Report Contrasts State Government and Private Sector Employment Changes During Pandemic

Share on Facebook
Share on Twitter
Share on
LinkedIn
+

Read coverage of this report in Patch: “MA State Workers Had More Job Security In Pandemic: Study.”

BOSTON – Massachusetts state government employment has been virtually flat during COVID-19 even as employment in the state’s private sector workforce remains nearly 10 percent below pre-pandemic levels, according to a new study published by Pioneer Institute. The study, “Public vs. Private Employment in Massachusetts: A Tale of Two Pandemics,” questions whether it makes sense to shield public agencies from last year’s recession at the expense of taxpayers.

“Compared to restaurants, retailers and other businesses, there was very little pressure on state government to cut costs associated with COVID’s economic fallout,” said Serena Hajjar, who authored the study. “The private sector has felt the bulk of the pain of this contraction.”

At one point in April 2020, total employment in Massachusetts was 23 percent below pre-pandemic levels, while at the same time state-level government employment was higher than it was in February 2020.

Using Pioneer Institute’s state employee tracker in MassOpenBooks, researchers highlight employment changes among particular state agencies. As might be expected during a pandemic, the Department of Children and Families and the Department of Public Health have higher employment levels than before the pandemic. Perhaps more surprisingly, the MBTA, whose ridership stands at a third of February 2020 levels, has also gained employees.

Some large educational, law enforcement, and judicial institutions have lost employment. The University of Massachusetts system and the Department of Corrections experienced 4 and 3 percent year-over-year employment declines, respectively.

In the private sector, employment in the leisure and hospitality sector — which includes bars, restaurants, and hotels — hasn’t surpassed 70 percent of pre-pandemic levels since last spring. As of February 25, 2021, in-store retailers still face a 50 percent occupancy cap due to ongoing virus concerns. Over the 12-month period ended January 31, 2021, the number of small businesses open in Massachusetts declined by nearly 38 percent.

“During the pandemic the private sector took it on the chin while public sector employees, for the most part, were treated as a protected class,” said Pioneer Institute Executive Director Jim Stergios. “To turn around now and raise taxes to placate public sector unions’ desire to bolster their ranks is willful blindness to reality. State employees represent 3 percent of all employees in the Commonwealth. Coming out of the pandemic, the legislature needs to focus on growing private sector jobs, not taxing them.”

About the Author

Serena Hajjar is an independent contractor at Pioneer Institute, focusing on transparency around the state’s reporting of coronavirus figures and the effects of the coronavirus response on the state economy. Ms. Hajjar is a recipient of the Fulbright English Teaching Assistant Grant to Russia for the 2020–21 cycle. She has a B.A. in international relations and Russian and Eastern European studies from the University of Pennsylvania.

About Pioneer

Pioneer’s mission is to develop and communicate dynamic ideas that advance prosperity and a vibrant civic life in Massachusetts and beyond.

Pioneer’s vision of success is a state and nation where our people can prosper and our society thrive because we enjoy world-class options in education, healthcare, transportation, and economic opportunity, and where our government is limited, accountable and transparent.

Pioneer values an America where our citizenry is well-educated and willing to test our beliefs based on facts and the free exchange of ideas, and committed to liberty, personal responsibility, and free enterprise.

Get Updates on Our Economic Opportunity Research

Related Content:

Interstate Legal Skirmish: New Hampshire Takes Massachusetts Telecommuter Tax to the Supreme Court

/
Host Joe Selvaggi talks with legal scholar and George Mason University Law Professor Ilya Somin about the details, the merits, and the likely implications of the Supreme Court case, New Hampshire v. Massachusetts, on state taxation power, federalism, and the power to vote with one’s feet.

Connecticut’s Painful Journey: Wealth Squandered, Lessons Learned, Promise Explored

/
Host Joe Selvaggi talks with Connecticut Business and Industry Association’s President and CEO, Chris DiPentima, about what policy makers can learn from Connecticut’s journey from the wealthiest state in the nation, to one with more than a decade of negative job growth.

New Study Shows Significant Wealth Migration from Massachusetts to Florida, New Hampshire

Over the last 25 years, Massachusetts has consistently lost taxable income, especially to Florida and New Hampshire, via out-migration of the wealthy, according to a new Pioneer Institute study. In “Do The Wealthy Migrate Away From High-Tax States? A Comparison of Adjusted Gross Income Changes in Massachusetts and Florida,” Pioneer Institute Research Director Greg Sullivan and Research Assistant Andrew Mikula draw on IRS data showing aggregate migration flows by amount of adjusted gross income (AGI). The data show a persistent trend of wealth leaving high-tax states for low-tax ones, especially in the Sun Belt.

Intrepid Restauranteurs Endure: Passion for Community, Patrons, and Staff Mean Failure is Not on the Menu

/
Host Joe Selvaggi talks with Massachusetts Restaurant Association President and CEO Bob Luz about the devastating effects of the pandemic and lockdowns on restaurants.  They discuss the industry's creative strategy for survival, plans for reaching beyond the crisis, and the many positive improvements for this vital sector that employs 10% of the workforce in the commonwealth.

California Tax Experiment: Policy Makers Receive Valuable Economics Lesson

/
Host Joe Selvaggi talks with Stanford University Economics Professor Joshua Rauh about his research on the reaction of Californians to a tax increase, from his report, “The Behavioral Response to State Income Taxation of High Earners, Evidence from California.” Prof. Rauh shares how his research offers tax policy makers insight into the likely effects of similar increases in their own states, including here in Massachusetts.

New Study Finds Tax Policy Drives Connecticut’s Ongoing Fiscal & Economic Crisis

Multiple rounds of tax increases aimed at high earners and corporations triggered an exodus from Connecticut of large employers and wealthy individuals, according to a new study published by Pioneer Institute.

Unemployment Insurance Rescue: Employer Advocate Seeks Relief to Catalyze Pandemic Recovery

/
Joe Selvaggi talks with John Regan, President and CEO of Associated Industries of Massachusetts, about the impact of higher UI rates on employers and what legislators can do to help mitigate the pain.

MBTA Cuts Ahead: COVID Causes Commuters To Consider Comprehensive Changes

/
Host Joe Selvaggi and Pioneer Institute Senior Fellow Charlie Chieppo discuss the reasons for the recently proposed cuts to MBTA service, and offer suggestions as to how the agency’s leadership could use this crisis to improve the service’s long-term health.

Pioneer Report Spotlights Decade-long Building Boom in Massachusetts Construction Industry

In the lead-up to the COVID-19 crisis, the Massachusetts construction industry enjoyed a boom in select subsectors, though employment numbers had yet to recover from the setbacks of the Great Recession, according to a new report from Pioneer Institute that draws data from the MassEconomix web tool.

Pioneer Checklist Includes Steps for Policy Makers, Business Owners to Revitalize Hardest-Hit Industries

Combining the recommendations of studies published earlier this year, Pioneer Institute has released “A Checklist for How to Revitalize the Industries Hit Hardest by COVID-19.” The recommendations for policy makers are organized in three sections: Immediate Relief, Tax Policy Changes and Permanent Reforms.  Business owner recommendations are split into COVID-19 Health and Safety Protocols, Expanded Services and Steps to Improve Cash Flow.

Pioneer Report Highlights Pre-Pandemic Employment Growth in Massachusetts’ Hospitality & Food Industry

In the lead-up to the COVID-19 crisis, the Massachusetts Hospitality and Food Industry enjoyed generally positive employment growth, according to a new report from Pioneer Institute that draws data from the MassEconomix web tool. Most of the Hospitality and Food Industry employment across the state is concentrated in full-service restaurants and hotels.

Pioneer Report Highlights Employment Growth in Lowell, Massachusetts

In 2018, employment in Lowell, Massachusetts finally surpassed its pre-Great Recession peak, according to a new report from Pioneer Institute that draws data from the MassEconomix web tool. Before COVID-19, job growth in the city was driven largely by a resurgence in manufacturing and a continued high concentration of healthcare firms.