Dismal unemployment rate in Massachusetts not the end of the story
The state’s 16.3% unemployment rate — fourth worst in the nation — could slow any recovery, but don’t bet against another Massachusetts miracle, one fiscal hawk says.
Massachusetts is tied for fourth worst in the U.S. along with California and Rhode Island, according to May figures. Tourist-heavy Nevada and Hawaii top the list, with jobless rates last month of 25.3% and 22.6%, respectively.
Michigan falls in next at 21.2%. The national jobless average was 13.3% in May.
“You’re looking at a very long, and very painful recovery,” said Jared Walczak, director of state tax policy at the national Tax Foundation. “It will mean belt tightening, some of it painful.”
But it’s not all gloom and doom, said Paul Craney of the MassFiscal Alliance.
“The private sector is very intuitive and will do everything it can to thrive, especially seasonal businesses,” Craney said. “There is hope because the private sector will do all they can to salvage their businesses and careers.”
Massachusetts, unlike other southern and western states, seems to have also fought back the spread of the coronavirus. That could also allow for job growth as a vaccine moves closer to reality.
Walczak said most state governments are in a “wait-and-see mode” as the coronavirus still festers. But, he added, “there’s a risk in waiting too long” to make cuts.
Suffolk District Attorney Rachael Rollins Monday announced she is rolling out furloughs in her office during the month of July, as the Herald first reported. And UMass is considering layoffs, furloughs and salary reductions to climb out of a feared budget gap, college brass announced Tuesday.
Walczak said the high unemployment rate in Massachusetts has forced the Baker administration to signal they may need federal loans to keep paying the jobless.
“It’s a near certainty that in the coming weeks Massachusetts will be relying on federal loans to make up unemployment payments,” Walczak told the Herald, adding the state was one of a dozen to declare they may need the cash infusion.
If those loans are not paid back — usually in two years — unemployment insurance rates paid by businesses will jump.
Also, Walczak added, pushing people back out to look for work will flip the equation of paying laid off workers to just shelter at home.
from Boston Herald https://ift.tt/3fMCNfS
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