For everlasting fame, it was a relative bargain: A somewhat obscure minister on his deathbed bequeathed half of his estate, totaling 779 pounds and a 400-volume library of classical and theological texts, to a small college that he helped found outside of Boston.
In gratitude, the school was renamed to honor the benefactor, John Harvard. Today, the institution that bears his name stands as one of the most recognized universities in the world. Harvard University, founded in 1636, two years before the eponymous donor’s death, is the oldest institution of higher education in the U.S.
Today, academia is big business for the Bay State. There are 114 colleges and universities in the state. The Boston area alone has 35 of those institutions, which in 2010 employed more than 42,600 people — 6.5 percent of the city’s jobs — and served about 152,000 students.
In fact, Massachusetts’ universities — including Harvard, Boston University and MIT — rank among the state’s largest employers. That’s one of the reasons Massachusetts has the most educated workforce in the nation, being the first state where more than 50 percent of workers hold a bachelor’s degree or higher.
Besides education and health care, other major industries in the state are finance, real estate and a growing technology sector. Tourism also is a major force, contributing more than $20 billion annually to the state’s economy. More than 27 million people each year visit the state for its history, museums and vibrant arts scene, among other things.
Massachusetts had a dozen companies on the Fortune 500 list in 2017, led by General Electric, insurance companies Liberty Mutual and Massachusetts Mutual Life, specialty retailer TJX, and aerospace and defense company Raytheon.
Massachusetts is one of six commonwealths in the U.S. The designation is in name alone as commonwealths are just like any other state. The term was favored by political writers in the years leading up to 1780, when the Massachusetts constitution was written. (Other commonwealths are Pennsylvania, Virginia, Kentucky, Puerto Rico and the Northern Mariana Islands.)
Per capita income in Massachusetts is well above the U.S. average, according to the U.S. Bureau of Economic Analysis. Bay State residents earned $63,344 a year in 2017 compared to $48,726 for the U.S. as a whole — the second-highest figure for all states. Between 2007 and 2017, the compound annual growth rate for Massachusetts’ gross domestic product was 1.9 percent, compared to 1.5 percent growth for the nation over the same time frame.
A survey of state employers earlier this year found that confidence in the state’s economy was declining but still strong overall, according to the Associated Industries of Massachusetts. The state has an estimated population of 6.9 million and about 10.5 percent of the population lives in poverty.
Home sales and prices
Sales of single-family homes have plateaued in the past three years after going on a post-recession upswing. The number of single-family homes sold reached a high of 57,599 in 2016, according to the Massachusetts Association of Realtors. About 1,000 fewer homes were sold statewide in both 2017 and 2018. Condominium sales also leveled off during the same period.
Massachusetts’ housing prices continue to climb. The median price for a single-family home reached $397,500 in 2018, up from $380,000 in 2017 and $355,000 in 2016. Earlier this year, Massachusetts Gov. Charlie Baker worried that the state’s booming economy could be threatened by the lack of new housing.
Building permits for single-family homes in general have been rising, with 7,278 issued in 2017. That’s down by a few hundred units from 2016, but up by more than 2,000 units in 2009 during the recession.
The scarcity of qualified workers remains a challenge for Massachusetts employers. An Associated Industries of Massachusetts survey of more than 1,000 employers found that nearly all had some concern about finding people with the skills and work ethic to compete. Uncertainty over immigration is adding to those worries.
Massachusetts had an unemployment rate of 3.1 percent this past January, which was tied for 12th lowest in the nation. The national unemployment rate was 4 percent during the same month. The Commonwealth never suffered as much as the rest of the nation during the Great Recession. The unemployment rate reached a high of 8.8 percent for just two months in 2009 and 2010. The national average was well above that for several months, reaching 10 percent in October 2009.
Delinquencies and foreclosures
Massachusetts’ delinquency rate for mortgages, defined as loans 30 days or more past due, was 3.8 percent as of December 2018, according to CoreLogic’s loan performance insights report. That’s down from 4.6 percent for the same month in 2017. The national delinquency rate for December 2018 was 4.1 percent. The foreclosure rate in the state stood at 0.4 percent in December 2018, down from 0.6 percent a year earlier and the same as the nationwide rate, according to CoreLogic.
The number of foreclosure filings as measured by defaults, auctions and real estate owned (REO) properties totaled 15,841 last year, according to Attom Data Solutions. That’s far lower than during the recession, but higher than in 2013 when 11,305 homes were in the foreclosure process. In 2008, the Commonwealth instituted homeownership-counseling programs and foreclosure-prevention centers. As of last year, these programs have helped 41,000 people, according to the Massachusetts Division of Banks.
What the locals say
“Overall, the indicators have been pretty strong in the state. There have been some concerns about the job growth slowing down. A good part of that is just because of available labor supply. There really isn’t much left on the bench right now to tap into in terms of labor-force growth. So, that’s one area of concern for the state. We’ve been doing quite well and it is particularly driven a lot by some of the emerging knowledge-based industries around life sciences and the tech economy.”
Director of economic and public policy research, UMass Donahue Institute
3 Cities to Watch
Few cities in America have such a place in history as Boston. One of the oldest cities in the Commonwealth, Boston has a population of 685,000 and is a center for finance, education and research in New England. Millions are drawn to visit the city each year for the Boston Marathon, Revolutionary War sites and the city’s many art and cultural offerings. Bizarrely, Boston was the site of a molasses-related disaster 100 years ago. In 1919, 21 people were killed and dozens were injured when a tank of 2.5 million gallons of hot molasses burst, sending an eight-foot wave of the dark brown syrup onto the streets, crushing buildings and sweeping away railroad freight cars.
Known as “the Heart of the Commonwealth,” Worcester is home to major health care institutions UMass Memorial Health Care, UMass Medical School, Reliant Medical Group and Saint Vincent Hospital, which employ more than 20,000 in central Massachusetts. Worcester is the second-largest city in Massachusetts with a population of 185,000. The median home price for the community was $241,400 as of this past February, according to Zillow. The monkey wrench, the typewriter and the smiley face all were invented in Worcester.
The western Massachusetts city of Springfield is home to Fortune 500 company MassMutual and firearms manufacturer Smith & Wesson. The city of 155,000, as well as the surrounding region, haven’t seen the same boom as the rest of the state, with the unemployment rate in Springfield staying consistently higher than the rest of the state for years. The median home price for Springfield was $160,000 as of this past February, far below the $600,000 median price that homes are fetching in Boston. Prices were actually lower earlier this year than in 2007 at the start of the housing crisis. Springfield is the birthplace of basketball. In 1891, James Naismith invented the game to give youths something to do indoors during wintry weather. Theodor Geisel, better known as Dr. Seuss, was born in Springfield in 1904.
Sources: Attom Data Solutions, Boston Redevelopment Authority, Cambridge Office for Tourism, City of Springfield, CoreLogic, Fortune, History.com, Massachusetts Association of Realtors, MassLive Media, Merriam Webster, NBA, Only In Your State, The Boston Globe, The Harvard Gazette, U.S. Bureau of Labor Statistics, U.S. Census Bureau, U.S. News & World Report, UMass Donahue Institute, U.S. Bureau of Economic Analysis, WAMC/Northeast Public Radio, Western Mass News, Worcester Business Journal, Worcester Historical Museum, Yankee Magazine, Zillow