Since the beginning of the coronavirus pandemic, Massachusetts has led the way in unemployment — with the highest unemployment rate in the country for the month of June, according to new federal data.
To understand why the state has such a high unemployment rate, it’s important to consider its pre-pandemic employment rate, says labor economist and Harvard professor Richard Freeman.
“Massachusetts had a higher employment rate, which means we were booming, very strong, lots of jobs,” Freeman said. “The universities and the tourists were going to come in every year, that was going to give us a boost, we were doing well … and then, bang. We got knocked down, clocked.”
Newnumbers released Thursday from the U.S. Department of Labor, which exclusively look at unemployment insurance claims, puts Massachusetts at 14.5% unemployment — still one of the highest rates in the country, but now behind California, Connecticut, Georgia, Hawaii, Louisiana, Nevada, New York and Puerto Rico.
States with a higher number of jobs have more to lose, Freeman said. South Dakota, which has the lowest unemployment rate — 4%, according to the DOL data — has a much smaller labor force than the states that top the list.
This data also doesn’t include the population of young unemployed Massachusetts residents who are not covered by unemployment insurance. “The people who graduated from a local university, and they are going home to wherever they're from because they can't get a job,” Freeman said. “It’s a burden for young people, and we’ve been a place that was attracting young people.”
Massachusetts has also relied heavily on the entertainment, service, hospitality and education sectors — all industries that were heavily affected by the pandemic.
“We had a set of industries where people were interacting with people,” Freeman said, “and now we're struggling.”
Those industries are also predominantly female, which contributes to a higher rate of unemployment among women on a national scale, the data show. On the other hand, industries like medicine — which has seen a demand during the pandemic — are still predominantly male, both in Massachusetts and around the world.
Regardless of the speed at which a vaccine can be invented and distributed, economically speaking, things will never “return to normal,” Freeman says.
“It’s not going to be anything like the full level of jobs,” he said. “There are not going to be students all over Harvard Square or all over UMass Amherst. I think it's going to be slow, and I think it'll probably keep being slow.”