Impact of Covid-19 on the Massachusetts EconomySeptember 29, 2021 12:49 pm
This last year-and-a-half has been a roller coaster for many families and business leaders across the Commonwealth and the nation. The initial worry about the spread of the potentially fatal virus quickly expanded into worry about closing businesses, loss of employment, and a major downturn for our local and national economy. Where does Massachusetts economy stand right now in terms of recovery and rebuilding?
While the economic situation is quite fluid at this time, especially given the delta variant of the coronavirus that is currently spreading around the nation, it is important to take a broader look at key indicators of how our state is doing such as unemployment rates and business closure rates.
When the coronavirus first emerged into the national headlines, the unemployment numbers for Massachusetts stood at a historically low number of 2.7%. UMass Amherst economist Rod Motamedi said this was the lowest recorded in Massachusetts since 1976.
During the first few months of the pandemic, unemployment rose to a historic high according to the Pioneer Institute Public Policy Research. The height of the shutdown brought our numbers in the Bay State to troubling levels. Some counties like Essex, Norfolk, Suffolk, and Middlesex counties saw their unemployment rates soar into the mid 20th percentile. Counties on the Cape saw their numbers climb into the 30th percentile.
As of this writing, Massachusetts has bounced back substantially as businesses reopened. The Commonwealth currently stands at 4.9% unemployment and is ranked 24th in the nation.
One program that helped our local and national economy from this devastating outcome of the pandemic was the Payroll Protection Program. Massachusetts had a total of 220,374 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. The industries that benefited the most from this program included: restaurants, taxi/transportation, salons, offices of lawyers, and real estate offices.
To assist the unemployed, Massachusetts Governor Charlie Baker, along with the Massachusetts Department of Unemployment Assistance began distributing a $300 boost to unemployment benefits as well.
According to a report from Facebook and the Small Business Roundtable, the peak of the pandemic (May 2020) witnessed the closing of 24% of small and medium-sized businesses.
An April 2021 report on CNBC, “individual states reported that certain demographics were getting hit harder than others: 27% of minority-led small and medium-size businesses reported closures, compared with 18% of others. Female-led businesses saw 25% closure rates, while 20% of male-led businesses closed.”
The Massachusetts restaurant industry was particularly hard hit with closures due to covid restrictions. In February of 2021, the Massachusetts Restaurant Association said “about 4,000 businesses in the state closed their doors permanently because of COVID-19.”
In June 2021, the Baker-Polito Administration Announced a plan to invest $2.8 billion in federal COVID-19 funding to support economic recovery, communities hit hardest by pandemic. The key priorities of the plan would include: housing and homeownership, economic development and local downtowns, job training and workforce development, health care, and infrastructure.
In a recent interview Baker stated that, ““Our proposal will immediately invest $2.8 billion toward key priorities that will help jump-start our economic recovery, with a particular focus on those hit hardest by COVID-19, such as communities of color.”
Continue to follow our North Shore Conversations and updates on where the Bay State stands in regards to economic recovery.
Categorised in: economy
This post was written by Mike Sperling