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Massachusetts Magnet: Bay State Outdoes Connecticut As Job Magnet In Recovery

By MARA LEE

January 24, 2011

For a good bit of the last year, Boston was adding jobs faster than any metro area in the nation other than Dallas and Washington, D.C.

That's right, the biggest city in our normally slow-growing region, in a state nicknamed "Taxachusetts," had stronger growth than almost all those Sun Belt cities that Northeasterners envy.

Alan Clayton-Matthews, a Northeastern University economist who makes forecasts for the New England Economic Partnership, called the trend "spectacular job growth." If someone had told him in 2009 that Massachusetts would add more than 38,000 jobs through November 2010, he said, "I would've been highly skeptical."

Boston's hiring pace is drawing workers from around the world. Among those moving to the region was Connecticut resident Mike Bigda, who lives in Framingham during the week and returns to his home in Manchester on weekends.

Bigda, 55, laid off by Travelers in Hartford, landed a job in October as a vice president for Delphi Technology, a Massachusetts firm that produces software and related services for the insurance industry.

"I was looking actively in Hartford, at the insurance companies," he said. "With my background, I would've thought I would be an ideal fit with an insurance company."

Technology firms, of course, have long been a staple of the region's economy, and that sector drove the so-called Massachusetts Miracle recovery in the 1980s — the last time the Boston area outpaced the United States in economic growth.

Greater Boston's other major drivers — health care and education — also help to explain the why Massachusetts was a job magnet in 2010. Still, the state's success in 2010 was a surprise to many experts, not just to Clayton-Matthews.

Massachusetts firms hired more than twice as fast as Connecticut employers in 2010. "In effect, Connecticut is barely recovering compared to Massachusetts," said Andres Carbacho-Burgos, the economist at Moody's Analytics who follows Connecticut's economy.

From January to November, Massachusetts employers added 38,300 jobs, an increase of 1.2 percent, and unemployment dropped to 8.2 percent from 9.5 percent. That was the state's best job growth in more than 10 years.

In Connecticut during those 11 months, the jobs increase was less than one-half of 1 percent, and the jobless rate was the same in November as when the year began: 9 percent. The stagnation mirrors the nation's poor job creation.

And it's not just jobs, although that's the most important measure.

--Starting in 2009, Massachusetts reversed its long trend of losing population to other states.

--The Boston office market is healthier than the nation's, and far better than Hartford's.

--Payroll withholding tax collection was up by more than 7 percent in the first half of 2010 according to a report for the Kitty & Michael Dukakis Center for Urban & Regional Policy at Northeastern — a sign that the new jobs are good ones.

Virtuous Cycle

Medical devices are one industry driving growth in eastern Massachusetts. Covidien, a surgical equipment maker whose U.S. headquarters is in Mansfield, Mass., near the I-95/I-495 intersection south of Boston, moved 300 jobs out of Norwalk as it closed that office last year.

Workers in Norwalk knew their office would close, but expected to stay in Connecticut.

"We thought for sure we were going to shut down and all go to North Haven," where Covidien has a large plant, said Shaun Hilmar, 36, who worked in customer logistics for the company for nine years until last May.

Instead, he learned that about 85 percent of the Norwalk work would move to Mansfield. All the Connecticut workers were offered the chance to re-interview for their jobs, but Hilmar didn't follow his $44,000-a-year job because he had just bought a townhouse with his girlfriend, who earns more money.

He hasn't been able to find another job since, and is trying to become a real estate agent and hopes to land a part-time package-handling job. "It's probably going to be a combination of things. I'm resigned to that," he said.

While federal stimulus funding that pumped up scientific research surely helped with hiring at universities in Massachusetts, as did the thousands of students sitting out the poor job market in grad schools, it's a mystery why software company hiring was so much stronger in greater Boston than in California's Silicon Valley last year.

Novartis, a pharmaceutical company, hired 433 people in Cambridge, Mass., in 2010, and while some of that was replacing people who left, the company announced this month that it would double the size of its office and lab complex in 2011, hiring more than 200 people. It already has about 2,100 employees there.

Forrester Research added 200 jobs in 2010 to its Boston staff of 900, and plans to add at least another 175 more this year.

Boston-area colleges grant the highest number of bachelor's degrees each year of any metro area in the country. About 375,000 students attend college and graduate schools in greater Boston. The result: Each year, the city gains more recent college graduates than it loses.

Boston-area graduates who grew up in Maine, Connecticut, Georgia, New York, India, China, Scotland and other places find jobs in Massachusetts at companies like Novartis, Microsoft, Google, Cisco Systems, Forrester Research or Shire Pharmaceuticals, or at a home-grown company like Akamai Technologies, founded by MIT professors. Part of the reason, the Dukakis Center report said, is that Boston-area colleges have strong ties to the tech community.

"This is sort of a self-reinforcing trend, areas that have a lot of college graduates also tend to attract migrating college graduates," said Clayton-Matthews, the Northeastern University economist. "For young professionals, Boston is kind of a fun city to be in. Does Connecticut have a city like that?"

Connecticut, in fact, does not have a city with the kind of nightlife, professional sports, boutique shopping and sidewalks full of pedestrians that Boston and Cambridge have, though New Haven and Greenwich both have one or two of those elements.

While Hartford-area high school graduates have been landing in Boston after college for decades, the differing rates of recovery makes that even more likely now.

"There's a chicken and the egg problem with the jobs," said Clayton-Matthews. "A highly educated workforce attracts jobs, but you have to have jobs to attract a highly educated workforce."

Will hundreds of laid-off insurance professionals move there too, depleting Hartford's talent base?

Carbacho-Burgos says that as long as Connecticut's job growth accelerates in the next two years — and he expects that it will — "its migration losses will be fairly minimal. It's only if recession or slow growth persists that you're going to see a drain of jobs over the border."

Commuter Marriage

Mike Bigda was hired as a vice president at Delphi Technology — with a $55,000 raise — in October. In September 2009, Bigda had been one of 60 people laid off in his area at Travelers. He had been there five years, and managed 25 people.

The new job in downtown Boston is a return to the executive suite, where he had been at a previous job at a Connecticut tech firm serving insurance companies. He was laid off from that job in 2003, after 16 years.

"I was looking for really anything in a leadership function for insurance companies or technology companies," he said of his 2009 job hunt. "I immediately opened my search countrywide, because I didn't want to take a chance, knowing the economy was depressed, limiting my scope geographically. If it was a really good opportunity, I would move."

In a year of searching, he was on the short list for a vice president's position at a Connecticut technology company, but it decided to leave it vacant until 2011. Two insurance companies interviewed him. One job wasn't filled, and one they filled internally.

A former co-worker is now at Delphi, an insurance software company with about 50 employees in Boston, 50 in Shanghai and 50 in New Jersey, so when Bigda saw the vice president's job, he leaped at it.

His wife continues to live in Manchester, along with their grown son, and Bigda stays in a $1,049-a-month Framingham apartment during the week. She had gotten a promotion, and wanted to keep working in Hartford for now. He doesn't like being separated from his wife during the week, though she does sometimes come up Wednesday night.

"Do I miss her? Yes I do, to be perfectly honest with you," Bigda said. "We could move in three years and still have a relocation package. A lot of that will depend, if her job's going well, and she really likes it, we'll see how this living apart goes."

But Bigda, whose children both live in the Hartford area, said, "There's reasons to be in Connecticut. …That would probably have been preferred."