ALMOST ALL INDUSTRIES, from hospitals to restaurants, is struggling to hire in Massachusetts. While some of this could be due to COVID-related issues that will eventually diminish in the future, a Massachusetts Taxpayers Foundation report says one reason the problem is not going away anytime soon: demographics.
The new report demonstrates the reality of a problem economists have warned about for years: a shrinking labor market due to declining birth rates, an aging population and other factors related to migration.
“The decline in the birth rate over the past few decades, the aging of our population, the shrinking of our workforce age population, and then the reduction in international immigrants into Massachusetts, all are somewhat troubling because it means our workforce has been and will continue to contract,” said Eileen McAnneny, president of the Massachusetts Taxpayers Foundation, a business-backed group. “I think the trends were ongoing. I think COVID exacerbated some of it.”
According to the report the Massachusetts workforce-age population (those aged 20 to 64) peaked at 4.18 millions in 2018, and is projected to decline by 180,000 in 2030.
Low birth rates are one factor. In 1990, Massachusetts had nearly 92,000 births per year. There were just 66,000 births in 2020. Massachusetts has the second-lowest birth rate in America, almost 20 percent lower than the national average.
Mark Melnik, UMass Donahue Institute director of economics and public policy research, stated that New England states have older populations than other states. This means they have fewer women in prime childbearing years. Massachusetts is the most educated state in America, with many women being educated and participating in high numbers in the workforce. Statistics show that college-educated women have shorter wait times to have children, and more children.
The pandemic caused a drop in birth rates. There was also a period of unusually high deaths in Massachusetts in 2020.
In general, Massachusetts’ population is aging. The percentage of people aged 18 to 65 has increased from 11 to 17 percent between 1970 and 2020. While the percentage of those 19 to age 65 dropped from 37 to 22 percent, the seniors over 65 have increased their share of the population. This has significant implications for the workforce as Baby Boomers age.
The second factor that affects the size of the workforce’s is migration. Massachusetts has seen more US residents move out than in for a long time. Massachusetts has witnessed 3.6% of its population leave the state in the last decade. Massachusetts lost 46,000 residents in 2021 as a result of the pandemic. This was the fourth-highest number of people moving away from the state.
Massachusetts has always enjoyed an influx in international immigration. This was even more than the domestic migration from the state. The number of foreign immigrants to Massachusetts has increased steadily from 2008 to 2018. Since then, however, immigration has declined due to changes in federal policy and the pandemic. In 2021, Massachusetts saw a drop in the number of immigrants from abroad who came to Massachusetts. This was compared to 1990. Between 2020 and 2021, there were more people moving out than people coming in to Massachusetts.
Melnick pointed out that researchers have long known about the problem of the retiring Baby Boomers without a younger generation coming in to fill their shoes. COVID, however, exacerbated the problem by making older people retire faster and limiting immigration.
Melnick spoke to CommonWealth While on his way to Amherst, Melnick spoke at a training session for new legislators. Melnick stated that he would be focusing on long-term public policy issues posed by an aging workforce. He stated that lawmakers must look at ways to increase participation of groups like those who have been incarcerated or are not working in large numbers. Another policy that could be helpful is to teach workers without high school diplomas new skills, create more affordable childcare, so women can work more, and lower housing prices to allow more families to afford living here.