By Senator Richard T. Moore

Last month, the state reported that the Massachusetts jobless rate had jumped in December to 9.4 percent, up from 8.7 percent in November. The numbers clearly showed that workers are still taking it on the economic chin here. But economists say employment is growing in key sectors in Massachusetts, suggesting that the economy may be close to actually generating jobs.

According to a number of independent measurements, the worst of the crisis appears to be behind us. Home sales have increased for four months running. The unemployment rate has dropped. Capital markets are rebounding, and surveys show business confidence is improving. Independent analysts now predict that Massachusetts will recover faster and stronger than the rest of the nation.

The biggest surprise in last month’s state jobs report was that the manufacturing sector, which has been in decline for the past fifty years, is slowly expanding. State data shows that manufacturing companies have posted a net increase in jobs over the past two months. Some firms are hiring, recalling temporary workers or just rolling back mandatory part-time hours that were imposed during the depth of the recession. 

There's other evidence of economic expansion—and possibly more jobs and increased pay for workers on the way. The Boston Globe reported recently that, after several years of decline in the housing market – a staple of economic activity – increasing numbers of people are ready to buy a home. They want to take advantage of depressed home prices, low interest rates, and a federal government tax credit that may expire this summer.

Beyond the recent Massachusetts jobs report, the Federal Reserve Bank last month said its most recent survey of employers in the Boston area showed many have plans to either add jobs or increase the hours and pay of those already on payrolls.

Venture capital firms meanwhile have been pumping millions into area technology firms—even as venture capital spending is decreasing nationally—suggesting growth in those locally cutting-edge areas as well. Separately, another survey released last week showed that 42 percent of small and medium-sized firms in New England are now planning to hire workers in 2010, up from 29 percent a year earlier. The upbeat survey was conducted by the Smaller Business Association of New England and Insight Performance Inc., a human resources consulting firm.

For people who are among the nearly ten percent without a job, for those whose hours have been cut, as well as for those worried about keeping their jobs, the pronouncements from economists that things are beginning to improve brings cold comfort. However, this growth in the private sector encouraged by positive steps taken by state government will lead to job opportunities for local area residents in coming months.

Managing State Finances Makes Good Business Sense

While most of the credit for economic improvement is the result of activity in the private sector, state government has played an important supporting role in turning the economic corner. At the end of last year, the three major credit rating agencies reaffirmed Massachusetts’ AA bond rating, while downgrading other states across the country.

In fact, the bond rating agencies complimented the state’s fiscal stewardship. Fitch Ratings, Moody’s Investor Services and Standard & Poor’s all affirmed their credit ratings for Massachusetts. Moody’s credited “effective management during strained economic times.” Fitch’s report cited “a record of prudent financial management.” 

Standard & Poor’s highlighted “strong and conservative budget management practices.” This independent evaluation is important because it helps encourage businesses to locate and grow in Massachusetts adding to the jobs that will be created.

A solid state bond rating also helps stretch the value of bonds to rebuild our aging roads, bridges, and buildings. Construction jobs, among the hardest hit by the recession, are likely to rebound this spring as public building projects get underway.

Freezing and Cutting Tax Rates Promotes Job Growth

Earlier this month, the State Senate took another step toward helping promote economic growth when it froze unemployment compensation taxes. The UI rate was scheduled to increase by nearly $300 per employee. Without the freeze, the average employer would see the per-employee payment jump from $584 to $852. This action was necessary to help bring some immediate relief to businesses in this difficult economic environment. It’s one of several ideas under review in the Legislature to help improve the current business climate. The Legislature has also reduced the corporate excise tax, dropping this year to 8.75 percent and to 8 percent by January 2012.

Making State Government Work Better Promotes Business and Jobs

Those other efforts include Senate legislation to streamline the state’s array of business development agencies, many of which overlap duties and lack coordinated efforts. The Senate also supports certain business tax incentives and a cap on small business health insurance rates to provide further relief and encourage short-term growth.

For the remainder of the 2010 legislative session as well as our focus for the 2011-2012 meeting of the General Court, we must remain focused on putting people back to work and making state government work more efficiently to serve the people of Massachusetts. At the very least, that’s what I’ll keep fighting to achieve!

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