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How Can Central Mass Grow Jobs?

Friday, October 12, 2012

 

Economists, employment advocates and business groups have all offered different solutions for jumpstarting the region's sluggish economy and getting residents back to work.

Recent data from the Bureau of Labor Statistics showed that the number of people employed in the Worcester metro area's labor force was relatively unchanged in August 2012 compared to the same month a year earlier, even though the unemployment rate fell from 7.8 percent to 7.1 percent over the 12 month period.

Long-Term View Needed

Worcester Regional Chamber of Commerce President Dick Kennedy has said that substantial job growth in the Central Mass region is still a long way off.

"I think that some indication of what we're headed for is critical to anybody making business decisions, and that has a lot to do with all the issues that are cost-related," he said.

"All of those issues that are somewhat fluid, you have an awful lot of people that are sitting there saying 'We'll deal with this when there's some strategy and some long-term picture.'"

The major issues for Kennedy are tax and regulatory certainty. As of now, the Bush-era tax cuts, which were extended by President Barack Obama and have been in effect for the past 12 years, are set to expire on December 31, 2012.

While Democrats have argued that they want to extend those cuts for 98 percent of Americans, Republicans have held out in order to try to keep the cuts in effect for all taxpayers, including high-income earners.

"Words alone are not going to carry the day," said Kennedy.

"It's critical that we see some action on the part of the administration and Congress."

The ongoing roll-out of the Affordable Care Act through 2014 introduces another uncertain cost factor for businesses.

When it comes to operating a business in Central Mass, the Commonwealth's 8 percent corporate tax rate can be another hurdle.

Education and Technology In Worcester

"Reducing taxes to try to bring in more manufacturing jobs might make it more competitive," said Bryan Engelhardt, an assistant professor of Economics at the College of the Holy Cross.

"In the long term, if we really hope to be at the heart of employment growth, it's going to be critical to be at the heart of technological innovation."

Worcester's numerous colleges and universities, including the medical and technological research being done at places like UMass Memorial and Worcester Polytechnic Institute, combine the two key factors of education and innovation, which can help deliver a highly-educated and more productive workforce while also generating more work for it to do.

The expanded commuter rail lines connecting Worcester to Boston and points in between starting later this month, as well as the possibility of Jet Blue flying out of Worcester Airport, won't hurt the city's odds of growing its economy and jobs.

"On the margin, it should probably help," said Engelhardt.

Direct Jobs

Meanwhile, the Worcester Unemployment Action Group's Christopher Horton has called for a different type of legislation to improve the employment situation.

The Humphrey-Hawkins 21st Century Full Employment and Training Act would introduce an financial transactions tax on stock and futures trades and credit default swaps at rates of a fraction of 1 percent. That revenue would then be used to fund a direct jobs program and allocated based on a formula similar to that used for federal Community Development Block Grants.

"The government has to step in and take money from those who are sitting on it and use it to put people back to work, and their spending will then drive an expansion in the private sector," said Horton.

"One of our goals for the Worcester Unemployment Action Group is to break the silence around this bill, HR4277."

 

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