By Andy Metzger
STATE HOUSE NEWS SERVICE
---- — BOSTON -- The Massachusetts unemployment rate rose above the national rate in November, the first time the Bay State has crested the national rate in more than six years.
“I think we’re very happy to see the nation as a whole is recovering,” Secretary of Labor and Workforce Development Joanne Goldstein told the News Service. She said the national economy is “catching up with Massachusetts” and said the jobs report showed the state economy is growing at a “steady pace.”
The Massachusetts jobless rate ticked down from 7.2 in October to 7.1 in November while the national unemployment rate took a more precipitous drop from 7.3 percent in October to 7 percent in November.
The Massachusetts jobless rate is in the middle of the pack among states, ranking 30th in October. A year ago, the state’s unemployment rate was 6.7 percent and the U.S. unemployment rate was 7.8 percent.
Though the unemployment rate has notched up since falling to 6.4 percent in April and May, the state has added jobs in recent months. In November the state added 6,500 jobs and revised estimates show 9,400 jobs added in October. The number of jobs in the state last month was 55,300 higher than a year earlier.
Falling behind the nationwide drop in the unemployment rate is an indication to some that the state’s approach toward taxation and business regulation has hampered business.
“We haven’t focused on our economy the way we should,” House Minority Leader Brad Jones told the News Service. He said, “The cost of doing business here on too many fronts is too expensive.”
Jones said state leaders have shown “hostility toward business,” citing Gov. Deval Patrick’s proposed $2 billion tax increase, the more modest tax package that passed this summer, and the Senate’s passage of a minimum wage increase without concurrent reforms to unemployment insurance.
Others had a more positive take on the jobs numbers.
“This was a pleasant surprise,” said Robert Nakosteen, a UMass Amherst economics professor and executive editor at Mass Benchmarks, who said the preliminary estimate was a “moderately strong jobs report.”
Nakosteen said he was particularly heartened by the growth of professional, scientific and business services, which he said were most at risk by recent federal budget cuts. He said he had hoped for a continuation of growth in the construction sector, which was relatively flat.
“I focus more on the jobs numbers than the unemployment rate,” said Nakosteen. He said, “I’m not really all that concerned that it’s now above the national rate.”
About 58,000 people in Massachusetts are scheduled to lose their federal unemployment benefits on Dec. 28 unless Congress extends the program, which costs roughly $25 billion per year. An unemployment extension was not included in the spending bill that cleared the U.S. House last Thursday and the U.S. Senate Wednesday evening. There were 245,700 unemployed residents in Massachusetts in November.
“I think Congress should certainly have a discussion and a debate about it,” Jones said, noting that money for unemployment insurance comes from the “employer community.”
Jones and House Speaker Robert DeLeo are of like mind that an increase in the minimum wage should be coupled with changes to unemployment insurance. Jones said lawmakers should look at shortening the amount of time that someone can receive benefits, changing the time it takes to qualify for benefits and should consider increasing the earned income tax credit.
“We’re costing the business community money,” said Jones.
The state’s unemployment rate last exceeded the national rate in May 2007, before the Great Recession, when the Massachusetts rate was 4.5 percent, or 0.1 percent above the rate of the nation as a whole.
After the nation and then the state dropped into a recession over the course of the next 12 months, and then began to recover in later years, Gov. Deval Patrick touted the state’s recovery as “faster and stronger” than the nation’s. The state’s unemployment rate fell faster than the nation’s for a time, especially between January 2010 and January 2011 when it dropped a full point.
“We are still in good shape here in Massachusetts,” said Goldstein, who said employers are interested in expanding into the Bay State. Goldstein said TripAdvisor is adding jobs in Massachusetts and Novartis is increasing its “footprint” even as it scales back elsewhere.
The Massachusetts Taxpayers Foundation this month estimated that Massachusetts will add 53,000 jobs in fiscal 2015, which would represent the largest annual jump in employment since 2000.