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An Electronic Publication of the North Central Massachusetts Chamber of Commerce
Mass. Eyes Trillion-Dollar State Club
Source: Servicio de Noticias de la Cámara de Representantes
Author: Colin A. Young
The broad goal of the economic development plan the Healey administration put forward this week is to build upon the state’s strong points to keep Massachusetts an ideal place to live, raise a family and grow a business well into the future.
But another aspiration was revealed Wednesday when Economic Development Secretary Yvonne Hao detailed the plan for lawmakers — for Massachusetts to join the small club of states that have a gross domestic product of $1 trillion or more.
The plan’s vision matches up traditional economic development topics like talent attraction and retention, boosting housing production, making public transportation more reliable, and streamlining access to state resources with Healey’s specific emphasis on values like inclusion as well as state policies around reproductive and civil rights. It aims to “lengthen our lead” in sectors like life sciences, health care, and advanced manufacturing, while also seizing opportunities to become new leaders in climate tech and tourism.
Photo Credit: Servicio de Noticias de la Cámara de Representantes
“This is the way we become more than a trillion,” Hao said in response to a question from Sen. Barry Finegold, co-chair of the Joint Committee on Economic Development and Emerging Technologies. She added, “The majority of our economy is aligned around industries that are growing — health care is growing, life sciences is growing, climate tech is growing, advanced manufacturing is growing, AI is growing, robotics are growing. So we have a ton of tailwinds in growth sectors and so we just need to make sure that we continue to lengthen our lead and continue to invest and continue to implement all of these initiatives here. Those sectors are growing already. If we can just continue to — not even just hold our share, but even increase our share, we’re going to become a trillion dollar GDP.”
GDP measures the market value of the goods and services produced in a state. Massachusetts had a GDP of $691.46 billion in 2022, according to the U.S. Dept. of Commerce’s Bureau of Economic Analysis. Only five states had a GDP equal to or greater than $1 trillion last year: California, Texas, New York, Florida and Illinois.
The discussion of a $1 trillion GDP as a goal for Massachusetts spurred Sen. Liz Miranda to highlight that using GDP as a measurement has “fostered a fixation on growing the pie that sometimes ignores” that economic growth is not spread evenly across the state but often concentrated in a select few areas.
Massachusetts is the most educated and wealthiest state in the country, the administration’s economic development plan says, but it is also the third-most unequal of the states, based on 2022’s Gini coefficient, a common measure of inequality that economists rely upon.
Miranda said she was “really feeling like we can’t totally evaluate the effectiveness of our economic development policies without a consistent, high-quality measure of how economic growth is distributed in the commonwealth, particularly across geographic and non-geographic communities who have historically been in lowest percentiles and living in the margins.”
“I know it’s incredibly important, we want to grow to a trillion. But how do we actually measure that so we actually know the truth about how it’s being distributed across the commonwealth?” Miranda asked Hao.
The secretary said she sees there being two ways to achieve equality: “We can be more equal but have everything stay the same. Or the real way to get equity, I think, is to continue to grow and have everyone lift up and to close the gap.”
“And so I think we need to measure multiple metrics. So looking at GDP overall is important, looking at GDP growth is important. But looking at the gap, and closing the gap, is really important. And so the Gini coefficient is a number that I pay a lot of attention to. I’m a former economist, and it is the universal way to look at income inequality. In our state, we want to look at Gini coefficient by different areas — by race, but also by region. Our gap in race is quite dramatic. So if you look at kind of average income by race, it’s a $20,000-$30,000 difference. It’s also equally dramatic by region. Western Mass. versus Eastern Mass., even amongst people of the same race, is $20,000 or $30,000. And so we have a lot of work to do on thinking about income inequality.”
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