In Search of (10)

Last week we looked at the impressive job creation performance of the Massachusetts economy during the first half of the 2010s. Relatively to past decades, even the celebrated 1980s, we’ve been humming along producing jobs at record levels. This week we contrast job growth with output growth.

Because comparable data are only available through 2014, we don’t pick up Massachusetts’s stellar job creation performance in 2015. Growth in both jobs and output in Massachusetts is still significantly higher than New England when we look at the period between 2010 and 2014, but our growth rates fall slightly below the pace nationally. It’s particularly notable that jobs and output grew at about the same rate for the US; in New England, including Massachusetts, job growth exceeds output growth.

chart1This means labor productivity growth was below the national average with real output per hour worked rising slower (1.4 percent vs. 2.3 percent) and real output per worker declining faster (-5 percent vs. -0.7 percent).


While in the past workers may have not enjoyed wage growth in line with increases in productivity, they appear to be taking the hit with productivity stagnating/declining in Massachusetts. Nationally, mean real weekly earnings for full-time workers grew by 0.5 percent between 2010 and 2014; in Massachusetts, full time workers saw earnings decline by 1 percent.

Economists trace the slowdown in productivity growth back to just before the Great Recession. There has been much concern about why productivity gains have been lagging through the recovery. This problem is central to the pursuit of the American Dream because productivity growth leads to increases in wages and the standard of living. Explanations for the productivity slowdown range from reduced investment in infrastructure, to over regulation, to not providing workers with the skills today’s technology-driven workplace requires. In the coming weeks, we’ll take a more in depth look at these issues as they relate to the Massachusetts economy.


Meet The Authors

Ben Forman

Research Director, MassINC

Our sponsors