Massachusetts Job Picture Taking on a Dimmer Hue

The “Massachusetts Miracle” is beginning to lose its luster as the state, which has one of the lowest unemployment rates in the nation, grapples with a steady loss of manufacturing jobs and with sky-high housing costs.

In the last year alone, General Motors Corp. has laid off 3,700 workers, General Electric Corp. reduced its work force by 5,000, American Telephone & Telegraph Co. cut 1,400 from its payroll, Fireman’s Fund Insurance is leaving the state and taking 550 jobs with it, and Sears Roebuck & Co. is cutting another 1,000.

Those job losses could spell trouble for Gov. Michael Dukakis, whose campaign for the 1988 Democratic presidential nomination is built on the premise that what has been good for Massachusetts is good for the country.

“When it comes to economic opportunity and good jobs, I’m the only candidate who doesn’t just talk about it,” Dukakis says in his standard stump speech. “I’ve done it. I’ve got a record.”

But when pressed, even Dukakis admits that he played only a small part in bringing his state’s unemployment rate down from 12.3%--the highest in the nation--when he took office in 1975 to 3.4% today.

Analysts say a combination of several prestigious universities in the state, which spawn research-related jobs, increased defense spending and tax cuts were responsible for much of the decline in unemployment.

Economists Voice Concern

However, Dukakis does take credit for spreading the wealth around, both to former geographically undesirable parts of the state and to lower income groups. He also points to the many state programs he has started to ensure that the boom continues.

But a number of economists and business people in the state are voicing increasing concern about the problems masked by the growing unemployment figures, particularly the loss of manufacturing jobs.

Between June, 1984, and February of this year, Massachusetts lost 96,400 manufacturing jobs, a 14.2% decline, according to the state’s Division of Employment Security. During the same period, the country as a whole created 465,000 manufacturing jobs.

Particularly troubling to many in the state was the loss of jobs in high technology, the linchpin of Massachusetts’ boom and the fastest growing sector of the nation’s economy.

Massachusetts companies that produce electronic equipment such as computers have cut 96,400 jobs since 1984, a 14.2% decline.

“From mid-1984 to 1987, one out of every two jobs lost in manufacturing in the country was in Massachusetts,” said Bank of Boston chief economist James Howell, who expects the state to lose at least another 25,000 manufacturing jobs by 1990.

“To us economists, when you get beyond a job loss of 8 to 10% in any sector, that’s serious.”

Middle Earners Vanishing

Economists hold manufacturing jobs in high regard because they pay good wages to the middle income workers who do not have the training for top-salary jobs in the engineering, legal and financial fields and cannot live on the low salaries of the endless supply of fast food and retail jobs.

“The middle wage earners are disappearing in this state,” said Heinz Muelhmann, chief economist for Associated Industries of Massachusetts. “This will have serious ramifications for the future. There will just not be enough income in the state for the middle class, which means the government must increase its services and overall economic growth declines.”

To be fair, Howell said, it should be noted that many of the job losses were in aging low-tech industries like textiles, wood and leather, which are undergoing a massive restructuring throughout the nation.

As for the high-tech sector, he said, that industry too is maturing and re-examining its cost structure in the process.

The Dukakis administration can still boast that 326,396 jobs were created in the state between 1982 and 1986, the last year for which complete data exists.

But 42.2% of those jobs were in the wholesale, retail and service industries where salaries and benefits are skewed to the lower end of the wage scale.

Wages 8th Highest

Even with the growth in low-paying service jobs, however, the average annual wage in the state is more than $20,000--the eighth highest in the United States.

But Massachusetts’ high wages and low unemployment rate are not attracting new workers. The state’s population has dipped slightly since 1975, which economists said is an unusual phenomenon in a high-employment area.

Virtually everyone agrees that the reason people are not moving to the jobs is the high cost of housing.

The average cost of a single-family home in Massachusetts rose 77.9% over the last 10 years to $147,800, one of the highest in the nation. In the greater Boston area, the average price is $175,800.

A recent study by the Boston Redevelopment Authority found that only 6% of Boston residents can afford to buy a median-priced home.

Richard Gureghian, spokesman for the state’s Office of Economic Development and Manpower Affairs, said affordable housing is one of the state’s highest priorities. But he added that the state is not unduly worried about a massive migration.

Besides, adds Gureghian, for all the sniping the governor gets from the business community about the loss of manufacturing jobs, “there are 49 other states in the country that would like to have our problems.”