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Struggles with poverty remain after recession

Dec. 26, 2013
<b>While national poverty rates have not decreased after the 2008 recession, Massachusetts’s poverty problem is not as severe as the rest of the country.</b><br>Graphic courtesy of massbudget.org

While national poverty rates have not decreased after the 2008 recession, Massachusetts’s poverty problem is not as severe as the rest of the country.
Graphic courtesy of massbudget.org

By G. Michael Dobbs


BOSTON – With the New Year upon us, there is both economic good news and bad news, according to a report released last week by the Massachusetts Budget and Policy Center (MassBudget).

“The State of Working Massachusetts” shows that the Commonwealth has done better than many other states in recovering from the recession of 2008, but there are still persistent levels of poverty and wage stagnation.

According to the report, “Over one in every seven children across the state is currently living in poverty. Child poverty can have a substantial impact on kids’ long-term growth and future opportunities. Research on economic mobility has found that children exposed to many years of poverty are far more likely to be poor as adults. As is the case with the overall poverty rate, child poverty in Massachusetts is lower than the U.S. as a whole, but still significantly higher than it was pre-recession.”

While the Commonwealth has more jobs now than at the onset of the 2008 recession, the job growth has mainly been in lower paying positions and the highest paying positions.

“Despite an overall net job gain, job losses and gains in Massachusetts have not been spread evenly across all employment sectors during the long, slow recovery from the Great Recession. Sectors that historically have provided higher-wage job opportunities for workers with limited formal education – the Manufacturing and the Construction sectors – together have gained only 1,300 net jobs. By contrast, sectors that offer low-wage jobs to these workers – the Leisure and Hospitality, the Retail Sales and the Other Services sectors – have added close to 60,000 jobs. The highest-wage Professional and Business sector also has seen robust growth,” the report stated.

According to Noah Berger, president of MassBudget, long-term education policies have contributed to the recovery from the recession. He said that 45 percent of Massachusetts’s workers have a college degree.

“We have the best educated workforce,” he told Reminder Publications. “Companies are looking for an educated workforce.”

He warned, though, that people should not become “complacent.”

He added, “Think about what the economy looks like in 10, 20 years.” While the statistic may be impressive to some, Berger said it also means that half of the Bay State’s children are not receiving the education they need.

Berger explained that low wage growth, also a condition Massachusetts faces, means the middle class suffers. Partly the problem stems from the decline of traditional manufacturing jobs and part of it comes from the fact the current minimum wage buys less than in year’s past.

He said in 1968, a person earning minimum wage brought home $21,000 in today’s dollars. Current minimum wage employers bring home $16,000.

He advocated for a higher minimum wage.

“It would directly help five million people in Massachusetts. With more money in their pocket they will spend more in their local communities,” he said.

The report asserts, “Increasing the minimum wage could help restore the value it has lost over time. In order to restore the value lost due to increases in the cost of living, the minimum wage would need to rise to about $10.72 in 2013. Assuming the cost of living continues to grow modestly, it would need to be about $11 per hour by 2015. And if the minimum wage had kept pace with gains in productivity since 1979, it would be $19.77 – or about $39,000 a year for a full-time worker.”

Berger said that poverty did decline in the 1960s with the programs first started by President Lyndon Johnson, but “progress has stopped those efforts.”

Massachusetts has a poverty rate of 11.9 percent, which is lower than most other states, but those stats have increased since 2009.

The report’s release coincided with the unemployment number of November in the state. According to the Executive Office of Labor and Workforce Development, “The November 2013 estimates show 3,237,500 Massachusetts residents were employed and 245,700 were unemployed, for a total labor force of 3,483,200. The November labor force decreased by 4,600 from 3,487,800 in October 2013, as 300 fewer residents were employed and 4,200 fewer residents were unemployed over the month. The labor force was an estimated 3,800 above the 3,479,400 November 2012 estimate, with 8,200 fewer residents employed and 11,900 more residents unemployed.”

For the complete report, go to http://massbudget.org.

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