Massachusetts

Massachusetts: life at the bottom

Massachusetts was the worst performing state in the 2014 EPI state rankings, with the EPI score of 80.4% or D+ level. Despite below US-average inflation and unemployment rates, GDP growth was negative and the budget deficit was the highest in the country.

Financial services is the largest industry in Massachusetts, with major software firms, brokerage firms, and insurance powerhouses such as Liberty Mutual and New York Life having their headquarters here. Technology is the second biggest industry with biotechnology pulling billions into the state.

However, despite high rankings in technology and education surveys, EPI economic performance in 2014 was relatively poor. Unemployment in Massachusetts was below US average at 5.7% in 2014, its lowest rate since the Great Recession in 2008. The economy turned into recession in 2014 with a negative GDP growth of -1.1%, the state’s first recession since 2009.  Massachusetts’ budget deficit has been relatively high over the past five years, peaking at 20.6% in 2012. While the deficit has continued to decline since then, the state still maintained the highest budget deficit in the nation at 11.4% in 2014. The major reasons were increases in nondiscretionary program spending as well as an unexpected drop in one-off revenues, such as licenses fees, etc.