Has the Worcester Economy Become Too Dependent on Meds + Eds?

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Wednesday, December 04, 2013

Zeke Wright, GoLocalWorcester Contibutor

Some economists say future job growth can't hinge on so-called “meds and eds” as those two sectors reach the end of their growth cycle.

Health care and education currently form an outsized share of the Worcester economy and employ one in six workers.

In its latest annual economic review earlier this year, the Worcester Regional Research Bureau reported the largest employment growth in Worcester over the past decade has been in education and health services.

Between 2001 and 2011, the two sectors saw an astounding 19.73 percent growth rate in employment, adding 7,138 jobs in the city of Worcester.

'Meds and Eds' currently Worcester's top employers

Down the line, however, small to midsize metropolitan areas like Worcester could see a decline in health care and higher education as those fields consolidate and “cluster” around a few world-class institutions.

The notion runs contrary to conventional wisdom that the sectors will continue to grow in response to an aging population and future economy predicated on a skilled, educated workforce.

“The colleges in Worcester, we have 10 colleges in the city, they're not moving any place,” said the research bureau's executive director, Roberta Schaefer. In terms of medicine, “Worcester is the center of health care in central Massachusetts.”

By the research bureau's reckoning, education and health services employed fully 44.82 percent of the city's civilian labor force in 2011 – a total 43,324 jobs.

Winners and losers in future fields' growth

But education faces challenges related to online learning and the rising cost of traditional college tuition, while overall health care spending continues along an unsustainable upward trajectory.

Last month in The Atlantic Cities, Richard Florida made the case that meds and eds are not themselves a viable source of economic development. An analysis in that piece by the Martin Prosperity Institute's Charlotta Mellander found health care and education made up a combined 15.76 percent of the metropolitan workforce in Worcester, contrasted to roughly 13 percent of total employment in metropolitans across the nation.

Disproportionately, some 16 colleges and universities are currently situated in the Worcester region, while the city's downtown alone boasts three primary care medical centers.

Florida, director of the prosperity institute at the University of Toronto's Rotman School of Management, maintains that while health care and education have been defined by substantial growth in past decades, the likely future for both industries is a greater concentration in fewer, larger cities and regions.

In a similarly veined New York Times editorial, Duke University business professor Aaron Chatterji said it was false to assume future growth around the health care and education fields. While the total number of jobs could grow, not all regions are likely to benefit.

As evidence of a disconnect between development and meds and eds, Mellander in her analysis found no positive correlation between employment levels in health care and education and that region's overall economic performance.

Local take: Meds and Eds will remain

The research bureau's Schaefer disagreed with the notion, pointing to consolidation of regional health services that has already occurred. “I'm not sure there can be any further consolidation given that people need access,” she said, “especially given that heath care will become more important, not less.”

Expansions past, present, and future

Despite some signs of a looming meds and eds bubble, local colleges and hospitals have continued to invest, including at Saint Vincent Hospital which recently opened its new downtown cancer center.

Other expansions are underway or recently completed at Massachusetts College of Pharmacy and Health Sciences, Worcester Polytechnic Institute, Worcester State University, and Quinsigamond Community College.

At the nexus of meds and eds, the University of Massachusetts Medical School opened its new $400 million Albert Sherman Center this past January.

“That's a pretty substantial investment,” said UMass Medical School's Jim Fessenden. With the new research and education facility, the medical school has continued to invest in its mission of educating the next generation of health care providers, he said. “As a part of a thriving academic health sciences center, this growth has been organic.”

Whether or not meds and eds continues to subsist, its current growth is not likely to be sustained.

“Now whether (health care and education) continues to present such a high proportion of our jobs, that may be another story,” Schaefer said.

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