Examining what work could look like after the pandemic and its implications for economic development

Falling demand for office real estate and public transit, greater need for flexible child care and requirements for reskilling are some of the insights gained into the future of Massachusetts’ workforce. A recent report released by the Massachusetts Governor’s Office which draws extensively on material prepared by McKinsey and Company shines a light on a post-pandemic outlook for a state that has been heralded as one of the most attractive states for citizens to live, enjoying the third-highest per-capita income, a thriving venture capital market and a growing concentration of entrepreneurial start-ups. Yet, as the report notes, “Despite these competitive advantages, the effects of COVID-19 have profoundly challenged the Commonwealth.”

The report explores what work could look like in Massachusetts in both the near term (2025) and five years beyond that, including implications for economic sectors, commercial centers, local downtowns, and more. It anchors its findings in four overall themes:

• Changing ways of working, such as remote and hybrid arrangements, may shift urban core activities with far-reaching implications on transit, urban vitality, housing, local congestions and childcare needs. However, changing work patterns could also create more vibrancy in local downtowns and inspire placemaking efforts outside of the urban core.
• With the pandemic accelerating automation, e-commerce and digitization, up to 400,000 job transitions may be needed by 2030 according to the report, increasing the pace, scale, and breadth of reskilling for such job transitions.
• Additional and continuing inequities in the job market, highlighted during the pandemic, could also be exacerbated without focused action to transition people into higher-paying jobs and address longstanding inequities.
• The risk of future job growth moving outside Massachusetts is rising due to the high costs of living and doing business in the state.

Without giving specific policy fixes for the workforce challenges the state is facing, the report warns that Massachusetts, like many states, faces a host of challenges as employers and employees enjoy greater mobility in choosing where to work. The report outlines that to remain competitive the state will need to focus on reskilling residents, making the state more affordable, meeting the needs of housing and childcare, adapting to where people will spend time in the future and addressing head-on rising inequalities.

“Without proactive and focused action, Massachusetts risks losing population and job growth to more cost-competitive states,” it says.

The Baker-Polito administration said it is using a variety of tools to address the key findings of the report, including spending $2.9 billion in federal funds from the American Rescue Plan to build up the state’s housing stock, workforce, downtown economies and infrastructure.

The full report, Preparing for the Future of Work in the Commonwealth of Massachusetts, is available here.