetts Immigrant and Refugee Advocacy Coalition, said that immigrants have sustained Massachusetts' population for the past 14 years.
He argued that the governor should take a leadership role in recruiting jobs for immigrants and in highlighting the vitality of the state's immigrant communities.
"Undoubtedly, Massachusetts will continue to strengthen its role as a state of immigrants, but the immigrant community needs to be seen as the asset that it is," he said. "The data that's coming out now only solidifies that message."
Russell Gale -- a member of the Massachusetts Coalition for Immigration Reform, which advocates for enforcement of immigration laws -- questioned whether all of the immigrants counted by the Census were legally admitted to the country.
"If illegals are coming in here and taking jobs at low wages and that's the best the economy can do, then that certainly explains why we're losing native-born population and why native-born people from elsewhere in the country are not coming here to settle," Gale said.
"Certainly the cost of living, including housing, is pushing an enormous amount of people out of this state," he said. "We certainly don't need illegal aliens to make up the population loss."
Harrington said that people are leaving for states that have jobs to offer, since New England has only been able to recapture a small percentage of jobs restored after the last recession.
Romney, a former business executive who said during his campaign that he would directly recruit business leaders to the Bay State, has been meeting largely with Massachusetts executives to gauge their needs.
Also this week, the Economic Policy Institute, a nonprofit, nonpartisan think tank, reported that Massachusetts lost 5.6 percent of its jobs to the 2001 recession, a higher share than all but three other states, while its working-age population grew only 2.6 percent. As a result, Massachusetts suffered a greater so-called job deficit than almost every other state.
Kimball said he is "cautiously optimistic" that recovery is ongoing. "I'm more optimistic we'll see a stronger economy in 2005," he said.
Stephanie Ebbert can be reached at ebbert@globe.com. 