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Dubious distinction worries Massachusetts

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http://www.csmonitor.com/2005/0107/p02s02-ussc.html

Dubious distinction worries Massachusetts

What's wrong with the only state to lose residents in new census data? It has amenities ... and high home prices, too.

By Sara B. Miller | Staff writer of The Christian Science Monitor

BOSTON - The first settlers to the Massachusetts Bay Colony were fleeing religious persecution. Another great wave of immigration came after the potato famine of the 19th century prompted tens of thousands to immigrate from Ireland. After that, through the 1950s, it was jobs - manufacturing everything from shoes to machinery - that lured laborers here from all over the world.

Now, it seems, the Bay State has lost some of its old allure. According to the latest census estimates, Massachusetts was the only state in the country to lose population from July 2003 to July 2004.

To be sure, the net decline was small, at just over 3,800 residents. Some say an undercount of the state's student body could mean there was no slip at all. Still, the numbers follow decades of slow population growth in Massachusetts - whose population has risen just 1.1 percent since 2000 as states in the South and West have boomed.

Experts say the state's weak job market and high housing prices are to blame. And while the loss does not represent a radical shift, some experts worry about long-term effects on the tax base - especially since many of those leaving are believed to be middle class - if the trend does not turn around.

The state has plenty to recommend it - from a world-class symphony to the scenery of Cape Cod and the Berkshire Mountains. In Boston, once dubbed the "Athens of America," there is plenty of opportunity to draw residents, says Steve Coelen, former director of the Massachusetts Institute for Social and Economic Research. Harvard University, the Massachusetts Institute of Technology, and about 60 other institutions educate thousands each year on the latest professional advances. But many grads, faced with limited access to jobs that can pay local rents, eventually leave. "We keep them here until a certain point," Dr. Coelen says. "Then they go other places with the technology."

Massachusetts was among the hardest hit in the nation during the last recession, losing some 200,000 jobs between 2001 and 2003. It has only regained a fraction of that - 23,000 - since.

A governor's job agenda

Gov. Mitt Romney ® has underlined job creation as a main priority of his administration. Joseph Donovan, director of communications in the state's Executive Office of Economic Development, says the administration has set up grants for job training and set aside resources to help the unemployed find jobs. "The administration is very optimistic it will continue to see job creation and a stronger economy in 2005," he says, as "we continue to break down barriers that hinder economic growth and job creation."

The jobless rate, he notes, is down from 5.6 percent in January to 4.6 percent today, but experts worry that a population decline could deter companies from establishing businesses here in the future.

"We are not a cheap place to do business. There are no natural resources, there is the [cold] climate," says Robert Nakosteen, economist at the University of Massachusetts at Amherst. "The only things that attract businesses are the educational opportunities and the workforce. ...We are losing true magnets that get businesses to come here and stay."

Officials have expressed concern about a 5 percent drop-off in foreign student enrollments too, attributed in part to tighter visa policies since Sept. 11.

Location, location, and price

The cost of living here is one reason that students - and many others - may opt to study, work, and live elsewhere. The median home sale price in Massachusetts has jumped about 15 percent in the past year - to $345,950 this November from $302,000 12 months before, according to the Massachusetts Association of Realtors. This week, Governor Romney announced the creation and preservation of 564 new rental homes throughout the state, mainly for people of low and moderate incomes.

Who's leaving - and for where?

The census data do not specify who is moving from the state and to where they are moving. Much of the movement is typical of patterns in the rest of the country: seniors retiring to warmer climates, residents relocating for jobs.

Gary Rogers, a certified residential specialist who sells homes in greater Boston, says he sees a little bit of everything: young families moving into homes sold by retirees moving south, couples selling suburban homes to move back to the city. "The good news is, I've seen a slight rise in people taking jobs in the area."

Of the 10 fastest-growing states in the most recent census data, five are in the West, and five in the South. But many here have also opted for other New England states, especially lower-tax New Hampshire, the region's fastest growing state.

Indeed, Ian Bowles of MassINC, a local think tank, says it's the middle class that is relocating to other parts of New England. While workers from all over the country still relocate to Boston and beyond for high-paying jobs in finance, medicine, and biotechnology, middle-class workers are opting for cheaper areas.

"We will always be a high cost-of-living state," says Mr. Bowles. He says policymakers and others should focus on the state's native workforce - those who were born here and have family ties - since they are the ones who "will stay in the state through thick and thin."

Full HTML version of this story which may include photos, graphics, and related links

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To be sure, the net decline was small, at just over 3,800 residents. Some say an undercount of the state's student body could mean there was no slip at all.

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There is a lot of finger pointing going on about this point now. The Governor was warned that the students would be undercounted (they have been in the past). There were steps that could be taken to ensure that the students were accounted for properly, but they were not taken. The state faces a significant loss in federal funds due to this population dip and undercount of students.

Of the 10 fastest-growing states in the most recent census data, five are in the West, and five in the South. But many here have also opted for other New England states, especially lower-tax New Hampshire, the region's fastest growing state.

Indeed, Ian Bowles of MassINC, a local think tank, says it's the middle class that is relocating to other parts of New England. While workers from all over the country still relocate to Boston and beyond for high-paying jobs in finance, medicine, and biotechnology, middle-class workers are opting for cheaper areas.

<{POST_SNAPBACK}>

Interstingly, some of the steepest declines are happening in the western part of the state, where housing costs are lowests, but jobs are hard to come by. These western Mass people can't afford the move closer to Boston to find work, and they are likely a large part of the people moving to NH and RI. Boston is actually seeing the largest numbers of housing starts in the state, but many of those units are likely being occupied by single people and childless couples, the families are leaving for the burbs, especially New Hampshire.

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Well, I knew you'd like the article.

Except for the federal funds as you mentioned, Boston, as a city seems fine.

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I could never afford to live in Metro Boston, but I think much of the population loss that occurred in the state took place in the western part.

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I heard it called Taxachuettes

Mitt Romney is focused on job growth translation is that:

A) Companies don't want to move there or expand there because of the sufficating tax burden

B ) Young people don't want to stay there or relocate there because of the cost of living (which in part is due to taxes).

I know in Metro Pittsburgh the tax burden has been tossed around as a culprit for the sluggish growth, when your competing with sunbelt states like Florida and Texas with no SIncome tax or Georgia with nothing in the way of gas taxes then your gonna lose every day.

Supply side, lower the costs=more the revenue!

Just my two cents interested in your take on this :)

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:( This is a copy of what's going on in Detroit, everyone is fleeing the high-tax city. The city government lowered the taxes in an effort to bring people back in, but it cut city revenues also. :o:sick: PghUSA, I think the right name for Massachusetts is MassiveTaxesachusetts. :)

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I heard it called Taxachuettes

Mitt Romney is focused on job growth translation is that:

A) Companies don't want to move there or expand there because of the sufficating tax burden

B ) Young people don't want to stay there or relocate there because of the cost of living (which in part is due to taxes).

I know in Metro Pittsburgh the tax burden has been tossed around as a culprit for the sluggish growth, when your competing with sunbelt states like Florida and Texas with no SIncome tax or Georgia with nothing in the way of gas taxes then your gonna lose every day.

Supply side, lower the costs=more the revenue!

Just my two cents interested in your take on this :)

<{POST_SNAPBACK}>

The tax burden in Massachusetts falls right about in the middle of the national average. The term 'taxachusetts' hasn't applied to the state in 20 years. Property taxes can be burdensome in some areas, but the overall tax burden is not high. The high cost of living primarily comes from the high costs of housing, which comes from a lack of supply. The residential vacancy rate in Boston has been below 1% for decades.

Another factor in the high cost of living is that most homes are heated by oil, and the high cost of heating oil has hit many low and moderate income people quite hard.

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I could never afford to live in Metro Boston, but I think much of the population loss that occurred in the state took place in the western part.

<{POST_SNAPBACK}>

Living in Greater Boston is doable for just about anyone, I did it for close to a decade. And you are right, the only part of the state that is steadily declining in population is the western section. Most of the Boston area is holding steady, and the southeastern part of the state is growing. The western section is losing population do to a lack of jobs.

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Thanks for the clairification on that Cotuit, I have heard that it is getting better but still hear horror stories about it. Glad to see the Governor is recognizing that the state should improve on some aspects of growth. One question when you say "falls in the middle" on tax burden, I like to see contrasts between the "new economy" states of the sunbelt and Pacific coast and the old Industrial Mid-wests and Northeastern Union law states with "commonwealth" origins. If you look closely the whole underlying foundation of states like Texas, Georgia and Florida are less restrictive (zoning, taxes, etc.) then states with a strong heritage of commonwealth programs and union influence. The bad side about the "new economy" states is the same as their strong point, little regulation and a "wild west" atomosphere with some industries. Pittsburgh and Pennsylvania usually rank MODERATELY nationally and HIGH in the Northeast and Industrial Mid-West, but again thats the point to some in high business, the "union states" just don't get it. Interesting discussion.

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We have unions here in Georgia. Didn't you hear about the negotiations that took place about salaries for airline pilots and Delta Air Lines. The poor pilots union (ALPA) finally agreed to cut their average salary of $240,000 per year by a third, so that the airline could stay out of bankruptcy, thus saving the jobs of non-union Delta employees. What a swell bunch of people those pilots are!! I even read some stories in the local paper about how they were figuring out how they were going to get by with just $160,000 per year. :(

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Unions are LEGAL everywhere I believe but most sunbelt and Pacific states are "Right to Work" if you dig into labor law many of the NE and Industrial Mid-West states have volumes of laws protecting unions, coddleing unions, etc. In Pennsylvania for instance (unless they just recently changed it) if you take a job at a company that has a union YOU MUST JOIN THE UNION, you can't be non-union. It has gone a bit far in each direction kind of like a vs. I think union busting in the sunbelt is to an extreme also, but up north and in the Industrial Mid-West Unions are protected like the princess of Windsor castle. The south has unions but its all them, Georgia isn't rushing to their aid anytime soon.

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Froma Harrop: Farther from the madding crowd

Sunday, January 16, 2005

LIBERAL MASSACHUSETTS WAS the only state to lose population in 2004. Republican partisans greet this news as a harbinger of blue-state decline.

While they are at it, they note the following: If current trends continue, Florida will have more people than New York in five years. And in three years, North Carolina will pass New Jersey in population.

Conclusion: No one wants to live in blue America anymore. The conservative regions have all the vim, vigor and spark.

The partisans should know that they celebrate alone.

Most Northeasterners regard a stable or falling population as cause for joy, not mourning. They'd happily trade some economic bounce for more breathing space. If their neighbors want to move to Florida or Arizona, they'll help them pack.

In the Republican boom states, meanwhile, population growth has become a major depressant. Even arch-conservatives in North Carolina, Texas and Colorado see the expanding hordes as a heartbreak, threatening their way of life. They just don't have the guts to say no to developers.

Every state has its growth freaks, who mark prosperity by the number of new houses, cars and shopping malls. But they really lose track of what matters most to people.

The problem in the Northeast is not that people don't want to live there. It's that too many people do.

No one wants to live in Massachusetts? Hardly. The big drag on the state's economy is the high cost of living. Well, house prices simply reflect supply and demand. Houses get more expensive when more people bid on them.

As Yogi Berra said about a popular restaurant: "No one goes there anymore. It's too crowded."

I read that Connecticut's job market was "stagnant" in 2004. "Experts blame Connecticut's high costs and growing traffic congestion for the weak job performance," according to an AP story.

The best cure for traffic congestion is fewer drivers. And the solution for expensive housing is fewer home buyers -- especially when there is little open land to build on.

For years, civic leaders in Pittsburgh have been bemoaning that city's loss in population. But then The Wall Street Journal runs an article with the headline "In an Aging City, the Young People Live Like Kings." It centers on a 20-something Pittsburgh couple enjoying a five-bedroom house with hardwood floors and an ornate mantel in every room. "We could never live like this anyplace else," the young wife says.

As for the politics, we shouldn't make too much of the red-state/blue-state thing. Political junkies paint Nevada red all over, even though 48 percent of its voters chose John Kerry. And in New Hampshire, sprayed blue, George Bush also got 48 percent of the vote.

But the partisans like to play the game of demographic destiny, so let's play along. For example, Republican boosters say more people moving to conservative regions strengthens their side.

Actually, the opposite seems the case in New Hampshire. Some call New Hampshire a northern Sunbelt state, because of its famous aversion to taxes and its rapid population growth. Many of its new residents are moving from Massachusetts in search of cheaper housing and lower taxes.

According to the theory, these newcomers should have swelled the Republican majority. But the theory proved wrong. Once reliably Republican, New Hampshire actually gets bluer with every passing year.

Not all of this is due to a changing ideology. New Hampshire voters remain fiscally conservative and socially libertarian. It's the national Republican Party that has moved away from this ethic. And while the migrants from Massachusetts may be more conservative than the people they left behind, that doesn't make them Bible Belt Southerners.

Life is not bad in Massachusetts. The Bay State has the third-highest per-capita income (after Connecticut and New Jersey). It has the lowest divorce rate and the fourth-lowest infant-mortality rate (after Maine, New Hampshire and Rhode Island).

The rankings that don't feel good involve population density. Massachusetts is the 7th-smallest in area but has the 13th-biggest population.

So let the political junkies fight over the meaning of it all. To most people in Massachusetts, a falling population is a thing of beauty. Sunny and warm in Florida? Shout it from the rooftops.

From The Providence Journal

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An interesting article, but there are a lot of generalizations that I don't agree with.

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Although I believe a lot of the population migration out of the state is from Western Mass, I also think Boston's economy is not exactly jumping, as can be seen from this chart showing employment growth in 2004. It is likely that between the lack of job opportunities, high taxes and utility costs and extremely high cost of housing, it is likely driving away a disproporationately large % of the middle class.

Largest U.S. MSAs Ranked by Year Over Year % Change in Employment Growth, Dec. 2003 - Dec. 2004

Y-O-Y %

Metropolitan Area Change

Las Vegas, NV 5.2%

Phoenix, AZ 3.1%

Riverside, CA 2.6%

Washington, DC 2.5%

Seattle, WA 2.3%

San Diego, CA 1.6%

Miami, FL 1.6%

Houston, TX 1.5%

New York, NY 1.4%

Denver, CO 1.3%

Oakland, CA 1.1%

Atlanta, GA 1.0%

Dallas, TX 1.0%

San Francisco, CA 1.0%

Minneapolis, MN 0.9%

Los Angeles, CA 0.8%

Orange County, CA 0.7%

Chicago, IL 0.4%

Philadelphia, PA 0.2%

Boston, MA 0.0%

San Jose, CA -1.1%

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