It’s safe to say that Boston is the economic hub of Massachusetts and will be for the foreseeable future. However, a number of cities have the potential to boost the Commonwealth’s economy in the long-run. These communities, known as “gateway cities”, were once home to booming industries that have since left; but what these industries left behind can become the foundations for another wave of economic development.
Gateway cities have struggled both economically and socially over the past several decades. In fact, two characteristics that originally defined these cities were rates of educational attainment and median household incomes below the state average. While these issues persist, some communities are showing notable signs of growth, the first of which is rising population.
According to MassAnalysis.com, between 2008 and 2018 four gateway cities had higher population growth rates than Boston, which grew 7.5%. Everett’s was the highest at 23.3%, followed by Lawrence and Methuen, where populations grew by 14.6% and 12.7%, respectively. Malden also made the cut with a 9.8% rise in population.
There are numerous drivers of rising population, but this growth suggests that economic opportunities are improving in these cities. A few economic indicators, including unemployment rates, support this idea.
After the recession in 2008, Everett’s unemployment rate hovered around 9% until it began to decline in 2012. By 2018, the unemployment in the city dropped to 2.8%– lower than Massachusetts’s annual unemployment rate of 3.3%. Malden’s unemployment rate followed a similar trend; it lingered around 8% until 2012, then fell to 3.0% by 2018.
At 3.8%, the unemployment rate in Methuen was above the state average, although it was 8.3% just five years earlier. Additionally, while Lawrence’s 2018 unemployment rate of 6.2% was considerably above the state average, it’s important to note that this was a significant improvement from just a few years before. In 2014, its unemployment rate was about 11% and it had been in double-digits for several years before that.
Household incomes are also growing, which suggests economic expansion. According to Data USA, between 2013 and 2017 median household income in three of these cities grew at rates greater than the statewide rate of 10.9%. Lawrence’s median household income jumped 20.6%, while Everett’s increased by 16%. Close behind was Malden, which saw its median household income rise 15.9%. Methuen’s growth rate of 8.8% was less than the Commonwealth’s, although it was slightly above the national rate of 8.7%. It’s worth noting that median household incomes in these cities were still below the state average, however these numbers are still encouraging.
|City||Population (2008)||Population (2018)||Population Growth||Median Household Income (2013)||Median Household Income (2017)||Median Household Income Growth||Unemployment Rate (2018)|
Sources: MassPensions.com, datausa.io, lmi2.detma.org/lmi/lmi_lur_a.asp
Population, unemployment, and median household income are only a few measures of growth. That being said, continuing to follow these positive trends would be a very promising sign. Growing populations and higher income levels will not only support local businesses, but increase tax revenue for vital public services such as education. This, in turn, will help these communities thrive.
Cole Kroninger is a Roger Perry Transparency Intern at Pioneer Institute. He is a rising senior at Hamilton College where he studies Economics.