Economist: Mass. labor force at risk of losing experienced workers

BOSTON - As the state's population ages, the labor force will lose some of its most experienced and productive workers, except for those who can be persuaded to put off retirement, economist Michael Goodman told state budget writers recently.

It's a demographic challenge that Sen. Joan Lovely understands.

"Actually, my husband is over 65 and will continue to work because he has to," Lovely, who has been leading the Senate Ways and Means Committee, told Goodman during his testimony at an annual revenue hearing last week. "But I've also seen a number of our peers who have retired from their main employment and have gone back to work because they have to, because their retirement just won't be able to support them in the style they want to be supported."

The back-and-forth between Lovely, a Salem Democrat, and Goodman highlights how the people tasked with developing the state's $40 billion annual budget and analyzing the broader fiscal environment also contend with the same pressures faced by the economy as a whole.

Lovely mentioned her husband in asking Goodman if the people who are remaining in the workforce instead of retiring are doing so because they want to work, or because they need to.

Goodman, the director of the Public Policy Center at UMass Dartmouth, said the answer is both.

"Obviously if you work in a more physically demanding occupation, as we grow older, it becomes more difficult to sustain that, so it has varied by industry, but in some key sectors that aren't physically demanding, I think you have seen people delaying retirement both to catch up financially from where they might have been pre-recession, but also some of us have a hard time slowing down," Goodman said.

Lovely followed up with a second question, again drawing on her family's experiences.

Referencing her 27-year-old daughter who lives at "home with me, because she can't afford to move out yet" as she pays off student loans, Lovely asked how experts are counting the population of people whose student debt keeps them relying on their parents or otherwise prevents them from entering the housing market.

Goodman answered with an anecdote of his own, pointing to a 24-year-old son who's now able to pay his own rent in Boston.

"But of course, I'm the one who took out the loans, so it's sort of six of one, half dozen of the other," he said. "I do think it does place a burden on the next generation. There's been a debate in the real estate community for some time now, is it that millennials like roommates and small apartments and hate cars, or is it that they can't afford these things? I think it's more the latter than the former."

Lovely, according to a biography on the Legislature's website, went back to school after raising three children with her husband, Stephen, and now holds degrees from Salem State University and the Massachusetts School of Law.

Nine years after graduating law school, Lovely told Goodman she's still carrying debt from it, with a 6.5 percent interest rate.

Goodman replied that he's in his early 50s and still paying his student debt.

"I do think that student debt, as we've shifted the cost in the case of Massachusetts from the state to students and their families, the results are predictable," Goodman said. "Incomes have been flat and so the only way to keep up with rising costs is to borrow, and that's what we've been seeing, and the federal government has made it a little more difficult by charging much higher interest rates than I think any of us would be expected to pay on any loan we would take out, which adds insult to injury, frankly."

The Senate in April unanimously passed a bill that would increase oversight of the student loan industry in Massachusetts, with senators at the time saying the average student loan debt load in the state has increased by nearly 75 percent in the past 10 years. The bill (S 2421) remains before the House Ways and Means Committee.

Sen. Eric Lesser, a Longmeadow Democrat who sponsored the original version of the bill, has said he plans to file it again for the 2019-2020 session.