Preparing for the Future of Work in the Commonwealth of Massachusetts
Summary
A report titled Preparing for the Future of Work in the Commonwealth of Massachusetts, with the file title Massachusetts Future Work Report 2021. The table of contents lists an executive summary, context and approach, top eight insights for the Commonwealth, regional implications and a methodology, with insights on demand for office real estate, hybrid work, public-transit ridership, business travel and reskilling. It states that the report draws on fact-based research and interviews conducted by McKinsey & Company. The executive summary states that Massachusetts is ranked first in patents per capita and that an Advisory Council of fourteen business and education leaders was convened to provide input.
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Cite this document
“Preparing for the Future of Work in the Commonwealth of Massachusetts.”
Original at www.massworkforce.com. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/massachusetts-future-work-report-2021/
, SHA-256 8b17697c65a04c0448746be1649f6c4d0f6304a21a40233d1b1386d957b8b333.Full text
PREPARING FOR THE
FUTURE OF WORK IN
THE COMMONWEALTH
OF MASSACHUSETTS
TABLE OF CONTENTS
01 02
Executive 04 Context and 09
summary approach
03
Top eight insights for the Commonwealth 15
03 – 01 03 – 02 03 – 03
Demand for office real estate 18 Hybrid work will likely drive 23 Public-transit ridership is 26
may fall as workers spend demand for flexible childcare expected to fall, with the
more time in residential options, requiring the steepest decline likely in
areas due to hybrid work childcare business model commuter rail
to evolve
03 – 04 03 – 05
Business travel may be structurally reduced from pre-pandemic 30 Reskilling may be required at 33
levels, which could impact the hospitality and airline industries an unprecedented scale and
and hamper Massachusetts’ competitiveness pace
03 – 06 03 – 07 03 – 08
The Commonwealth 41 Existing equity challenges 44 Housing options that work 47
population is likely to grow, will intensify for all will be key to retaining
albeit more slowly than pre- and attracting people into
pandemic the state
2
04
Regional implications 50
04– 01 04 – 02 04 – 03
Boston/Cambridge 53 Greater Boston Urban 56 Gateway Cities 58
Residential
04 – 04 04 – 05 04 – 06
Suburban Greater Boston 61 Suburban – Non-Boston 64 Rural 66
(Tourism based economies)
04 – 07
Rural 68
05 06
Going forward 70 Methodology 72
This report draws on extensive fact-based analyses, research and interviews conducted by McKinsey & Company.
3
01
EXECUTIVE
SUMMARY
The Commonwealth of
Massachusetts has experienced
vibrant economic growth in recent
years, propelled by a talented
workforce and good overall quality
of life. The state has become a global
leader in many disciplines, including
healthcare, biotechnology, sciences,
engineering, higher education,
technology, and finance.1 It is ranked
as one of the most attractive states
for citizens to live, and its per-capita
personal income is the third-highest
in the nation.2 Among all 50 states,
Massachusetts is ranked first in
patents per capita, first in venture
4
capital funding per GDP, and fifth in the number a broad range of topics and regions within the
of company headquarters per capita.3 Bloomberg’s Commonwealth to inform perspectives in this
annual State Innovation Index ranked the state report. In addition, an Advisory Council10 was
as “the most innovative state in America,” thanks convened, comprised of fourteen business and
to its growing concentration of entrepreneurial education leaders from the Commonwealth across
start-ups over the past decade.4 Access to top- diverse geographies and industries, to provide
notch educational institutions and to highly skilled input and feedback on the emerging future of
labor pools has attracted employers of all sizes and work impacts.
served as an important driver of Massachusetts’
growth. Massachusetts benefits from a moderate Many of the factors impacting the future of
tax regime and is ranked 21 in terms of overall work (such as rising income levels and an aging
tax burden by state.5 The state’s public-school population) are not new. However, COVID-19
students place in the nation’s top tier for academic and the substantial shifts in how Massachusetts
performance,6 and the Commonwealth is home to residents work over the past year have
122 institutions of higher education.7 accentuated and accelerated many of these
factors (such as the use of e-commerce and the
Despite these competitive advantages, the effects pace of adoption of automation). Moreover, new
of COVID-19 have profoundly challenged the factors have emerged (such as the spread of
Commonwealth. COVID-19 was not only the worst remote and hybrid work at-scale and a reduction
public health crisis of the last hundred years, but in business travel). The degree of change and
also an economic calamity that caused 560,000 resulting shifts in how Massachusetts residents
residents to become unemployed,8 and half of all live and work vary across regions, industries and
small businesses to close at the pandemic’s height occupations in the Commonwealth – as well as
in April 2020.9 across gender and race.
As we emerge from the pandemic, the study To complicate matters, how these factors will
outlined in this report, Preparing for the Future of evolve has real uncertainty; it is difficult to
Work in the Commonwealth of Massachusettes, determine, for example, how structural the decline
explores what work could look like in in business travel will be, or whether there will
Massachusetts in both the near term (to 2025) be a surplus of commercial real estate in urban
and the longer term (to 2030). It explores what areas, or how deeply the adoption of hybrid,
the implications might be for the Commonwealth work from home models will decrease public
and its residents across its regions, economic transportation ridership. With these uncertainties
sectors, commercial centers, local downtowns, in mind, three potential scenarios were considered
transportation, and public spaces. for how these factors may impact the future of
work in the Commonwealth. Furthermore, the
This work aims to provide a fact base and Commonwealth is not homogeneous, and this
assessment of current and future trends to inform report explores seven regional archetypes to assess
any workforce and economic interventions that how the challenges and opportunities arising from
might be needed to address recent challenges the future of work could be experienced differently
and to prepare the state and its citizens for across the state.
a successful future. Extensive research was
conducted, including more than 60 analyses, This report is anchored in eight core insights that
discussions with business leaders, resident and could cause the most critical shifts impacting the
business surveys, and expert interviews across future of work in the Commonwealth. These are: (1)
5
reduced demand for office real estate as workers work models may need more sporadic, part-time
spend more time in residential areas due to hybrid childcare that is closer to home, requiring the
work; (2) the need for affordable, flexible, childcare childcare business model to change and adapt to
options that cater to the needs of the future; (3) the new flexibilities in work schedules Reduced
ridership declines in public transit (particularly business travel would also strongly affect Boston,
commuter rail) (4) reduced business travel; (5) a as approximately 40 percent of Logan Airport
need for reskilling at an unprecedented scale and traffic comprises business travelers12 (compared
pace; (6) slowing population growth; (7) greater to about 20 percent nationwide)13. Hybrid work
equity challenges; and (8) capacity-constrained and reduced business travel may also have
housing options that meet the requirements of second-order effects on businesses (and their
all. These eight insights are summarized into the employees) that depend on commuter and
four overall themes for the Commonwealth in the business travel– particularly in the retail, food
future that we highlight below. and hospitality sectors. Our analysis suggests a
significant challenge for commuter rail, which
First, changing ways of working – could experience a 15 to 50 percent loss of its pre-
pandemic ridership base, depending on the extent
such as hybrid and remote work
of remote work adoption. Additionally, this analysis
– may shift the center of gravity expects demand for office real estate to decrease
away from the urban core, further by as much as 10 to 20 percent if remote / hybrid
reinforced if business travel work trends continue. On a positive note, this shift
decreases. could create more vibrancy in local downtowns,
with more people working from home creating
Our analysis shows that around a third of opportunities for businesses in these downtowns
Massachusetts residents can work remotely – a as well as inspire placemaking efforts that would
higher percentage than in most other US states, improve the attractiveness of areas outside the
since the Commonwealth has a high share of jobs urban core (placemaking defined as planning,
in sectors that lend themselves to remote work, design and management of public spaces such as
such as technology and professional services. creation of community parks and art installations).
Surveys and interviews indicate that many remote
workers could continue with hybrid work in the Second, the pace, scale, and
future. The impact to urban cores will depend on
breadth of reskilling needed for
the extent of this hybrid work: a day of remote
work per week could have modest impact, while job transitions must be much
an average of three days or more of remote work greater than before the pandemic;
per week would have more significant impact. creating the workforce of the future
Previously, the urban cores in Massachusetts will require extensive, thoughtful
had a large commuter population (for example,
preparation.
approximately 245,000 workers traveled into
Boston from surrounding areas in 201911). A shift
to remote/hybrid work and spending more COVID-19 accelerated automation, e-commerce
time closer to home could have far-reaching and digitization as residents and businesses found
implications on transit, urban vitality, housing these interventions useful as they worked to
(both where housing is needed as well as types curtail physical proximity. If these trends continue,
of options on housing), local congestion and up to 400,000 job transitions may be needed
childcare needs. For example, parents in hybrid by 2030, with 75,000 employees having to jump
6
before the pandemic - will likely exacerbate these
multiple wage levels. This would require one of the
problems. Beyond a slower economic recovery, as
largest reskilling efforts that the Commonwealth
we look ahead, automation and reskilling needs
has ever undertaken. If done correctly, the effort
are likewise expected to have greater impact
could lead to a vibrant Massachusetts economy
on women, young people, people of color and
with new job creation absorbing the workforce people for whom English is a second language.
released by automation trends. In particular, there For example, the automation of office work will
could be substantial growth in healthcare (which likely affect women disproportionately, given
could produce 210,000 to 235,000 more jobs by that women represent about 85 percent of
2030) and in new economy sectors like artificial administrative occupations such as assistants,
intelligence (AI), clean energy, and biotechnology. secretaries, payroll clerks and receptionists in
This growth could be held back, however, if the Commonwealth. Hispanic workers are more
reskilling is unable to supply sufficient talent of strongly represented in the food and hospitality
the right capability, or if population growth and occupations, which by 2030 are expected to
in-bound migration slows growth in the available experience significant job losses due to future-of-
work trends.18 The Commonwealth maybe able
workforce.
to take advantage of opportunities to transition
people into higher-paying jobs, and to address
Third, the pandemic has already some of the longstanding inequities across the
exacerbated pre-existing inequities state – but without focused action it’s likely that
inequities will deepen.
for many and as we look ahead
the future of work will not be Fourth, the risk of future job growth
experienced equally across the moving outside Massachusetts is
Commonwealth. rising due to the high costs of living
For example, while many white-collar workers
and doing business in the state.
enjoyed the benefits of remote work, many
women, ethnic and racial minorities, the Remote work enables greater mobility for both
relatively less educated, and younger populations employers and employees, thus lowering the
experienced significant disadvantages. barrier for jobs and residents to leave the state
Unemployment in the Commonwealth peaked or for companies to place jobs and recruit talent
in April 2020 at 16.4 percent – more than 5.4 elsewhere. To remain attractive, Massachusetts
times pre-pandemic levels14 – and remains at must double-down on the fundamentals, as
6.4 percent (2.1 times pre-pandemic levels) as
validated in numerous surveys and conversations
of April 2021 with more than 240,000 workers
with residents and business leaders. In interviews
unemployed in the Commonwealth.15 Black
with business leaders, regulatory burdens, the
workers in Massachusetts faced unemployment
high cost and complexity of doing business,
rates that were approximately 13 percentage
points higher than rates among other racial and access to talent came up consistently as
groups in 2021.16 Nationally, job recovery for key challenges that impact Massachusetts’
women coming out of the pandemic is expected competitiveness. Interviewees went as far as
to occur about 18 or more months later than to say that they were considering looking at
for men, and for those with less education or other states to expand their businesses or had
income, recovery could happen one to two years heard of other peer, Massachusetts-based
later.17 The picture is expected to be no different companies that were seeking to move their
for the Commonwealth, and a lack of access to businesses to other states with a lower-cost of
affordable, flexible childcare – a challenge even doing business. To capture new job growth, then,
7
the Commonwealth will likely need to address fueling. Without proactive and focused action,
these challenges while also working to remain Massachusetts risks losing population and job
the nation’s top hub for talent. In particular, the growth to more cost-competitive states. But
cost of living in the state is seen as a potential if Massachusetts can rise to the challenge and
barrier to retaining and attracting talent. In accomplish these goals, the opportunity to create
our surveys, residents highlighted affordability an inclusive economy that provides opportunities
as the top determinant when deciding where for everyone and remains an attractive place for
to live, especially in the context of remote and businesses and residents could become the next
hybrid work. Massachusetts is among the lowest- chapter for Massachusetts.
ranked states for affordability and has some of
the highest housing costs19 and most expensive
childcare services20. Our analysis highlights need
for up to 125,000-200,000 additional housing units
by 2030 to bring Massachusetts up to national
vacancy benchmarks and 25,000-30,000 additional
childcare workers to provide sufficient and flexible
childcare. By investing in these fundamentals,
addressing the challenges that businesses believe
to be impeding Massachusetts’ competitiveness,
and continuing to maintain access to top-notch
educational institutions and to highly skilled labor
pools, Massachusetts can continue to win the fight
for job and talent growth.
With vaccination well underway, the worst of
the COVID-19 pandemic may soon be behind us.
Massachusetts (like many states) now face a host
of serious challenges – and opportunities - as
residents and businesses adapt to the future of
work. Remote and hybrid work offers employers
and employees greater mobility in choosing where
they want to work, but it raises the imperative for
Massachusetts to remain competitive. This means
leaning into its strength as a bastion for world-
class talent by reskilling and equipping residents
with the skills needed for future occupations
and retaining them with improved affordability
and meeting the fundamental needs of housing
and childcare. It means ensuring Massachusetts
remains an attractive state for employers to
create future jobs. It means adapting to where
people will spend time in the future and ensuring
offices, business, leisure and retail adapt to these
as well. And it means addressing head-on the
rising inequalities that many of these trends are
8
02
CONTEXT
AND APPROACH
COVID-19 posed profound challenges
for the Commonwealth. The significant
job losses resulting from COVID-19
have deeply affected Massachusetts’
economy. Coming out of the pandemic,
the Commonwealth now turns to the
question of what the future of work
in Massachusetts might look like and
what the implications might be for the
Commonwealth and its citizens across its
regions, economic sectors, commercial
centers, local downtowns, transportation,
and public spaces.
9
It is critical to examine which COVID-related needed to address the challenges of the past ~15
disruptions could endure, which trends have months and prepare the state and its citizens
accelerated or shifted, and what that might for a successful future. To achieve this end,
mean for maintaining the Commonwealth’s this report draws on more than 60 analyses
competitiveness as an attractive place to work. (Exhibit 1) from publicly available data as well
Sound research and an assessment of current and as data and assumptions from Commonwealth
future trends can form the basis for workforce and agencies, discussions with experts and business
economic interventions that will both address the leaders, and surveys of business and consumer
challenges of the past 15 months and prepare the communities across the Commonwealth. The
state and its citizens for a successful future. objective is to help the Commonwealth determine
where and how interventions may prove most
The study outlined in this report, Preparing for effective considering the challenges and potential
the Future of Work in the Commonwealth of opportunities resulting from COVID-19. As such,
Massachusetts, explores what work could look this report is meant to provide insights based
like in Massachusetts, in the near term (to 2025) on currently available information and does
and the longer term (to 2030). This work aims not seek to provide specific advice or policy
to provide the fact base and an assessment of recommendations. Its content is not intended to
current and future trends to inform workforce be a forecast or prediction, and many of the factors
and economic interventions that might be considered are subject to change.
Exhibit 1: Tabulation of the analyses informing the future of work in the Commonwealth.
Module Supplemental analyses
Employment • Employment by sector by scenario to 2025-30, including sizing of trends for business travel, remote work,
automation, e-commerce, rising incomes, aging population, etc.
• Employment change by occupation by scenario to 2025-30
• Workforce Development Area (WDA) -level analysis of employment (by scenarios and sectors) to 2025-30
• Transition gap analysis by scenario, by county to 2025-2030
• Wage quintile transition analysis by scenario, by county 2025 – 2030
• Time spent using skill in each skill category by wage quintile in MA
• Labor demand transitions made from 2007-2019 by minor standard occupational classification (SOC)
code
• MA net payroll employment gains and losses by detailed SOC code 2007-2019
• Breakdown of occupation transitions for sample occupations by 2030
• Displacement analysis by scenario and WDA to 2025-30
Migration • Historical domestic migration analysis by state
• Historical international migration analysis by country and sector
• Historical net change in MA population by domestic, international, and birth rates
• COVID-19 migration analysis for all US cities with 350k+ residents using USPS data
• COVID-19 migration analysis for Massachusetts cities and towns using USPS data
• COVID-19 migration state analysis inflows and outflows using ADP data
• COVID-19 migration intrastate analysis using ADP data, including by income bracket and age
• MA resident survey of 500+ respondents regarding working styles, migration, reskilling, childcare barriers
• Scenario modeling of migration by WDA for 2025 and 2030 based on University of Massachusetts
Donahue estimates
• Intra-state remote work potential based on sector employment analysis
• Analysis of commuter movement by WDA from American Community Survey data
10
Module Supplemental analyses
Equity • MA COVID-19 unemployment rate versus US national rate
• MA COVID-19 unemployment by types, reason
• MA COVID-19 unemployment analysis by ethnicity, education level and gender
• MA COVID-19 long-term MA employment trajectory by gender, education and wage level
• Job transition impact of COVID-19 by gender, age, educational attainment and race/ethnicity
Transportation • Historical recovery rate analysis by travel and logistics subsectors
• Historical analysis of vehicle miles traveled relative to U.S. average using Massachusetts Departmentof
Transportation data
• COVID-19 transportation analysis of rural/urban traffic recovery relative to U.S. average
• Comparative analysis of changing commuter patterns in urban areas (hours lost and cost to city)
• Freight logistics demand analysis by scenario to 2025-30
• Historical passenger travel to Logan airport and comparative analysis of business-heavy routes from
Logan Airport
• Comparative analysis of travel recovery across multiple US airports using publicly available data
• Analysis of Logan Airport revenue and other Massachusetts Port Authority airport conditions (closing
routes, revenue decline) throughout 2020 using Massport data
• Scenario modeling of future business air travel to 2025 and 2030
• COVID-19 transportation analysis of transit versus driving trips using MBTA, Mass Turnpike data
• Public transit ridership analysis by mode (e.g., commuter rail, subway, bus)
• Scenario modeling of public transit ridership to 2025 and 2030
• Analysis of shift to auto from public transit ridership changes to 2025 and 2030 (including parking
capacity, emissions, congestion, fatalities)
• Comparative analysis of work versus non-work trips
Commercial real • COVID-19 commercial real estate analysis of rents by property type (including retail, office, industrial)
estate using CoStar Group data
• COVID-19 commercial real estate analysis of delinquency rates by property type using CoStar Group data
• Analysis by granular geography and asset class (A,B,C-type office space) using CoStar Group data
• Scenario modeling of commercial real estate demand by property type (including retail, office, industrial)
to 2025 and 2030 using CoStar Group data
• Office year over year rent/occupancy rate growth by city using Yardi data
• Comparative analyses of various surveys (UpWork, EY, PwC) assessing office space trends after COVID-19
Housing • Housing pre-COVID-19 gap, benchmarked to national occupancy levels
• Historical analysis of regional home values from 2005-2021 using Zillow Home Value Index
• Historical analysis of regional housing occupancy rates using ACS data
• COVID-19 housing analysis of MA housing rents by municipality using Zillow Observed Rent Index
• COVID-19 housing analysis of home value prices by housing type using Zillow Home Value Index
• Scenario modeling of housing supply, demand, gap by WDA to 2025 and 2030
State revenue • Scenario modeling of withheld income, sales tax, motor fuel tax to 2025 and 2030 using DOR revenue
data and previous model results
• Scenario modeling of regional property tax (including commercial, residential, industrial) to 2025 and
2030 using DLS property tax data and previous model results
• Historical tax revenue growth by category, in constant USD using Department of Revenue data, deflated
using Bureau of Labor Statistics data
• Historical budgeted tax composition analysis, using DOR data
11
Many of the drivers impacting the future of surplus of commercial real estate in urban areas
work (such as rising income levels and an aging or how deeply the adoption of hybrid work from
population) are not new; however, COVID-19 home models will decrease public transportation
and the substantial shifts in how Massachusetts ridership. With these uncertainties in mind, three
residents work over the past year have potential scenarios were considered based on
accentuated and accelerated many of these trends how these drivers may impact the future for
(such as e-commerce and the pace of adoption of the Commonwealth (Exhibit 2). The scenarios
automation). Moreover, new drivers have emerged are built on a wide variety of inputs from a vast
(such as spread of remote and hybrid work at-scale array of sources and include surveys conducted
and reduction in business travel). The degree of with business leaders as well as citizens in the
these shifts varies across geographies, industries, Commonwealth to gauge likelihood of adoption
and occupations in the Commonwealth – as well of trends as well as validated in interviews with
as across gender and race. Also, the evolution of a cross-geography and cross-industry set of
many of these drivers is uncertain; it is difficult to business leaders through an Advisory Council
determine, for example, how structural the decline established for the purposes of this work.
in business travel is or whether there may be a
Exhibit 2: Scenarios studied with assumptions by scenario and sources of assumptions.
Assumptions by scenario
Scenario A: Return to
Trends pre-COVID-19 levels Sources informing our models and analyses
1. Adoption of Extent of Midpoint automation • McKinsey Global Institute Automation
automation adoption and adoption scenario (~20% adoption model leveraging US Labor
and AI displacement of workers displaced) Department O*NET database
(varies by • Survey of 800 executives on intention to
occupation)
accelerate automation adoption post-COVID
2. Shift to E-commerce Euromonitor projections, • Euromonitor retail value (Retail Selling Price)
ecommerce adoption pre-COVID-19 for the projections
same time periods (~30%)
3. Reduced Business Return to pre-COVID-19 • Oxford Economics-modeled recovery until
business travel growth travel growth rates 2022
travel recovery • Oxford Economics historical travel growth rates
4. Future Incremental 0% - return to pre- • Bureau of Labor Statistics data, Morgan Stanley
of office office space COVID-19 office space estimate
work (for reduction use
those who assumption
can work
remotely) Days eligible 1 day per week on • Multiple reports including MA Future of Work
workers spend average resident survey, PWC US Remote Work Survey,
working Real Estate Survey
remotely • Refined by MA Future of Work business
survey conducted with 223 businesses of
different sizes and industries throughout the
Commonwealth
12
Assumptions by scenario
Scenario B: Trends Scenario C:
continue at levels Remote work
seen during becomes more Sources informing our models
Trends COVID-19 permanent and analyses
1. Adoption of Extent of COVID-accelerated automation • MGI Automation adoption
automation adoption and adoption scenario, 139 occupations model leveraging US Dept
and AI displacement with increased automation due to O*NET database
(varies by COVID-19 (~25% of workers displaced) • Survey of 800 executives
occupation)
on intention to accelerate
automation adoption post-
COVID
2. Shift to E-commerce 25% e-commerce adoption by 2024, • Euromonitor retail value (Retail
ecommerce adoption and 38% e-commerce adoption by Selling Price) projections
2030
3. Reduced Business travel Business travel growth reaches 75% • Oxford Economics-modeled
business growth recovery of pre-COVID-19 travel by 2023, and recovery until 2022
travel resumes at pre-COVID-19 trends • Oxford Economics historical
afterwards travel growth rates
4. Future Incremental 15% incremental reduction in office • Bureau of Labor Statistics data,
of office office space space due to increase work from home Morgan Stanley estimate
work (for reduction
those who assumption
can work
remotely)
Days eligible 2 days per week 3 days per week • Multiple reports including MA
workers spend Future of Work resident survey,
working PWC US Remote Work Survey,
remotely Real Estate Survey
• Refined by MA Future of Work
business survey conducted with
223 businesses of different sizes
and industries throughout the
Commonwealth
13
The three scenarios considered include:
Scenario A, in which the trends return to their
original trajectory prior to the COVID-19 pandemic;
Scenario B, in which the trends continue to
accelerate as they did during the pandemic; and
Scenario C, in which hybrid and remote work
become more permanent, while the other trends
continue to accelerate as they did during the
pandemic. Our approach was not to look at every
possible scenario, but rather to focus on three
viable scenarios and their associated implications
for the Commonwealth of Massachusetts.
Informed by business surveys and discussions
with experts and business leaders, this analysis
also identifies eight insights that are most likely to
have a meaningful impact on the Commonwealth.
These include (1) reduced demand for office real
estate as workers spend more time in residential
areas due to hybrid work; (2) the need for
affordable, flexible, childcare options that cater
to the needs of the future; (3) ridership declines
in public transit (particularly commuter rail) (4)
reduced business travel; (5) a need for reskilling
at an unprecedented scale and pace; (6) slowing
population growth; (7) greater equity challenges;
and (8) capacity-constrained housing options
that cater to the needs of a diverse population..
In the following sections, this report explores
each of these insights in detail. Furthermore, the
Commonwealth is not homogeneous and the
challenges and opportunities from the future of
work will be experienced differently across the
state. The report explores how each implication
may differ regionally across the Commonwealth,
categorized across different regional archetypes.
14
03
TOP EIGHT
INSIGHTS FOR THE
COMMONWEALTH
Based on more than 60 analyses, multiple
surveys of business leaders and consumers
in the Commonwealth, and discussions with
Commonwealth leaders, eight insights stand
out as most likely and significant, regardless
of scenario. These eight insights can be
categorized into several themes.
15
Changing ways of working – such The pace, scale, and breadth of
as hybrid and remote work – may reskilling needed for job transitions
shift the center of gravity away from must be much greater than
the urban core, further reinforced if before the pandemic; creating the
business travel decreases. workforce of the future will require
extensive, thoughtful preparation.
1. More time will be spent in residential areas as
per our modeling up to 32% of workers in the 5. There is an urgent and unprecedented need
state could shift to remote work 1-3 days per for reskilling, as accelerated automation and
week, impacting the need for office space, digitization and demand for talent from
surrounding infrastructure, and creating growing sectors reshape workforce needs.
placemaking opportunities in residential
areas. This will also impact housing – where it 6. Similarly, there is a need to anticipate and
is needed, as well the type of housing options prepare for potential slowing of population
available to cater to a diverse population. growth, as international immigration is
reduced by the pandemic and domestic
2. Changing childcare needs (including location migration shifts to lower cost locales.
of childcare and type of childcare) will require
childcare programs to rethink their business The pandemic has already
models in order to adapt to the changing
exacerbated pre-existing inequities
needs of working parents from hybrid and
remote work. Available childcare that is for many – and as we look ahead
accessible, flexible, affordable and high quality the future of work will not be
will become even more acute – both for the
experienced equally across the
state’s attractiveness as a place to live and
for enabling parents, particularly mothers, to
Commonwealth.
rejoin or enter the workforce.
7. In particular, unemployment created by the
3. Transit usage is likely to decrease as pandemic could intensify existing inequities
commuters opt to increasingly work from for women, those at lower income levels,
home in a remote/hybrid world. Modes people of color and those with less education.
that rely heavily on work-trips (particularly These segments are expected to fully recover
commuter rail), will be most affected and see later than the rest of the population and will
their business models challenged. also likely be disproportionately affected by
future of work trends such as automation and
4. Reduced business travel is expected to impact digitization.
Massachusetts’ food, accommodation and
hospitality sectors, as well as other businesses The risk of future job growth moving
reliant on business travel. Boston Logan is outside Massachusetts is rising due
expected to be particularly hit, due to the
to the high costs of living and doing
higher proportion of business travelers
compared to the national average and business in the state
discretionary funding from airport parking
may be severely diminished. 8. A challenge even before the pandemic,
16
creating housing that is accessible and offers additional flexibilities to employers and
affordable becomes even more an imperative talent as a potential significant barrier that could
as hybrid and remote work expands and discourage future business growth in the state.
allows workers to move farther away from their
places of work. This will also lead to employers While these eight insights touch many different
competing in a wider geographic scale on aspects of work across the Commonwealth, they
expansion and new business building. may also be opportunities to invest in creating
a more vibrant, equitable, and competitive
While costs of doing business were not explored Commonwealth to sustain prosperity in the
in detail in this report, business leaders raised decade to come. Each of these eight insights, and
the high costs of doing business (through their differing impacts across regions, are explored
increased taxes, regulations, and operating in the next sections.
costs) especially when hybrid and remote work
Exhibit 3: Eight insights shaping progress toward an equitable, vibrant Commonwealth
Manage costs of
living and doing
business
Capacity Reduced
constrained demand for
housing office real
Build an options estate
equitable local
economy 8 1 Need for
Greater
equity affordable,
challenges Vibrant, flexible
7 Equitable, 2 childcare
options Adapt to
Competitive shifting center
Commonwealth of gravity
Slowing 6 3 Ridership
population decline in
growth public transit
5 4
Need for
reskilling at an Reduced
unprecedented business
scale and travel
Create the pace
workforce of
the future
17
03 – 01
DEMAND FOR OFFICE
REAL ESTATE MAY FALL AS
WORKERS SPEND MORE TIME
IN RESIDENTIAL AREAS DUE TO
HYBRID WORK
18
Nine out of ten organizations will be combining of workers, or 1.4 million, could effectively work
remote and on-site working, according to a remotely24 (Exhibit 4). If the trend toward remote
global McKinsey survey of 100 executives across and hybrid work continues, it will likely affect
industries and geographies as employers and the commercial real estate market, as well as
employees return from the pandemic.21 On similar geographic retail demand and employment. Small
lines, 52% of employees globally would prefer a businesses that rely on commuter foot traffic
more flexible working model after the pandemic could be particularly hard-hit.25
is over.22 Massachusetts has been one of the top
states for remote/hybrid work, as approximately Hybrid and remote work models may drive down
40 percent of adults live in households with at demand for office real estate. Office rent in Boston
least one adult who worked remotely due to declined by 2.5 percent during the pandemic,
COVID-19 as of April 2021.23 A task-time analysis and vacancy rates increased by 2.4 percent year
and examination of Massachusetts sectors on year in March 2021 , about a 30% increase.26
and occupations reveal that up to 32 percent
Exhibit 4: Up to 32% of Massachusetts’ workforce may be able to work remotely
Remote work in MA
Projected # workers
# of workers: 4.4M ~1.9M 1.4M
Theoretical Effective
maximum of potential for
MA workers remote workers remote work
Share of total: 100% 42% 32%
19
Remote work potential by sector in MA
Remote education services includes university
projected # workers, ‘000s
administrative staff occupations; analysis does
Theoretical maximum not assume that effectiveness and quality
will remain comparable with a greater shift to
Non-remote
remote
Assumed potential for remote work
Effective potential as % of sector
1. 23% of remote workers said they would relocate in next 12
Education services months
773 32% Source: McKinsey Global Institute analysis, “The Future of Work
Health Care and Social Assistance after COVID-19”, April 2021
674 22%
Government, Administrative, and Support
484 30% Additionally, about 36 percent of respondents to
Professional, Scientific, and Technical Services the Massachusetts Business Survey indicated that
383 55% they expect to reduce their owned or leased real-
Retail Trade estate footprint over the next two years. But how
361 30%
hybrid and remote work will play out in practice
Accommodation and Food Services
331 is still uncertain; there is expected to be a period
9%
Manufacturing of experimentation and learning before this trend
242 25% becomes clear. Our analysis shows that office real
Other Services estate demand could fall by 10 to 20 percent by
203 27%
2030 (Exhibit 5) if the trends toward hybrid and
Finance and Insurance
201 64% remote work as well as de-densification continue
Construction (Scenarios B and C), with Class B and Class C office
195 16% space likely experiencing the biggest impact.
Wholesale Trade This effect may be partially offset by changes in
127 38%
real estate use – for example, the expansion of lab
Information
98 56% conversions as companies concentrate on in-
Transportation and Warehousing person uses for existing commercial space.
96 23%
Management Reduced foot traffic from office commuters
81 62%
may negatively affect surrounding areas. Office-
Arts, Entertainment, and Recreation
65 24% adjacent sectors (such as food services, retail
Real Estate, Rental, and Leasing and entertainment services catering to office
53 36% workers) may see demand decline, impacting
Utilities their businesses. In a survey of Massachusetts
13 21%
businesses, 26 percent responded that they may
Agriculture, Forestry, and Fishing
10 8% need to move to a different area, and 13 percent
Mining said that they may need to close their business if
0 remote work continues.27 This pattern will most
likely affect smaller businesses; such businesses
in Boston Financial District, Seaport, Beacon
Job types most likely to work remote include:
Computer and Mathematical occupations, Hill, Back Bay, and Cambridge were facing
Business and Financial Operations, Management, revenue losses of about 40 percent in May 2021,
Office and Administrative support, and legal for example, when compared to their revenues
occupations in January 2020.28 Whether COVID-19 patterns
related to remote and hybrid work actually result
20
Exhibit 5: Net demand for office real estate could drop by as much as 20% in 2030 if remote/hybrid work
trends accelerate
Net Office CRE demand by Future of Work scenario,
2018-2030 net change in million sq. ft.
Total occupied B. Trends continue C. Remote work
Workforce office space A. Return to pre- at levels seen becomes more
development area1 2018 million sq ft. COVID-19 levels during COVID-19 permanent
Boston 104 2.7 -12.7 -20.6
Metro North 46 1.4 -5.4 -8.7
South shore 10 0.3 -1.3 -2.0
Central MA 28 0.7 -3.7 -5.7
Metro South/West 65 1.8 -7.8 -12.4
Lower Merrimack Valley 15 0.5 -1.7 -2.8
Brockton 4 0.1 -0.5 -0.7
North Shore 54 1.8 -6.6 -10.5
North Central 6 0.1 -0.8 -1.2
Hampden County 17 0.4 -2.2 -3.4
Franklin/Hampshire 4 0 -0.6 -0.8
Greater Lowell 17 0.6 -1.9 -3.1
Massachusetts 370 10.4 -45.0 -71.8
1. Berkshire, Bristol, Cape & Islands, and Greater New Bedford WDAs not covered in CoStar data
Source: CoStar Data, ADP data Jan 2021 to Jan 2020, UMASS-Donahue Population projections, McKinsey Global Institute analysis,
“The Future of Work after COVID-19”, April 2021
in reduced foot traffic and increased office-space residential areas.29 This change could potentially
vacancy is still unclear, so this trend should be push about 5,000 retail jobs out of the Boston area
monitored further to understand its longer-term while increasing vitality and business activity in
implications on the Commonwealth. residential areas and local downtowns.
Conversely, with more people spending time Additionally, the rising popularity and feasibility of
in residential areas, some spending and retail remote work may allow employers and employees
activity may move to residential areas. Before to have more flexibility in where they choose to
the pandemic, about 250,000 commuters flowed locate. A Massachusetts Business Roundtable
into Boston from surrounding metro areas daily survey found that after COVID-19, members
(Exhibit 6). If 32 percent of these commuters expected that almost three times the previous
curtail their commuting habits, then some 80,000 proportion of their employees affiliated with
workers may spend more time in their local Massachusetts-based operations or locations
21
would work out of state (an increase from 5 barriers to moving or expanding operations and
percent to 15 percent).30 Moreover, members employment into other states. This potential
of the Advisory Council noted that increased shift away from Massachusetts could disrupt
opportunities to work remotely have lowered employment growth and business vibrancy.
Exhibit 6: Boston receives ~250,000 net commuter inflows from surrounding metro areas, particularly
Metro South
Net receivers vs senders of commuter
flows
2018 inflows – outflows, thousand
worker
-48K 245K
0
Total in-commuters1 Total out-commuters
% of MA total, 2018 % of MA total, 2018
14.1% Metro South/West 16.5%
13.5% Boston 4.5%
11.6% Metro North 12.0%
9.3% South shore 10.1%
9.1% North Shore 10.2%
6.8% Bristol County 7.6%
6.2% Lower Merrimack Valley 6.5%
5.7% Brockton 6.3%
4.1% Greater Lowell 4.5%
3.9% North Central 4.7%
3.8% Greater New Bedford 4.2%
3.7% Central MA 3.9%
3.5% Franklin/Hampshire 3.9%
3.2% Hampden County 3.5%
1.3% Cape & Islands 1.5%
0.3% Berkshire County 0.2%
1. Includes in-commuters from other states. Bases between in and out-commuters are different
Source: American Community Survey 5-year estimates for 2018
22
03 – 02
HYBRID WORK
WILL LIKELY DRIVE
DEMAND FOR
FLEXIBLE CHILDCARE
OPTIONS, REQUIRING
CHILDCARE
BUSINESS MODEL
TO EVOLVE
23
The type of childcare needed may change costs, yet also ranks as having the highest
after the pandemic. Early surveys done by the quality childcare programs.33 In an independent
Massachusetts Department of Early Education assessment of state childcare, Massachusetts
and Care (EEC) show that parents in hybrid work was ranked amongst the top states on quality
models may need more sporadic, part-time day based on percentages of National Association for
care for the one to two days per week when the Education of Young Children (NAEYC) and
they go into the office and that not as many National Association of Family Child Care (NFCC)
families will seek five days of full-time care as accredited facilities.34 As of 2020, the average cost
they had before the pandemic. Per our surveys of childcare for a Massachusetts family with two
with Commonwealth business leaders, most children ages four or below was about 39 percent
employers (in occupations capable of supporting of the average household income.35 In 2019, the
remote work) are planning to adopt a hybrid state faced a severe shortage of childcare supply,
model and employee preferences have shifted with an estimated workforce gap of 25,000 to
since before the pandemic, with 63% of employees 30,000 workers to care for children ages zero to
now preferring hybrid or remote work models five.36 To compound matters, childcare center
compared to just 38% pre-COVID-19 and greater capacity was reduced by 13 percent in 2020 due
than 10 percentage more than what is observed to COVID-19. EEC estimates that in 2021, childcare
in global surveys. The location of childcare needs capacity will return to ~90 percent of pre-COVID-19
may shift; employees may seek childcare close to capacity levels. Our modeling shows that in order
home rather than close to the workplace as they to eliminate the childcare availability challenges
spend more days working from home. Increased facing working parents in Massachusetts through
demand for part-time childcare and changes in 2030, a large influx of childcare workers will be
location preferences may further challenge the necessary.
sustainability and viability of existing childcare
models. Addressing this challenge will be critical Employers are beginning to recognize the need
as the lack of available, adequate childcare is one to support workers in finding flexible, affordable
of the top barriers to getting workers back to childcare options. In the Massachusetts Future of
work (Exhibit 7). Childcare is also more relevant to Work business survey, the number of respondents
getting more women back to work. Decades of considering offering childcare support in the
research show that women do significantly more future increased by 72 percent from pre-COVID-19
housework and childcare than men—so much so numbers (from 22 percent to 39 percent of
that women who are employed full-time are often respondents).37 While helpful, such benefits
said to be working a “double shift.”31 Increased and programs alone will not solve today’s gap
childcare burdens from the pandemic have in childcare capacity or shortage of childcare
impacted women disproportionately.32 Innovation workers. There is a unique opportunity for a) EEC
will be critical to meeting the evolving needs of to help childcare programs rethink their business
families and ongoing workforce challenges in models to adapt to the changing needs of working
delivering affordable childcare. EEC is planning to parents (given hybrid work and a move from
use part of the federal stimulus funds for grants spending time in urban cores to more residential
to childcare providers to foster innovation to areas) and b) employers to also innovate and
meet the evolving needs of working families in redesign the workday in ways that provide parents
Massachusetts. more flexibility, such as shifting away from the
standard 9-5 workday and enabling working
In addition, in 2019, Massachusetts ranked parents to plan around school drop off and pick up
amongst the most expensive states in childcare times. Doing so could create a more inclusive work
24
Exhibit 7: Childcare needs are a top barrier to getting workers back into the office, according to
survey respondents
Top perceived barriers to get employees back in Employers offering or considering to offer
the office1 childcare (N=223)2
Most cited responses by % in each category
Pre-COVID-19 Post-COVID-19
Ranked 1-4 Ranked 5-9 N/A
N=223 Yes
Health concerns 22% Yes
73% 9% 18% 39% No
No 61%
Employees prefer working at home 78%
61% 19% 19%
Childcare needs
60% 20% 20%
Elder care needs 1. If you have employees working remotely and would want
some or all to return to working on location/in an office for
40% 35% 25% at least some of the time vs. remotely, what do you believe
to be the biggest barriers that your employees would face
in returning to work in person?
Employees have moved/relocated further away
2. Childcare support - Check yes if you have any of the
36% 37% 27% following benefits pre-COVID or if you are anticipating
offering them to some or all employees post-COVID
Inadequate transportation options Source: MA Business Survey, April 2021
21% 49% 30%
environment that encourages greater workforce affordable childcare for ages 0-5 and before/after-
participation, especially amongst women who school care for school-aged children is likely to still
historically have disproportionately left the remain a barrier to workforce participation. In the
workforce due to childcare concerns. Massachusetts Future of Work Survey, 13 percent
of respondents with children said they might
As of April 2021, in Massachusetts, the labor force resume working or enter the workforce if they
of female workers dropped by 5.1 percent relative had access to additional childcare.39 Conversations
to pre-pandemic levels, compared to 1.7 percent with business leaders revealed that the combined
for male workers. Female employment recovery challenges of childcare and housing affordability
to pre-COVID-19 levels is expected to lag behind make it more difficult for employers to attract
males’ recovery rates by 18 months.38 This could talent to Massachusetts.
potentially contribute to workforce shortages in
high-growth jobs that tend to be staffed more
by women (such as nurses, home health aides
and teaching assistants) and may exacerbate
existing inequities. Female employment recovery
is expected to accelerate once K-12 schools go
back to being full time in-person, yet access to
25
03 – 03
PUBLIC-TRANSIT
RIDERSHIP IS
EXPECTED TO FALL,
WITH THE STEEPEST
DECLINE LIKELY IN
COMMUTER RAIL
26
Across US transit systems, ridership declines have in work from home) and non-work trips (for
been steepest in systems that have a higher share example, e-commerce replacing a shopping trip),
of work trips, and whose ridership base has a as well as 2) mode shift to either automobiles
higher share of riders who are able to work from or non-automobiles (for example bicycle trips
home. As a result of these two factors, commuter and walking) from lapsed transit riders using
rail ridership has fallen more and has been slower alternatives they have grown accustomed to using
to return than subway ridership, which in turn during the pandemic. This modeling shows that
has been slower to return than bus ridership. This commuter rail will be most strongly affected by
pattern is seen in the Boston metropolitan area as such changes; some 15 to 50 percent of its pre-
well: in January 2021 ridership was down to about pandemic ridership base could be lost over the
15 percent of pre-pandemic levels (versus around long-term, depending on the scenario and the
45 percent for bus ridership and about 20 to 30 percentage of commuters who continue to work
percent for subway ridership).40 Public transit from home (Exhibit 8). Less impacted will be bus
ridership recovery by 2025 has been modeled ridership, with a potential loss of 5 to 20 percent;
based on two core changes, 1) the amount of followed by subway ridership, which could sustain
lost trips (for example, trips that are no longer a loss of 5 to 25 percent.
happening) for both work trips (due to increase
Exhibit 8: Up to 50% of commuter rail ridership may be lost by 2025 if remote/hybrid work becomes
more permanent and commuters sustain shift to transportation by auto
Aggressive shift to auto Low shift to auto 2019 average daily trip volume, ‘000s
Modeled 2025 Massachusetts public transit ridership as a share of 2019 ridership1
%
Overall Bus Subway Commuter Rail
A. Return to pre-
COVID-19 levels
87 94 89 96 88 95 78 86
B. Trends
continue at
levels seen 80 88 85 93 81 88 64 73
during COVID-19
C. Remote work
becomes more 74 83 81 89 74 81 51 60
permanent
~1,000 ~300 ~600 ~100
1. Methodology and definitions detailed in appendix
Source: American Community Survey, National Transit Database
27
Commuter rail represents 31 percent of for the 2-3 days a week when they go into the
Massachusetts Bay Transportation Authority’s office instead of using public transit, there may
(MBTA’s) operating revenues ($239 million in be a shift from ridership across all modes to
2019). A 15 to 50 percent fall in ridership, therefore, transportation by automobile representing 12-
could mean a 5 to 17 percent decline in overall 14 million additional annual auto trips. This may
MBTA operating revenue, and an overall decrease drive up congestion, pollution (including NOx, CO2
in farebox recovery ratio, from 44 percent to 36 and PM2) and fatalities, while also intensifying
percent.41 Services and contracts for commuter pressure on downtown parking. These effects not
rail were already challenged prior to COVID-19 only have safety and non-mobility implications
due to operating losses and slow growth in but also could threaten the state’s ability to reduce
ridership. Future-of-work challenges could further greenhouse gases and emissions.
compound these issues and pose additional
challenges to the commuter rail business. The Additionally, road traffic has proven more resilient
sustainability of the current business model for than transit ridership throughout the pandemic.
commuter rail may then come into question, as Road trips, according to the Massachusetts
it relies on selling monthly passes to a narrow Department of Transportation, have recovered to
market of riders who are headed to either North or 85 percent of pre-pandemic levels, while public
South Station, during peak hours. transit (subway, commuter rail and bus) remained
at about 30 percent of pre-pandemic levels in
According to our modeling, remote/hybrid work February of 2021.43 This may be because work trips
could decrease peak-hour automobile vehicle represent a smaller share of road trips than transit
miles traveled by around 2 to 9 percent (Exhibit 9). trips (about 17 percent44 of road trips versus an
However, these effects may be counterbalanced by estimated 50 percent of transit trips). Further, the
less efficient “trip-chaining” (i.e. making multiple pandemic engendered negative views of transit
single-purpose trips, versus linking work and non- among consumers,45 and e-commerce and the
work trips) and an increase in home deliveries (as associated freight traffic increased.46
e-commerce is expected to make up 38 percent
of total retail spend by 2030).42 Additionally, A final finding has been that the number of
the Massachusetts Port Authority (“Massport”) vehicle miles traveled (VMT), a measurement
observed a return of regional traffic in the Sumner of traffic volume, has recovered more strongly
Tunnel and Ted Williams Tunnel, with traffic at in suburban areas; for example, traffic recovery
or exceeding pre-pandemic 2019 levels for non- on the western section of the Massachusetts
airport traffic. Massport is also seeing an increase Turnpike has been more robust than on the
in vehicle trips per passenger post-pandemic, due Boston extension. This may increase over time
to reduced transit and shared-ride use. The peak as arterial commutes are replaced by more
time of day and concentration of travel may also localized, residential traffic as remote and hybrid
change, with hybrid work leading to reductions workers stay closer to home for shopping and
in peak-hour congestion on the arterials leading entertainment.
to Boston Central Business District. Specifically,
congestion may move from being concentrated The shift of traffic to local surface roads has
in the peak, headed into and out of Boston, additional implications. The “15-minute city”
to remaining steady all day, and increasing in concept (defined as an ideal geography in which
suburban areas. most human needs and desires are located within
15 minutes of travel) may become increasingly
As more commuters choose to use automobile attractive as communities seek to mitigate surface
28
Exhibit 9: A 2-9% reduction in vehicle miles traveled is possible due to remote and hybrid work trends,
but other factors could counterbalance this shift
Non work-related VMT
Work-trips as a percentage of Work commute trips that could
Work-related VMT
vehicle miles traveled, 2017 be lost due to remote work1
Larger post-COVID-19 ~2-9% potential
30% shifts (3 days of remote reduction in total
30-35% work for those eligible) vehicle miles
traveled from
remote work
Modest post-COVID-19 impact (all else
10% shifts (2 days of remote equal)2
work for those eligible)
1. Based on commuter industries
2. Decrease in auto usage for commuting likely to be be larger than any mode shift from transit to auto, however does not
include other behavioral change impacts like increased travel from road trips or visiting family
Source: ACS, National Report on Commuting Pattern and Trends in America, MA Resident Survey April 2021
road congestion. Similarly, placemaking (defined An increase in suburban congestion and VMT
as planning, design and management of public could likewise lead to an increase in CO2 emissions
spaces such as creation of community parks and and accidents on surface roads, thus eroding
art installations), suburban retrofitting (such as residents’ quality of life and safety. Finally, the
redevelopment/urbanization to increase density demand for electric vehicles (EV) and charging
and walkability), and downtown densification stations may rise as EV costs decrease, and
will likely take on new importance, making land residents shift to short-range trips (since EVs often
use and transportation design increasingly have only short ranges of travel) and charge their
interdependent. Demand for bike/pedestrian/ vehicles closer to home.
anywhere-to-anywhere infrastructure will rise.
29
03 – 04
BUSINESS TRAVEL MAY BE
STRUCTURALLY REDUCED FROM
PRE-PANDEMIC LEVELS, WHICH
COULD IMPACT THE HOSPITALITY
AND AIRLINE INDUSTRIES AND
HAMPER MASSACHUSETTS’
COMPETITIVENESS
30
A structural disruption in the way companies many business hubs will be affected. Boston is
approach business travel could cause the particularly dependent on business travelers,
number of business passengers to Boston Logan which made up about 40 percent of Logan
International Airport to decline by up to 30 percent International Airport’s passenger flows in 201948
(Exhibit 10). For example, behavior changes (compared to the US average of 20 percent49 ).
sparked by the pandemic – particularly the This change could result in a net decline of 7 to
reduction of intra-company meetings/trainings 15 percent of total airport travelers by 2030 – or
– may reduce airport traffic in the long term, as as much as 5 million fewer business travelers
would an ongoing drop in professional services per year into the state. Business travel tends
travel. During the pandemic, many companies to be disproportionately profitable for airlines,
realized that they could remain productive without with 18 percent of the travelers accounting for
the level of travel they had pre-pandemic and may 60 to 70 percent of revenues.50 It is likewise
continue to curtail travel to meet 2030 carbon disproportionately significant for airport
emissions commitments.47 According to the economics, as 60 percent of parking customers at
Massachusetts business survey, about 50 percent Logan Airport are business travelers.51
of respondents observed a reduction in business
travel for a wide variety of purposes. That said A long-term decline in business travelers will likely
whether the decline in business travel is long-term have the greatest economic impact on long-haul
and/or a structural trend remains to be seen. The international flights or on domestic, business-
shift should be monitored further over the next heavy routes like BOS-LAX, BOS-SFO, BOS-IAH.52
couple of years to fully understand its long-term These routes may become less frequent or require
implications for the Commonwealth. changes in aircraft; some may even become
unprofitable.53 If connectivity declines, Boston’s
If a substantial (up to 30 percent) reduction in attractiveness to businesses and residents may
business travel holds true for the Commonwealth, suffer over the long term.54
Exhibit 10: Potential for reduction in business travel of up to 28% by 2030
Logan business A. Return to pre-COVID-19 levels
passenger travel by year, B. Trends continue at levels seen during COVID-19
2019 = 100
C. Remote work becomes more permanent
In 2023, when leisure
travel is forecasted to fully
recover, total air travel
could remain 7-15% below
pre-pandemic levels if
-28% business travel remains
low
Source: Massport, Globaldata, Oxford Economics
31
In addition to the effects of connectivity changes,
Exhibit 11: Reduced business travel may cause
the surrounding business-travel ecosystem could
businesses to lose some of their high-value
customers be significantly impacted. Convention centers,
hotels and the hospitality sector in general, as well
Intention to increase/decrease business travel as adjacent food and retail centers, may see profits
by business trip purpose post-COVID-191
drop as travelers dwindle. The pandemic had a
Reduce (partially or completely) from pre-COVID-19
sizable impact on the hospitality and food-services
No change from pre-COVID-19
sector, which had lost about 100,000 jobs in
Increase it from pre-COVID-19
Massachusetts as of March 2021. While this sector
N=142 is showing a recovery of about 50 percent, it is still
lagging behind other sectors’ job recovery rates
Meetings with clients
(total Massachusetts employment recovery already
65% 18% 17% reached 78 percent in April).55 Up to 21 percent
of businesses surveyed in the Massachusetts
Training and development
Business Survey lost as much as 50 percent of
49% 27% 24% their profits due to reduced business travel56
(Exhibit 11). This may also mean that discretionary
Conferences
funding from airport parking will be negatively
55% 25% 20%
impacted due to reduced business travelers (who
Meetings with colleagues in different offices
comprised 60% of Logan Airport parkers57).
56% 18% 26%
Exhibitions or trade shows
58% 22% 20%
Perceived % of pre-COVID profits at risk due to
reduced business travel2
N=223
33% 24% 21% 23%
Perceived 1-25% 0% 50%+ 25-50%
Employers suggesting their business is at risk are
primarily urban (Boston and Metro areas or outside
of MA3 ), small-mid size (<100 employees) businesses,
with disproportionate impact on sectors like Finance
and Construction
1. How are you planning to change business travel habits 12
months from now? (N = 142 respondents who stated that
their employees travel for business)
2. What percent of your pre-COVID profit may be at risk due
reduced business travel?
3. Or didn’t report main primary location
Source: MA Business Survey, April 2021
32
03 – 05
RESKILLING MAY BE
REQUIRED AT AN
UNPRECEDENTED
SCALE AND PACE
33
Employment demand in 2025 and 2030 is physical proximity, frequency of interactions, and
expected to be marginally higher than in 2018 exposure to strangers, thereby boosting the safety
(absent other macro-economic shocks); however, of workers and customers during the pandemic.
sectoral and occupational shifts are likely to
occur in the composition of jobs, requiring job The effects of this change on the Commonwealth
transitions and reskilling. Per our modeling, will not be even across industry, occupation, or
across all scenarios, approximately 300,000 to region. Per this analysis, healthcare, professional,
400,000 individuals in the Commonwealth will scientific and technical services are expected
need to transition to different occupations or to see the greatest gains, while retail, finance,
occupational categories over the next decade. In insurance, hospitality, and food services are likely
Scenario B, about 75,000 individuals will have to to experience the greatest job losses. Across
jump multiple wage levels over the next decade all sectors modeled in Scenario B, occupations
to become employable, primarily due to faster such as office support (approximately 145,000),
adoption of automation. COVID-19 propelled customer service (about 52,000) and food-service
a more rapid adoption of automation and of workers (approximately 51,000) will likely see the
artificial intelligence (AI)58, as the deployment of most significant gross displacement (at about 17
new technologies helped to accommodate surges percent, 6 percent, and 5 percent in net reductions
in demand and reduce workplace density. Many of respectively) and require the most reskilling
these technologies also allowed for reductions in (Exhibit 12).
Exhibit 12: A majority of people who need to transition to new jobs/sectors may also need to reskill to
new occupation categories across scenarios; illustrated for scenario B
Breakdown of occupational changes estimated in Massachusetts by 2030
B Trends continue at levels seen during COVID-19
Number of workers who could need to find new work Number of occupation transitions estimated by 2030,
within a different occupational category, ‘000 ‘000
Customer Others
service and Community
Builders sales services Business/legal
Production
work professionals
Educator 2
10 STEM
45 and professionals
52 workforce 13
Office
support training 25
339K 21 3 68K
Transitions
Transitions
needed
needed Food 8
51 Managers
145 services
4 3
15 10
Mechanical Health aides, Transportation
installation technicians, services
and repair and wellness
Property
maintenance
34
Example occupations
nd a oo F
au cco kk w ood
or
S di un ee
tin ti pi ke pr
or toc g ng ng
cl , a , rs ep ar
cl Ja at
de k
er R er n
ks d ni io
r fi cle
ks et is to rs n
ails hw a
lle rks
ales as In
an su nd
Offi B pe he pr d a r clea
ce rs a Cas rson s Te rs oc po nc
es lic e c ne rs
hier lle si y la
ng im
s D rs cl er s
ks
27 26 24 23 15 9 8 8 8 7
Number of occupation transitions estimated by 2030, thousand
Source: McKinsey Global Institute analysis, “The Future of Work after COVID-19”, April 2021
While gross job losses could reach around 0.9-1.2 occupational categories or occupations. In
million jobs (depending on the scenario), about Scenario B, not only will the transitions outnumber
two thirds of affected individuals will change those in Scenario A by about 100,000, but also a
jobs without requiring any significant re-skilling. greater proportion of those transitions – 75,000
However, approximately 300,000 to 400,000 versus 3,500 – will likely need to jump multiple
individuals over the next ten years will likely be wage levels to be employable over the next decade
displaced and will need to transition to different (Exhibit 13). It is likely that these jumps
Exhibit 13: Workers in the lowest wage levels will likely need to transition to new occupations at much
higher rates than before COVID-19
Estimated number of occupation transitions between wage levels, 2018–30
Jobs, Massachusetts1
Stay in the same wage Occupation transition up Occupation transition up
quintile or move down one one wage quintile two wage quintiles
In Scenario A, ~3,400
Scenario A: Trends return to pre- Scenario B: Trends continue at
employees needing two
pandemic levels2 levels seen during COVID-192
wage level jumps as
compared to ~76,000 in
Highest wage
1st Senario B.
quintile
2nd
3rd
Lowest wage 4th
quintile 5th
1. A transition is defined as a displaced job that does not come back due to lack of growth in labor demand in the same or similar
occupation.
2. Additional jobs prioritized for lower income quintile workers.
Source: McKinsey Global Institute analysis, “The Future of Work after COVID-19”, April 2021
35
may need to happen in multiple moves, with of the expected targeted roles that are expected to
interim moves serving as springboards to target provide opportunities for growth are expected to
occupations and occupational categories59. Some be Human Resource (HR) specialists (such as
Exhibit 14: Women, young, less-educated workers, and minority workers are likely most at risk and may
need to make more occupation transitions
Estimated percentage increase in number of occupational transitions between two scenarios; Scenario A: Return
to pre-COVID-19 levels and Scenario B: Trends continue at levels seen during COVID-19
Indexed to overall percentage increase=100, weighted average of MA
Worse off in hybrid remote work scenario Better off in hybrid remote work scenario
Lower than average Higher than average
40 45 50 55 60 65 70 75 80 85 90 95 100 105 110 115 120 125 130 135 140 145 150 155 160
Gender Male Female
Age 35-50 51-65 65+ 18-34
Associate degree Some college
Educational Master’s, PhD Bachelor’s Less than
High school
attainment1 or similar degree high school
Black/African American
Race/
Asian Other Hispanic/Latino
ethnicity2
White
1. Denotes max educational attainment achieved
2. Hispanic/Latino group broken out independently, all other groups are exclusively non-Hispanic
Source: MA LMI, McKinsey Global Institute analysis, “The Future of Work after COVID-19”, April 2021
Corporate recruiter, HR analyst, HR coordinator, The need for reskilling will vary by location in
HR generalist), computer user support specialists, the Commonwealth. Approximately 50 percent
business operations specialists and general of reskilling needs (9,000 and 11,000 per year
and operations managers (such as Business respectively) will be concentrated in Suffolk and
Manager, Finance Manager, Operations Director, Middlesex counties due to their size. Areas with
Store Manager) and sales representatives (such larger proportions of vulnerable jobs (such as
as account representative, customer account retail and hospitality and food services) – including
technician, sales consultant) amongst others. the Cape and Islands, Bristol County and the
North Shore – will likely be most affected, per our
Women, Black, Latino/Hispanic workers who have analysis, as these sectors account for a sizable
been disproportionately impacted by COVID-19- percentage of their employed population.
related job displacement will likely continue to
experience the highest rates of displacement No matter the scenario, reskilling will ultimately
(Exhibit 14). be necessary to support industry growth and to
maintain Massachusetts’ competitiveness. The
36
Massachusetts Business Roundtable released an skilled and hard-to-fill, mid-skilled roles can help
editorial urging the prioritization of development, the Commonwealth to support that growth.60
recruitment, inclusion and retention of talent, or Such support may be particularly needed in two
“business will go…where talent is.” Maintaining areas poised for continued growth post-pandemic:
Massachusetts’ competitive edge for both highly healthcare and “new economy” sectors.
Healthcare is likely to be the largest source
of employment growth in Massachusetts across
all scenarios. The sector is expected to add
an estimated 210,000-230,000 jobs by 2030.
Economists at the US Department of Labor from lower pay levels through apprenticeship and
project that employment in healthcare will grow certificate programs. For example, orderlies could
at a rate 15 percent faster than the average for be transitioned to licensed practical vocational
all occupations, adding about 2.4 million new nurses, radiologic technologists, licensed
jobs nationwide by 2030.61 Per our analysis, we practical/vocational nurses, or medical coders.
expect continued growth in jobs over the next
decade across all sub-sectors in healthcare According to our analysis, healthcare employment
(including ambulatory care services, hospitals, in the Commonwealth is expected to see similar
nursing and residential care facilities and social growth, with demand in 2030 leading to 210,000-
assistance) driven by high demand for healthcare 230,000 in additional healthcare jobs (Exhibit 15).
occupations (including healthcare diagnosing In Scenario B, the demand for personal care aides
and practitioners, health technologists and in the Commonwealth is expected to increase
technicians, other healthcare practitioners by 35,000 by 2030 – an approximately 50 percent
and technical occupations, home health and increase from 2018. Similarly, demand for home
personal care aides, nursing assistants, orderlies, health aides is likely to increase by 22,000 (an
psychiatric aides, occupational therapy, physical increase of about 85 percent), for registered nurses
therapist assistants and other healthcare support by 25,000 (approximately 30 percent), and for
occupations). The five job categories expected to health professionals (including nursing assistants
grow most are nurse practitioners, home health and licensed practical/vocational nurses) by about
and personal care aides, mental health specialists, 20,000 (an increase of ~40%).
massage therapists and respiratory therapists.62 If Based on expected demographic shifts and
managed well, some of these growing healthcare other factors, our modeling shows that by 2030,
jobs may be supplied through reskilling workers about 25 percent of the likely growth in demand
37
Exhibit 15: Health care could become the largest employment sector and generate the most new
jobs by 2030.
B Trends continue at levels seen during COVID-19
Labor demand
Employment 2018 Net labor demand 2025 Net labor demand 2030 change 2018-30
‘000 ‘000 ‘000 %
Education2 773 767 776 0
Health Care and Social
674 804 884 31
Assistance2
Government, Administrative,
484 469 469 -3
and Support
Professional, Scientific,
383 426 471 23
and Technical Services
Retail Trade 361 365 328 -9
Accommodation and
331 320 321 -3
Food Services
Manufacturing 242 242 252 4
Other Services3 203 203 207 2
Finance and Insurance 201 190 188 -6
Construction 195 197 205 5
Wholesale Trade 127 126 129 2
Information 98 94 94 -4
Transportation and
96 98 101 4
Warehousing
Management 81 77 77 -6
Arts, Entertainment,
65 70 72 11
and Recreation
Real Estate, Rental,
53 51 50 -5
and Leasing
Utilities 13 14 16 20
Agriculture, Forestry,
10 10 9 -8
and Fishing
Mining 0 0 0 -3
1. Based on specific assumptions assumed in this scenario, as documented the appendix
2. Including private, state, and local public institutions
3. Excluding public administration
Source: MA LMI, LaborCUBE, BEA, BLS OES, QCEW, Moody’s analytics
38
(about 50,000 jobs) is expected to occur within lack of available workers to fill new positions, but
the Boston Workforce Development Area (WDA). also from current healthcare workers leaving the
Another 23 percent will take place in Metro industry for other, better-paying jobs. Recruiting
North (about 21,000 jobs) and Metro South/West and retaining workers for these healthcare jobs will
(approximately 27,000 jobs). About 10 percent be important to ensuring the delivery of critical
will occur in the Hampden WDA (around 21,000 services. The sector could also see continued, high
jobs). The need for a trained workforce to sustain levels of medical innovation and entrepreneurism
this expected growth in healthcare – and the driven by investments in the sector and
associated demand on educational institutions demographic necessity, as an aging population is
for trained professionals – will likely be felt over likely to strain both public and private healthcare
both the short and long terms. A talent shortage networks, thereby driving growth in other sectors
could slow healthcare’s anticipated growth like healthtech.63
(thereby negatively impacting GDP projections)
and impact the availability of needed healthcare
services. This talent shortage could be driven by a
“New economy” sectors could be another source
of growth, if Massachusetts can capture it.
Accelerating sectors and new technologies are The sectors poised for accelerated growth
expected to spur innovation and job growth at (including technology, healthcare and biology)
a faster pace than before the pandemic. This are already strongly anchored in Massachusetts,
new economy will require people who can and new economy sectors (such as artificial
create, deploy and maintain new technologies. intelligence, electric vehicles/clean energy and
Massachusetts was first in the nation in patent biotechnology) play well to the Commonwealth’s
creation and venture capital per GDP in 2019 existing strengths. Already, Massachusetts seems
and has served as a center of innovation in the to be benefiting from these opportunities; the life-
Northeast.64 Additional funding for investment science industry, for example, is driving vacancies
opportunities could significantly expand research in lab space to all-time lows, even as office space is
and development in healthcare and life sciences. being rapidly converted into lab space.65 However,
Members of the Advisory Council have shared that to help ensure that this growth happens in
there is already opportunity for scientific research Massachusetts rather than in lower-cost locales,
in the state. With additional federal funding ongoing access to increasingly mobile talent will
coming out of the pandemic there will likely be be critical.
opportunities to build a foundation of knowledge
and skill, ahead of our competitors. Reskilling at the necessary pace and scale
will likely require newer interventions and a
more purposeful approach – such as working
39
To support and retain talent in the state, providing
job retraining and enabling individuals to learn
marketable new skills throughout their lifetimes
will be essential.
with employers, community-based partners, year degrees, training hiring managers to recruit
technical institutes and training providers to based on skills versus degrees, and ensuring the
bring lifetime training and education to workers. company culture has support networks for non-
Businesses will need to take the lead in some traditional pathways) to build strong pipeline and
areas, including on-the-job training and providing retention strategies for those in apprenticeship
opportunities for workers to upgrade their skills. or certificate programs. By 2025-2030, the ability
Many companies are finding that training and to successfully reskill approximately 30,000 to
preparing workers for the future workplace not 40,000 people per year could lead to a vibrant
only serves their best interests but also is part Commonwealth economy in which new job
of their societal responsibility.66 Successful new opportunities outpace workforce growth. By
hiring and upskilling practices rely on a business contrast, the failure to reskill will likely cause
culture that is designed at all levels to bring on rising unemployment, unmet labor demand and
alternative hiring candidates or talent in new ways. a scarcity of qualified talent (especially in high-
Businesses may need to re-imagine their culture growth sectors like healthcare) and ultimately
around hiring and on-boarding (for example, impede economic growth in the Commonwealth.
changing job descriptions to not require four-
40
03 – 06
THE
COMMONWEALTH
POPULATION IS
LIKELY TO GROW,
ALBEIT MORE SLOWLY
THAN PRE-PANDEMIC
41
The Commonwealth’s population is likely to outflow (an estimated 5,000- to 10,000-person
grow, but more slowly than it did before the increase in emigration compared to the previous
pandemic – by about 4.5 percent from 2018-2030, year)68 and a potential decrease in international
as compared to 6.4 percent in 2006-2018. The inflows, which may have dropped by as much as
slowing rate can be attributed to declines in birth 30,000.69
rates and international immigration, as well as a
rise in domestic emigration. Consistently across all Within Massachusetts, the populace has been
modeled scenarios, the total impact is estimated moving away from Boston and other urban areas
at approximately 50,000 fewer residents than into suburban or even rural areas, with vacation
previous estimates for 2030.67 hubs such as Cape Cod and the Berkshires seeing
net inflows at times when they previously had
Before COVID-19, Massachusetts had a steady experienced population declines (Exhibit 16).
but declining growth in immigration driven Higher-income (greater than $100,000) and older
by international inflows that offset consistent individuals have driven movement to the Cape
domestic emigration. During COVID-19, and the Berkshires, while those below age 24 are
Massachusetts saw both a higher domestic still net-migrating into Boston.70
Exhibit 16: In 2020, Massachusetts residents moved from urban parts of Boston to other areas
throughout Massachusetts, notably the Berkshires and Cape Cod
Shift in net migration 2020
versus 2019
-10.0% 40.0%
Source: NYT Analysis from USPS data adjusted for MA, denominator uses 2019 US Census population data by zip code
Massachusetts saw an increase in domestic pandemic-related movement both into and out of
emigration – particularly to New Hampshire, Massachusetts.73
Rhode Island, Connecticut and Florida – while
net inflows from New York almost doubled.71 Whether patterns begun in COVID-19 will continue
This trend likely involved both temporary and is still uncertain. Some evidence suggests that
permanent moves; some people moved due to remote/hybrid workers may behave similarly to
college closures or to be near family, while others those who do not work remotely. For example,
moved due to financial reasons.72 High-income compared to respondents who did not expect to
individuals accounted for a large portion of do more work remotely in the future, respondents
42
to the Massachusetts Future of Work survey who
Exhibit 17: Massachusetts survey respondents
said they expected to continue to do more work
found affordability and larger living space to be
remotely in the future were not more likely to say determining factors in where they would choose
that they intended to move within the next 12-24 to move
months (Exhibit 17). Reasons cited for moving are
Reasons influencing where people choose to move1,
similar to the reasons cited before the pandemic;
N=118, responses by ranking and reason
affordability, a larger living space, and weather and
climate are still determining factors in choosing Ranking: 1 2 3 4 5
Affordability
where to move.74
24 18 12 3 2 63
Yet, given the historic importance of international Larger living space
immigration to Massachusetts’ population growth, 16 15 12 4 6 53
slowing international movement due to pandemic Weather / climate
restrictions and visa backlogs could hamper 14 12 14 6 2 48
population growth for years to come. Additionally, Close to family
more residents could move from Boston to 13 10 11 4 38
0
Western and Central Massachusetts as they seek
Natural amenities (e.g. forests, mountains)
out affordable, larger living space and are required 11 13 11 7 3 45
to come to work in person less often. This trend
Sense of community
could result in small shifts of population away
10 7 7 7 10 41
from central Boston, with implications on housing
and infrastructure demand. Improved commute
9 6 7 3 4 29
Public amenities (e.g. museums, parks)
9 6 16 5 3 39
Quality of public schools
4 9 4 3 3 23
Change in tax burden
4 7 5 7 23
0
Access to childcare
4 5 2 4 5 20
1. If you are considering relocation in the next 12 months,
please rank the factors influencing where you might
choose to move
Source: MA Future of Work Resident Survey, April 12-20, 2021
43
03 – 07
EXISTING EQUITY
CHALLENGES WILL
INTENSIFY
44
The COVID-19 pandemic led to a historic national 5.4 times pre-pandemic levels77 – and remains
unemployment rate of 14.6 percent in April 2020 at 6.4 percent (2.1 times pre-pandemic levels) as
– more than three and a half times pre-pandemic of April 2021 with more than 240,000 workers
levels. People of color, women, relatively low- unemployed in the Commonwealth.78 Black
income workers, and workers without college workers in Massachusetts are particularly affected,
degrees were disproportionately affected, as they faced unemployment rates that were
exacerbating equity challenges.75 Nationally, job 9 to 13 percent higher than the rates affecting
recovery from unemployment during COVID-19 is other racial groups in February 2021. Moreover, a
expected to occur more than 18 months later for significant portion of some populations has not
women than for men; for those without college been able to work remotely during the pandemic;
degrees, recovery could happen one to two years before COVID-19, only about 20 percent of African-
later than for those with such degrees.76 American and 16 percent of Hispanic/Latino
workers worked in occupations and sectors that
The picture for Massachusetts was similar to that allowed them to work remotely, compared to
of the US. Unemployment in the Commonwealth about 30 percent of white workers and 37 percent
peaked in April 2020 at 16.4 percent – more than of Asian-American workers (Exhibits 18 and 19).
Exhibit 18: Workers aged 18-24 and Black/African-American workers in Massachusetts face 9.3-12.9%
higher unemployment rates than their counterparts
Unemployment by race/ethnicity1 and age, Feb 2021
Demographic categories are excluded if they do not meet sample size thresholds2
Employed Unemployed
0.3M 0.4M 2.7M 0.4M 0.8M 1.5M 0.7M
81.6% 85.8% 94.5% Average MA 85.2% 93.9% 93.8% 94.4%
unemployment
rate as of Feb
+12.9% 2021: 6.9%
+9.3%
18.4% 14.2% 5.5% 14.8 6.1% 6.2% 5.6%
Asian Black/ Hispanic Other* White 18-24 25-34 35-54 55-64 65+
African
American
Unemployment by race/ethnicity Unemployment by age
1. “Hispanic” as referenced here represents all Americans who self-identify as ethnically Hispanic. All other groups are solely non-
Hispanic
2. For the segmentations ethnicity/race, age, gender, income, and education level, data corresponding to a particular subsegment
is not displayed if US Current Population Survey (CPS) data is unreported, has insufficient sample size (n<30 for subsegment), or
unemployment in any month is 0% (indicative of insufficient sample size)
* Other includes: American Indian or Alaska Native, Native Hawaiian or Other Pacific Islander
Source: CPS
45
Exhibit 19: Massachusetts workers with less than a high-school education or with a family income under
$30,000 face 12.1-19.7% higher unemployment rates than their counterparts
Unemployment by educational attainment and household income1, Feb 2021
Demographic categories are excluded if they do not meet sample size thresholds2
Employed Unemployed
0.2M 1.1M 1.5M 0.9M 0.2M 0.4M 1.0M 0.7M 1.4M
77.6% 80.9% 93.0% 96.2% 97.3%
85.1% 87.4% 95.7% 97.2%
+19.7%
Average MA
+12.1% unemployment
rate as of Feb 22.4% 19.1%
14.9% 12.6% 2021: 6.9%
7.0%
4.3% 2.8% 3.8% 2.7%
Less than High Associate Masters, <$30k $30-50k $50-99k $99-150k >$150k
high school - or PhD,
school some Bachelor’s or similar
college
Unemployment by educational attainment Unemployment by household income
1. Household income refers to the total combined income of the household’s family over the past 12 months
2. For the segmentations ethnicity/race, age, gender, income, and education level, data corresponding to a particular subsegment
is not displayed if US Current Population Survey (CPS) data is unreported, has insufficient sample size (n<30 for subsegment), or
unemployment in any month is 0% (indicative of insufficient sample size)
Source: CPS
As these exhibits show, population groups out of the workforce. Similarly, Black and
negatively affected by future-of-work trends in Hispanic/Latino workers – based on their current
the Commonwealth are demographically skewed occupational and sector mix – are less likely to
toward women, young people, workers without work remotely80.
college degrees, and ethnic minorities – in
short, groups in which equity issues are already Widening gaps in wealth and access to
pronounced. (Exhibit 14.) opportunities among various ethnic and racial
communities could further concentrate and
Given these trends, it is quite likely that a compound existing challenges – from health
disproportionate amount of job displacement will outcomes and poverty to educational attainment
impact women, who represent over 85 percent and safety – if positive action is not taken.
of administrative occupations such as assistants,
secretaries, payroll clerks and receptionists.79
Without thoughtful and concentrated reskilling
and childcare efforts, these workers may drop
46
03 – 08
HOUSING OPTIONS
THAT WORK FOR
ALL WILL BE KEY
TO RETAINING AND
ATTRACTING PEOPLE
INTO THE STATE
47
In 2019, Massachusetts had the most saturated markets are often associated with higher
residential market in the US, with the fourth- prices.82 The number of units needed to keep
highest property values and the lowest vacancy up with projected population growth and reach
rates81 for both rental (3.4 percent) and home- a national average target vacancy rate were
owner properties (1.0 percent) (Exhibit 20). A calculated to estimate the low-range of units
well-functioning housing market needs additional needed to overcome potential housing shortage
units to keep up with growing population, replace in Massachusetts in 2030. In addition, given the
depreciated units, and also maintain capacity already high housing costs in the state, a higher
for sale and rent. These vacant properties enable range was calculated based on an average of
a more efficient marketplace; lower vacancy vacancies from the top 10 highest vacancy rate
Exhibit 20: Massachusetts’ housing market stock varies by WDA, but residential occupancy is near-
capacity statewide
Total housing Total reported Housing stock out of Real occupancy rate1
Workforce stock occupancy rate market 2018, % of stock in
development area 2018, 000’s 2018, % of total 2018, % of total stock market
Boston 293 91.6% 6.3% 97.7%
Metro North 334 94.3% 4.0% 98.2%
South shore 228 92.6% 6.2% 98.8%
Central MA 240 92.8% 5.0% 97.7%
Greater New Bedford 94 88.8% 8.9% 97.5%
Metro South/West 374 95.3% 3.1% 98.4%
Lower Merrimack Valley 137 94.1% 3.8% 97.8%
Brockton 89 94.7% 3.6% 98.3%
North Shore 176 93.9% 4.9% 98.7%
North Central 104 92.7% 5.5% 98.0%
Hampden County 195 92.6% 5.2% 97.7%
Bristol County 156 92.9% 4.8% 97.6%
Berkshire County 69 79.3% 18.5% 97.3%
Franklin/Hampshire 104 91.0% 7.1% 98.0%
Greater Lowell 110 96.0% 2.5% 98.5%
Cape & Islands 195 54.3% 44.0% 96.9%
MA total 2897 90.3% 7.8% 98.0%
1. Removed residential RE not available in market (not for rent/sell nor occupied)
Source: ADP, American Community Survey, UMASS-Donahue Population Projections, McKinsey Global Institute analysis, “The future
of Work after COVID-19”, April 2021
48
states as well as taking into account the highest The net population of Massachusetts is expected
vacancy rates in the US for each category – rental to grow at a rate of 4.5 percent by 2030,86 creating
and homeowner. Our analysis and models reflect a need for up to 90,000 more housing units87 in
a shortage of 125,000-200,000 housing units by addition to the 35,000-110,000 required just to
2030. This gross, statewide number does not, catch up with unmet demand.88 This market stress
however, account for more specific or regional exists state-wide, with all regions of Massachusetts
goals such as transit-oriented and multi-family showing a real occupancy rate of more than 97
development which may be necessary for the state percent. Maintaining growth in residential housing
to meet to achieve much greater affordability. units, then, may be essential to keep up with
Massachusetts faced competitive pressures demand. Without continued growth, expanding
related to housing affordability prior to the the workforce enough to attract new businesses
pandemic, and as remote/hybrid work continues may be difficult, which will hamper the state’s
to enable mobility and boosts the importance of competitiveness and growth.
larger living space, housing affordability is likely to
become even more important for Massachusetts’
Exhibit 21: During COVID-19 housing prices
competitiveness. continued to increase, with moderate-density
areas increasing the most
During the pandemic, there was some indication
Growth in average 2BR house prices by population
that more people were buying houses in moderate density1,2
and low-density areas. Housing prices in these Jan. 2020 = 0
areas rose 0.16 percent between January 2020 and
March 2021 – almost quadruple the rise in prices 0.16% Moderate density
in extremely high-density areas (Exhibit 21). This
price increase may signal a desire for additional 0.14%
space during the pandemic (cited as the second- Low
0.12% density
most common factor in determining where to
move in the survey of Massachusetts residents). High
0.10% density
This shift could present an opportunity to improve
Gateway Cities’ (defined as midsize urban centers 0.08%
that anchor regional economies around the state)
attractiveness, as these cities’ rents rose by as 0.06% Sparse
much as 12 percent in lower-cost markets, such as
0.04%
Fall River.83  Extremely
highdensity
0.02%
Lower-density suburbs outside the Boston area
may also see higher demand post-pandemic. 0%
Redfin and Zillow are predicting post-COVID Ja
Fe
M
A
n
b
ar
pr
Ju
Aug
l Se
p
O
ct ov ec
Ja Fen
M
ar
M
Juay N D b
housing booms in suburbs and smaller cities and
n
have found national survey data indicating that 1. MA counties categorized by density: Extremely high
density: Suffolk County; High density: Middlesex, Norfolk,
remote workers in cities are more likely to move to Essex counties; Moderate density: Bristol County; Low
density: Plymouth, Hampden, Worcester, Barnstable
more spacious housing.84 Some of these potential
counties; Sparse: Nantucket, Hampshire, Dukes, Berkshire,
changes may be temporary, however; while Franklin counties
2. Extremely high density: Above 2,000 people/mi2; High
rents in Boston have not yet recovered to pre- density: 1,500-2,000 people/mi2 ; Moderate density: 1,001-
COVID-19 levels, they have been rebounding since 1,500 people/mi2; Low density: 501 – 1,000 people/mi2;
Sparse: 0 – 500 people/mi2
December 2020.85
Source: Zillow Housing Index, ACS 2019
49
04
REGIONAL
IMPLICATIONS
For the purpose of these analyses,
regional archetypes were identified
that broadly capture the breadth
of Massachusetts. These regional
archetypes include: Boston/
Cambridge, Urban Residential,
Gateway Cities, Suburban
Greater Boston, Suburban Non-
Boston, Rural (Tourism based
economies), and Rural. We mapped
Massachusetts municipalities to
these archetypes and assessed the
potential impact of future-of-work
implications on each. (Exhibit 22)
50
Exhibit 22: Massachusetts municipalities were mapped to regional archetypes to understand how each
would be impacted by future-of-work implications
Future-of-work regional archetypes by municipality
Mapping 351 municipalities to the 7 regional archetypes
Boston/Cambridge
Greater Boston Urban Residential
Gateway Cities
Suburban Greater Boston
Suburban Non-Boston
Rural (Tourism based economies)
Rural
Source: LMI, US Census
Some of the insights – such as slowing population (Boston/Cambridge, Urban Residential, Suburban
growth, the need for accelerated reskilling, Greater Boston, and Gateway Cities) will likely
automation’s impact on equity, and a lack of endure the most disruption from future-of-work
workable housing options for all – apply almost trends. For the remaining three archetypes, the
universally to all of the archetypes. Other insights changes will likely be modest but will add to
– such as the reduction in commuter-rail ridership existing challenges already facing those regions.
– affect a few of the archetypes (Suburban For each archetype, the likely disruptions were
Greater Boston, Greater Boston Urban Residential, highlighted and potential impact of the identified
Gateway Cities, and Boston/Cambridge) much future-of-work implications explored (Exhibit 23).
more strongly than the rest. Four of the archetypes
51
Exhibit 23: Future-of-work insights for the Commonwealth will likely impact four of the archetypes (A-D)
more than the rest
Potential impact of major trends across regional archetypes
Scale of impact from Future of Work
F. Rural
B. Greater D. Suburban (Tourism
A. Boston/ Boston Urban C. Gateway Greater E. Suburban based
Trends Cambridge Residential Cities Boston Non-Boston economies) G. Rural
1. Reduced demand
for office real
estate
2. Need for
affordable, flexible,
childcare options
3. Ridership decline
in public transit
4. Reduced business
travel
5. Accelerated pace
and scale of
reskilling
6. Slowing
population growth
7. Greater equity
challenges
8. Capacity
costrained
housing options
Source: LMI data, US Census, McKinsey Global Institute analysis, “The Future of Work after COVID-19”, April 2021
52
04 – 01
BOSTON/
CAMBRIDGE
Boston/Cambridge areas will
be strongly impacted by almost
all future of work trends, but
overall will likely remain a leader
in innovation and talent due to
strong fundamentalss.
53
Boston and Cambridge’s strong fundamentals suffer disruption. A survey conducted by the
– such as its access to world-class, diverse talent Commonwealth to gauge citizen and business
and its proximity to research institutions – will sentiment found that 12 percent of businesses may
remain largely unaffected (absent other shocks) close due to the impact of remote and hybrid work
and continue to attract growing sectors of the new models and reductions in business travel, and 26
economy, such as e-commerce, biotechnology, percent may consider moving their business to a
AI and robotics/automation. Boston/Cambridge different area.94
represents 11.6 percent of the state’s total
population and 22.6 percent of the state’s total Especially in increased remote-work scenarios,
employment.population and 22.6 percent of the areas with Class B and C office real estate (which
state’s total employment. consists of older buildings, often in less desirable
locations than Class A) will likely see the most
While fundamentals will remain robust, vacancies or redevelopment. Localities in the
future-of-work trends are expected to impact Boston Central Business District with the most
Boston/Cambridge more than other regions square feet in Class B and Class C real estate
in all scenarios modeled. The shifting center (such as the financial district, which has 11.7
of gravity away from the urban core will be million square feet; Seaport, which has 6 million
especially significant to Boston/Cambridge; of square feet; and Beacon Hill, which has 4.5 million
the 245,000 net-inflow of commuters into Boston square feet95) may see increased vacancies. More
in 2019,89 34 percent work in roles that could expensive Class A real estate may see some
be performed remotely 90 – higher than most reduction in rent per square foot but with higher
other cities. Additionally, this region will likely be occupancy rates, as businesses currently in Class B
most impacted by decreases in business travel real estate use this opportunity to move to smaller
– resulting in an estimated reduction of up to Class A spaces.
30,000 visitors to Boston per day 91 – and declines
in resident population due to migration to other That said, there is early, emerging evidence96
parts of the state. During 2020, Boston/Cambridge of office spaces being converted to lab
saw increased domestic outflows of ~10,000 spaces in an effort to meet R&D and medical
residents, and estimated decreased international companies’ growing demand for in-person work
inflows by ~6,000 residents, when compared environments. This trend is drawing new types of
to 2019 figures.92 Some of this outflow may be tenants to Boston/Cambridge and changing the
temporary, due to COVID-19 risks and closed sector and occupation mix of workers downtown.
campuses, while a portion is likely permanent due Other new types of tenants could include
to the freedom of hybrid working models, desire educational institutions, which were previously
for more space, and financial pressures93. constrained by space.
Across all three scenarios in the future-of-work Meanwhile, lower prices due to reduced demand97
models (explained in the Methodology section will likely encourage mid-sized businesses to
of this report), reductions in the number of lease previously unaffordable office real estate
commuters and travelers could impact the in Boston/Cambridge, causing a different mix
vibrancy of parts of Boston/Cambridge. Real of firms to enter the area and replace the retail
estate vacancies could increase as affected retail spending of outgoing hybrid/remote office
businesses relocate or close due to declining workers. How real estate footprints will be
business. Retail, food service, office supplies impacted will depend on the degree to which
and commuter-oriented businesses may remote/hybrid work is eventually adopted, as
54
well as how “sticky” the remote-working trend affecting occupations like retail salespersons, stock
is over a five-to-ten-year period. Whether and clerks, cashiers, tellers and dishwashers. At the
how new businesses and sectors will expand into same time, the types of occupations in demand
existing retail space is also in question. In short, are likely to change, and workers may be able
the evolution of trends impacting real estate in to “jump” income levels if reskilling efforts are
Boston/Cambridge remains uncertain and thus successful.
requires monitoring over time.
Sectors likely to benefit from the expansion of
The cost of living in Boston/Cambridge may e-commerce and remote/hybrid work (such as
improve somewhat if the shift away from urban online retail, food delivery and software) are likely
areas actually occurs and relieves some of today’s to grow (e-commerce adoption, for example, is
pressure and density. The potential decrease in projected to expand from 25 to 38 percent of retail
population growth and/or reduction in commuters spend from 2024-2030)100 and could thus continue
may help to alleviate childcare shortages as to draw talent to Boston/Cambridge. As evidence,
well. However, over the next five to ten years, our Amazon recently announced plans to create 3,000
modeling indicates that the Boston Workforce new jobs at its Boston tech hub in Seaport,101
Development Area (WDA) will continue to endure while Apple promised to add “hundreds” of jobs
shortages in available childcare for children ages in the Greater Boston area by 2026 as part of a
zero to five years, as the Boston WDA alone needs nationwide, $430 billion expansion in AI, advanced
approximately 3,000 to 4,000 additional childcare manufacturing, silicon engineering and 5G.102
workers. To continue this momentum, talent will be key;
according to a survey by the Massachusetts
Future-of-work effects will not be felt by all Business Roundtable (MBR), access to world-class
population across Boston/Cambridge equally, talent is the number-one reason to expand in
potentially exacerbating the inequities that have Massachusetts.103
existed since before the pandemic. Lower-income
workers and small independent businesses will Pre-pandemic congestion levels in Boston/
likely be most at risk, as they can less readily adapt Cambridge are likely to return: although
by re-locating or finding alternate employment. increased work from home may marginally
Small businesses in Boston/Cambridge are seeing reduce congestion in the traditional morning
declines in revenue; for example, within Beacon and post mid-day peaks, this would be
Hill, Back Bay, and Cambridge, small businesses counterbalanced by increased freight traffic from
experienced revenue losses of about 40 percent in a rise of e-commerce, and a small, but potentially
May 2021 in comparison to January 2020 figures.98 significant, mode shift that may occur from transit
Employment rates are likewise suffering; while to automobiles.
rates for high-wage workers have mostly recovered
to pre-COVID-19 levels, rates for low-wage workers
remain significantly lower than before the
pandemic.99
While these numbers contrast data from two
periods in time during the pandemic at a time of
significant fluctuation, our analysis shows that up
to 16,000 jobs could disappear from the Boston
WDA by 2025 in all three of the modeled scenarios,
55
04 – 02
GREATER
BOSTON
URBAN
RESIDENTIAL
Greater Boston Urban
Residential areas may face the
most challenges post-pandemic,
particularly as residents work in
sectors that are more vulnerable
to disruption (hospitality, retail,
food service).
56
The Greater Boston Urban Residential archetype Additionally, based on evidence from the current
comprises municipalities within about 15 miles of unemployment insurance claimant pool, a focus
Boston that tend to have relatively lower average on language training (such as English to Speakers
wages, a higher proportion of immigrant and of Other Languages (ESOL) programs) in cities
minority communities,104 and a higher proportion with larger immigrant communities (such as
of residents employed in sectors vulnerable to Chelsea, Everett, Revere, and East Boston) will not
future-of-work trends. These sectors include only help this segment but also create additional
hospitality, retail and food service.105 employable talent for the Commonwealth.
Childcare availability will also be a significant
Greater Boston Urban Residential areas represent barrier for workers in these areas, which after
7.0 percent of the state’s total population and 4.5 Boston, could face some of the state’s highest
percent of the state’s total employment. They gaps in childcare availability, across all future of
were facing challenges prior to the pandemic work scenarios.
– including food insecurity, relatively lower
education levels, and a lack of access to affordable Transit access will remain important, with 33
childcare.106 The pandemic has affected these percent of Mattapan and Roxbury residents, 29
areas more severely than many others; they percent of Chelsea residents, 27 percent of Revere
have experienced both higher COVID-19 case residents, and 24 percent of Everett residents
rates107 and higher unemployment due to a taking public transit to work. Most of these riders
lower proportion of jobs with remote and hybrid are not working in sectors that will be able to
work capability.108 Future-of-work implications work remotely.110 For these geographies, high-
like automation displacement, employment quality transit service (despite potentially reduced
disruption by e-commerce, and reduced business ridership compared to pre-COVID-19 levels) is
travel will also disproportionately impact them. necessary to maintain access to employment, and
As people in this regional archetype are less likely reductions in service levels could be detrimental.
to work remotely, city centers will probably not
see revitalization from increased time spent in
residential areas.
Reskilling will likely be critical, especially for
workers who are vulnerable to automation and
e-commerce and/or impacted by the decline in
business travel. Many of these workers may need
assistance in transitioning to new employment.
Targeted reskilling may provide an opportunity
to move residents to “gateway” jobs, which
are stepping-stone positions that could lead
to middle-wage or higher-wage jobs. Gateway
jobs with the highest transition volume as of
2019 included retail salespersons, customer-
service representatives, administrative assistants,
construction carpenters, nursing assistants and
automotive service technicians and mechanics.109
57
04 – 03
GATEWAY
CITIES
Gateway Cities may
experience the same future
of work trends as Boston/
Cambridge, but on a much
smaller scale. Reskilling with
an eye towards technology
access and literacy may be
crucial.
58
Gateway Cities are midsize urban centers as during the pandemic.
defined by state law, that anchor regional
economies around the state111. These cities As workforce needs evolve, reskilling may prove
represent approximately 19 percent of the state’s critical. In particular, retail trade sectors will likely
total population and approximately 16 percent be affected by automation; modeling shows
of the state’s total employment.112 Even prior to employment in the retail trade falling by as much
the pandemic, Gateway Cities were struggling to as 9 percent by 2030. This sector constitutes 6
attract investment and economic opportunity. A to 8 percent of employment in Gateway Cities.119
relatively aging workforce and outflow of younger Furthermore, the workforce needs to have
working-age people both contributed to these expanded technological skills to prepare for future
cities’ labor gap and lack of urban vitality. For job demands. This effort will necessitate investing
example, although Gateway Cities are home to just in basic computer skills and digital literacy,
25 percent of the Commonwealth’s population, especially for low-income residents. As evidence,
they have more than 44 percent of the state more than 30 percent of Springfield households
population that falls below the poverty threshold. do not have sufficient technology access, mostly
113
due to lack of computer hardware or digital
literacy.120
The impact of future-of-work trends on Gateway
Cities may resemble the impact on Greater Our modeling finds that healthcare growth will
Boston/Cambridge – but on a smaller scale, with likely be more pronounced in Gateway Cities. The
fewer out-of-county commuters and a smaller sector is expected to grow from 25 to 31 percent
proportion of the population that can work of employment by 2030 – a higher rate than in
remotely. (Gateway Cities’ largest industries other Commonwealth areas, where healthcare
are healthcare, education, government and employment ranges from 17 to 20 percent. Across
manufacturing.) Gateway Cities also have a the three scenarios modeled, this growth will be
smaller proportion of sectors that will be affected strongest in areas with large aging populations
by reduced business travel, as the food and or healthcare-based economies, such as New
hospitality sectors account for 7 to 8 percent of Bedford and Lowell. Engaging the healthcare
employment versus 10 percent in Boston.114 sector to encourage demand for reskilling in these
areas and provide jobs with room for growth could
While a smaller proportion of Gateway City be a way to improve upward mobility.
employees can work remotely, many businesses
can still shift their employees to remote working; Falling demand for office real estate could also
for example, large insurance companies had impact the Gateway Cities (notably Springfield,
nearly all employees working remotely during the Lowell, Worcester, and Lawrence, which have
pandemic and expect to offer more such choices the greatest amount of vulnerable Class B and C
to employees in the future.115 Gateway Cities could office space121). This in turn could threaten these
have an advantage as people seek out more cities’ attractiveness if spaces remain vacant but
affordable and spacious accommodations; during could also provide opportunities for revitalization
COVID-19, rents increased by 2 to 12 percent,116 and if spaces can be converted to new uses, such as
home values by 14 to 24 percent.117 Notably, this housing.
increase occurred at a time when rents and home
values in areas like Boston, for example, were Increasing manufacturing demand (with an
falling. Migration data shows some migration into expected statewide increase of 4 percent) and
these cities (-0.4 to 4.3 percent)118 has occurred affordable, available commercial real estate
59
suitably close to suburban remote/hybrid
workers may attract businesses that still need
physical spaces, such as medical technology,
biotechnology, and on-shore manufacturing
companies. For example, Shawmut opened an
N95 factory in West Bridgewater,122 and Merrow
Manufacturing became the largest manufacturer
of personal protective equipment (PPE) in Fall
River.123
Addressing the affordable childcare gap in the
future may enable more women in these areas
to re-enter the workforce, especially as growing
healthcare demand could create shortages in roles
such as nurses and home health aides, which are
typically filled by a higher proportion of women
(with female employees making up 90 percent
and 82 percent of each profession respectively
in 2019124). At 5.6 to 12.4 percent in November
2020,125 unemployment rates among these roles in
Gateway Cities lagged behind rates in the rest of
Massachusetts.
Gateway Cities’ populations could increase if
cities like Springfield and Worcester can lure
remote workers away from the Boston Metro area,
creating the potential for a more vibrant economy.
However, increasing prices and fewer housing
options could also put affordability pressure on
local residents and risk their displacement.
60
04 – 04
SUBURBAN
GREATER
BOSTON
Suburban Greater Boston
communities may be the
natural beneficiaries of future of
work trends, with potential for
increased vibrancy as remote-
eligible workers spend more
time closer to home.
61
The Suburban Greater Boston archetype includes and food-service spending from business districts
suburban neighborhoods within 20 miles of like Boston/Cambridge to local businesses in
Boston, which are characterized by higher the suburbs, potentially encouraging businesses
median income, and higher rates of educational to pivot to residential areas or expand their
attainment. These towns represent 30.6 percent of e-commerce offerings. This in turn could also
Massachusetts’ total population and 33.1 percent boost the vitality of Suburban Greater Boston,
of the state’s total employment. According to our as new local businesses open, increasing area
modeling, Suburban Greater Boston communities attractiveness.
in Massachusetts’ “knowledge core” may become
natural beneficiaries of future-of-work trends. Likewise, the demand for childcare could shift
These areas have a higher proportion of residents from Boston/Cambridge to Suburban Greater
who work in sectors that lend themselves to Boston areas as workers seek childcare closer to
remote work (such as professional and scientific home. This development could pose a challenge
services, finance and insurance), so residents may since these areas were already facing shortages
spend more time close to home, thus creating in childcare availability. The models indicate that
more vibrant residential communities and local the Metro North WDA and Metro South Shore
downtowns. WDA, for example, face some of the state’s highest
shortages in childcare availability, with a childcare
Throughout the pandemic, suburban Boston workforce shortage of 6,000 to 8,000 workers
communities enjoyed lower unemployment rates, across both WDAs.
as their largest employers come from sectors
facing fewer restrictions due to the pandemic. An increase in remote and hybrid work from
As evidence, the city of Concord had a June pre-pandemic levels may lead workers to scale
2020 unemployment rate of 10 percent, while back their commuting days to one to three days a
Lawrence had a rate of 33 percent, Revere a rate week. Moreover, up to 4.5 percent of the Suburban
of 28 percent, and Boston 19 percent.126 Suburban Boston population could shift from transit to
Greater Boston also experienced a small increase auto commutes by 2025, depending on the
in net migration compared to 2019; the city of scenario. Relatively wealthy, multiple car-owning
Lexington increased by 0.7 percent, Concord by households may shift to auto travel after changing
0.6 percent, and Wellesley by 0.6 percent.127 The their transit habits during the pandemic. The
increase could be attributed to these cities’ more resulting impact to commuter-rail ridership could
spacious suburban housing, although their growth be significant.
is hampered somewhat by limited affordability
and housing inventory. All these transportation trends could cause surface
roads to become more congested as traffic shifts
Suburban Boston towns may be on the receiving from arterial commuting to more local traffic.
end of the shifting center of gravity away due Congestion could be further compounded by the
to new ways of working. A large proportion of growth in last-mile deliveries due to expanding
Suburban Boston residents commute into the city e-commerce, inefficient trip-chaining (i.e.,
of Boston for work and thus spend much of their making multiple, single-purpose trips rather than
time and money outside their local community. combining work-related and non-work-related
If the trend toward remote and hybrid work takes trips), and increased vehicle usage throughout the
hold, however, these communities may have an day. Given the prevalence of shorter (less than five-
opportunity for mixed-use economic activity. More mile) trips, the demand for micro-mobility options
time spent in residential areas could move retail and infrastructure – such as bicycle lanes and
62
electric scooters – could rise as a way to reduce
congestion and increase mobility, outside of the
provisioning of traditional transit options.
Real estate prices may likewise climb as demand
for suburban areas grows. During COVID-19,
housing values grew approximately 12 percent
in suburban areas, compared to an average
of about 20 percent in Gateway Cities and 6
percent in Boston. (Specifically, Wellesley saw
an increase of 11 percent in housing values, while
values in Newton, Concord and Lexington grew
by 9 percent, and Winchester’s values increased
by 10 percent.) Given the higher base home
values in these areas, the average increase in
home values over that time period was $70,000,
about 40% higher than the average increase in
Gateway Cities.128 This continuing rise in prices
could deter urban residents from moving into
the suburbs, potentially pushing them to more
rural suburbs or Gateway Cities. High housing
prices and low availability reduces Massachusetts’
competitiveness, and may even prompt residents
seeking more space to move to lower cost states
or discourage potential talent from moving into
the state.
If the adoption of remote or hybrid work becomes
permanent, the resulting changes could
significantly impact Greater Suburban Boston.
Given the uncertainties surrounding this trend, it
will need to be closely monitored and managed to
fully understand its implications for the future.
63
04 – 05
SUBURBAN –
NON-BOSTON
Suburban Non-Boston will
likely see subdued growth due
to a smaller concentration of
workers in sectors that will be
high-growth.
64
Our “Suburban – Non-Boston” archetype consists typically associated with jobs suited for remote or
of municipalities more than 20 miles away from hybrid work. Therefore, time spent in these areas
Boston, with populations comprising more than is unlikely to significantly increase due to hybrid
5,000 residents and median incomes close to work, and these areas are thus less likely to see
Massachusetts’ state-wide average. Suburban resulting growth in local economic activity.
– Non-Boston has a lower share of professional
service and knowledge workers than other areas, Housing occupancy rates in Suburban – Non-
a smaller share of commuters to Boston, and Boston areas remain high, with real occupancy
high commuter flows to other areas. Workers in rates exceeding 98 percent for most. During
these areas are spread out across sectors, with COVID-19, housing values increased by more than
the highest numbers employed in healthcare (16 16 percent on average (specifically, by 14 percent in
percent), manufacturing (14 percent), and retail Dartmouth, Shrewsbury, Plymouth, and Ipswich,
(12 percent) sectors.129 These areas have enjoyed and by 15 percent in Amesbury).132 The increase in
relative resilience in employment during COVID-19. housing costs and low availability of housing stock
could encourage lower-income workers to move to
Our models indicate that these areas will likely neighboring Gateway Cities or surrounding lower-
see subdued employment growth over the next cost areas.
ten years across all scenarios, despite increasing
manufacturing demand (with an expected Moreover, Suburban – Non-Boston areas face
statewide increase of 4 percent). This subdued challenges in both availability and affordability of
growth can be attributed to Suburban – Non- childcare. The Central Massachusetts WDA, for
Boston’s smaller concentration of workers in example, has the third-highest childcare supply
high-growth sectors; healthcare, for example, gap among WDAs in Massachusetts, and models
employs 16 percent of workers versus 25 percent show it could have a shortage of up to 3,000
in Gateway Cities130. Future-of-work models project childcare workers over the next five years. Housing
employment growth of 3.9 percent in these areas for all and access to affordable childcare will pose
from 2018-2030, while the state overall is expected ongoing challenges for these suburban areas to
to see growth of 5.9 percent across all scenarios. address.
Suburban – Non-Boston represents 25.6 percent of
the state’s total population and 19.0 percent of the
state’s total employment.
As of April 2021, suburban non-Boston
communities had average or lower unemployment
rates. Shrewsbury had a 4.1 percent rate, Andover a
4.6 percent rate, and Plymouth a 6.1 percent rate –
below the state of Massachusetts’ overall rate of 6.5
percent.131 These areas will likely be less impacted
for example by reduced business travel due to
their higher dependance on local demand for
economic growth. Workers in these communities
tend to commute to nearby Gateway Cities and
other populous outlying suburbs. A significant
portion of residents commute, and a lower share
of workers in these areas is employed by sectors
65
04 – 06
RURAL
(TOURISM
BASED
ECONOMIES)
This regional archetype has
seen the most in-migration –
likely temporary, driven by the
pandemic. Increased adoption
of remote and hybrid work could
spur population growth attracting
remote/hybrid workers from the
Boston metro area, boosting
spending and economic activity
but also putting additional
affordability pressures on housing
and childcare.
66
The Rural (Tourism based economies) regional During the COVID-19 pandemic, these areas have
archetype includes municipalities that are outside experienced very high migration flows, with net
the commuting distance to Boston, are less intake in the Berkshires and Cape areas doubling
dense, and have higher median incomes. Tourism or tripling over the past year.136 While most of this
accounts for a large share of these communities’ migration is likely temporary and driven by the
economies. These areas have population sizes that pandemic, the increased adoption of remote and
generally fall below 15,000 and median incomes hybrid work could spur population growth if these
that are lower than the state average for year- areas can attract remote workers from the Boston
round residents, and higher than the state average metro area. This change could boost spending
for part-time residents. The Rural (Tourism based and economic activity in Rural (Tourism based
economies) region represents 4.8 percent of the economies) areas, but it could also put additional
state’s total population and 4.3 percent of the affordability pressure on housing and childcare.
state’s total employment.
Rural (Tourism based economies) areas have
saturated housing markets characterized by high
prices and a high share of housing stock that is not
for sale, as many are second homes. Workers in
these areas tend to be primarily employed in the
service and support sectors, with many workers
commuting in from adjacent areas. Compared to
other regional archetypes, Rural (Tourism based
economies)areas have a higher share of workers
in the hospitality and food-services sectors (at
17.3 percent versus the Massachusetts average of
9.3 percent), arts and entertainment (4.4 percent
compared to the state average of 1.9 percent),
and retail trade (at 16.3 percent versus the
Massachusetts average of 10.5 percent).133
As of April 2021, Rural (Tourism based economies)
areas had some of the highest unemployment
rates in the Commonwealth (at 6.9 percent
in Barnstable, 6.4 percent in Stockbridge, 8.5
percent in Dennis, and 7.6 percent in Gloucester
– compared to the state average of 6.5 percent)134.
These higher rates can be partially attributed
to the mix of sectors in these areas and the
sharp decline in tourism.135 Our models project
modest growth of 4.3 percent in employment
from 2018-2030 for these areas (compared to 5.9
percent growth for the state overall). Demand
for healthcare workers may increase in these
areas due to their aging population and high
concentration of retirees.
67
04 – 07
RURAL
This regional archetype will
likely experience the lowest
employment growth – lower
than the state average – and
reskilling could play a critical
role in developing these
economies.
68
The rural area archetype consists of municipalities Reskilling could play a critical role in developing
with populations lower than 2,500 and low- these economies as workforce needs evolve,
density, low-transit areas. These areas account particularly given the disproportionate
for 1.3 percent of the state’s total population and concentration of low-growth sectors that carry
less than 1 percent of total state employment. greater risk of worker displacement. In addition,
Population growth over the last ten years in WDAs increasing housing prices could put affordability
like Franklin/Hampshire has ranked among the pressure on local residents and drive further
lowest in the state, with Berkshire County being displacement. The residential real estate market
the only WDA in Massachusetts to experience is saturated in rural Massachusetts thanks to its
a decline in net population.137 As of April 2021, low supply of housing stock. Home prices over
unemployment in rural areas of Massachusetts the past year have increased in places like Wales
ranged widely, from 2.1 percent in Leyden to 9.2 (16 percent), Princeton (13 percent), and Erving (15
percent in Becket. percent).139 Improving access to housing options
that work for all residents could also attract
These rural areas have a median income lower new residents looking for more space and more
than Massachusetts’ state average. The top affordable conditions.
employment sectors include construction,
representing 18.3 percent of total employment
(compared to the state average of 4.9 percent),
and hospitality and food services, which accounts
for 17.3 percent of employment (versus the state
average of 9.3 percent). Healthcare is the third-
highest employment sector but employs just 14.0
percent of workers in the region – far less than the
overall state average of 19.2 percent.138 Based on
our modeling, the current mix of sectors in these
areas may cause them to experience the lowest
employment growth of all regions through 2030,
at just 3.7 percent. The state average is 5.9 percent.
69
06
GOING
FORWARD
Research for this report was
completed just as vaccinations
were ramping up in Massachusetts,
with expanded supply and
approximately 6.4 million doses
administered as of May 6.140 It was
and remains a time of extreme
uncertainty, with the sustainability
and degree of the trends taking
root still a question.
70
Businesses and others are still determining how under various scenarios to understand which
to implement long-term hybrid work models, for sectors, geographies and aspects of life will
example, and making momentous choices related be more sensitive to future-of-work changes.
to office leasing, post-pandemic business travel We hope to help equip the Commonwealth
policies, and the speed of international reopening, of Massachusetts to think through the many
among others. The remainder of 2021 will likely potential implications inherent to the future of
be a time of experimentation in which residents, work. As part of that effort, metrics were identified
businesses, educational institutions and students across each of the eight top insights that can be
try new ways of working and living as they emerge monitored to track the Commonwealth’s progress
from the pandemic and begin to settle into a “new in a variety of scenarios. Quarterly and in some
normal.” cases annual tracking of the following metrics may
help to understand how Massachusetts will evolve
That said, these analyses have endeavored to as it moves toward a post-pandemic equilibrium.
assess the potential impact of the future of work
Exhibit 24: Metrics to monitor on a quarterly or yearly basis
Insights Metrics Sources
1. Reduced Employment growth by municipality (particularly LMI
demand for retail)
office real estate
VMT/local traffic indicators MassDOT
Toll revenues MassDOT
2. Need for Childcare supply (labor and “slots” by age group) EEC surveys, EEC licensing data
affordable,
flexible, Childcare demand by location Estimates based on ACS population
childcare data
options
Labor force participantion by gender CPS micro-data (IPUMS)
3. Ridership Ridership by mode MassDOT/MBTA/NTD
decline in public
transit VMT MassDOT
Car registrations RMV
Parking occupancy City of Boston
4. Reduced Congestion data over time of day and geography Waze/Tom Tom
business travel Monthly air passengers (split by leisure/business, MassPort ( supplemented with surveys)
domestic/international)
Average routes originating at Logan Airport MassPort
Hotel occupancy rates Occupancy taxes, GBCVB
Accomodation and food services employment LMI
71
Insights Metrics Sources
5. Reduced Congestion data over time of day and geography Waze/Tom Tom
business travel Monthly air passengers (split by leisure/business, MassPort ( supplemented with surveys)
domestic/international)
Average routes originating at Logan Airport MassPort
Hotel occupancy rates Occupancy taxes, GBCVB
6. Reduced Employment growth by sector LMI
demand for
office real estate Unemployment by sector UI Claimant data
Job openings MassHire, survey employers
Program enrollment and outcome metrics Workforce Development Team
7. Greater equity Unemployment and labor force participation by CPS micro-data (IPMUS)
challenges gender, ethnicity, education level, and age
8. Capacity Monthly building permits US census
constrained
housing options Monthly housing reports from trusted partners Greater Boston Association of Realtor
Yearly ACS insicatiors, which includes total stock, ACS (table DP04)
occupied stock by type and vacansy rates
72
07
APPENDIX AND
METHODOLOGY
73
This appendix provides methodological details on the following analyses:
1. Scenarios
2. Employment modeling
3. Remote work potential
4. Migration modeling
5. Real estate modeling
6. Childcare modeling
7. Transportation modeling
It also provides details on the Advisory Council, including its membership.
1. Scenarios pace accelerated by COVID-19, people eligible
to work remotely do so two days per week, and
We constructed three scenarios that remain e-commerce continues at an increased pace.
consistent across all modeling efforts: Scenario A,
Trends return to pre-pandemic levels, Scenario B, “Scenario C: Remote/distributed work becomes
Trends continue at levels seen during COVID-19, more permanent” assumes that trends continue
and Scenario C, Remote/distributed work becomes a trajectory seen during COVID-19 but explores
more permanent. The goal of these scenarios is the impact of an even more exaggerated move to
not to portray every possible outcome, but rather hybrid and remote work. This scenario differs from
to consider a range of two to three scenarios and Scenario B by assuming that all those eligible to
explore potential implications under each for the work remotely work at their maximum efficient
Commonwealth. capacity, assumed to be three or more days per
week. Scenario C also explores a stronger impact
“Scenario A: Trends return to pre-pandemic of remote work on residents’ center of gravity,
levels” assumes that trends return to the pre- with retail businesses relocating to serve remote
COVID-19 trajectory and serves as a baseline for workers in residential areas.
discerning COVID-19’s effect on different modeled
outcomes. This scenario assumes that automation Scenarios were grounded in expert interviews,
continues at a more modest pace, business travel surveys, and existing Oxford Economics and
returns to almost pre-pandemic levels, and people Euromonitor projections of different trajectories
return largely to in-person work. COVID-19 impacts, and assessed the range of likely inputs at the time
particularly from observed migration impacts for of this report.
2020, are still accounted for.
2. Employment modeling
“Scenario B: Trends continue at levels seen
during COVID-19” assumes that trends continue Scenario A and B followed the net labor demand
on a trajectory seen during COVID-19 and modeling as outlined by The Future of Work after
serves as a comparison for exploring COVID- COVID-19 report, localized for a Massachusetts
19’s potential effect on different aspects of context and created at the Workforce
work in Massachusetts. This scenario assumes Development Area level for 2025 and 2030, based
that automation adoption continues at a rapid on LMI data at the municipality level. For more
74
detailed information on the Future of Work in Massachusetts remains the same but is
methodology, please see the technical appendix redistributed across the Commonwealth, with
of the MGI Report, The Future of Work after more economic activity in residential areas. A
COVID-19. proportion of customer-facing sectors in line
with the proportion of remote workers moves
Scenario A estimates the labor demand effects of employment closer to commuters’ residential
McKinsey Global Institute’s midpoint automation areas rather than their place of work, redistributing
adoption scenario and identified long-term trends. employment away from Boston toward the
These trends include: rising incomes, which knowledge core.
represent increased consumer spending as well
as overall spending on healthcare and education Job transitions are defined as jobs in net declining
that results from increased prosperity; aging occupations compared to the 2030 baseline
populations, which in many countries will raise (which assumed 3.4 percent growth by 2030
healthcare demand; investment in technology across all occupations).
that companies deploy in the wake of increasing
technological progression; ongoing spending on 3. Remote work potential
infrastructure and commercial and residential
buildings; the shift away from fossil fuels and move Remote work potential followed the methodology
toward green energy production; investment to outlined by The Future of Work after COVID-19
improve education standards; and marketization report, localized for the Massachusetts context. For
of unpaid care work as more women enter the more detailed information on the Future of Work
labor force. These models were updated with the methodology, please see the technical appendix of
latest available economic and labor force data and the MGI Report The Future of Work after COVID-19.
assumed a return to full employment by 2030.
Remote work potential was estimated based on
Scenario B projects the labor demand effects of work activities, and the percentage of time that
the trends above, as well additional COVID-19- could be spent doing effective remote activities
specific trends: increased remote work and virtual for each occupation. This was based on an analysis
meetings, a shift to e-commerce and other virtual of more than 2,000 work activities and 800
transactions, and faster adoption of automation occupations, using the 2018 O*Net database of the
and AI. For both Scenario A and Scenario B, the Employment and Training Administration of the
steps in estimating final labor demand at the US Department of Labor.
occupation level are (a) create a 2018 employment
baseline with standard occupation taxonomy; (b) Remote work potential (both theoretical and
construct a baseline of employment in 2030; (c) effective) was determined for each activity and
size the jobs lost and jobs gained effects of each occupational context based on expert interviews
trend (in the case of the post-COVID 19 scenario, with organization experts and surveys. Activities
including COVID 19 trends); and (d) subtract or add that were possible remotely but determined
job losses and gains from the 2030 employment not to be effective remotely included coaching,
baseline, and scale employment proportionally to counseling, and providing advice and feedback;
return to full employment. building customer and colleague relationships;
bringing new employees into a company;
Scenario C uses Scenario B as a baseline and negotiating and making critical decisions;
assumes that in a high-remote-work scenario, teaching and training; and work that benefits
the economic activity and employment from collaboration, such as innovation, problem-
75
solving, and creativity. For this report, remote work employment demand in those areas.
potential includes effective remote work potential
only. 5. Real estate modeling
4. Migration modeling The real estate model considers impacts from
employment and migration future-of-work models
The Massachusetts migration model considers to estimate demand going forward, by scenario.
three future-of-work factors to evaluate their Modeling was done across four property types.
impact on migration, using Donahue estimates
of population by Workforce Development Area for Residential:
2025 and 2030 as a baseline.
Residential real estate modeled to be driven
Donahue Estimates were done in 2018 using a by population growth forecasted in migration
component of change method based on trends model across scenarios. Occupancy rates were
observed in state- and town-level fertility and assumed to remain the same, and historical
mortality, regional gross migration-by-age trends relationship between population and housing
from ACS data, and 2015 launch populations. demand growth assumed to remain constant.
For more detailed information on the Donahue ACS housing stock and occupancy rate data was
methodology, please see Projections Methodology used to establish baselines. For sizing of potential
for Massachusetts Population Projections by additional housing stock needed, first national
Regional Planning Area. vacancy benchmarks were calculated using ACS
data: 6 percent rental vacancy rates, 1.5 percent
On top of the Donahue estimates, adjustments home-owner vacancy rates. Then the amount
were made for international migration disruptions, of additional stock needed to reach national
with an assumed ~15 percent decline from 2021- benchmarks in 2018, assuming no change in
2025 (70 percent decline in 2020) with a return density, was calculated (~35,000 units). Then, the
to pre-COVID-19 trends from 2025-2030 across all additional units needed until 2030 were calculated
scenarios. This was based on national monthly visa based on the population growth from the
statistics for decrease in monthly visa processing migration model, assuming constant occupancy
throughout 2020, as no state-level data was rates and density (an additional ~80,000 at current
available at that time. occupancy rate, and an additional ~85,000 if
maintaining national benchmark occupancy
In addition, remote work shifts were added to rates).
estimate the movement of those who choose to
work remotely. Assumed 0-7 percent141 of remote All commercial real estate modeling used CoStar
eligible workers choose to move, and that they stock data to establish benchmarks and historical
followed movement patterns seen in ADP data relationships between employment and square
from January 2021, 12-month average data. footage growth by asset class.
Finally, employment shifts were added to Industrial:
estimate movement to reflect evolving industry
composition across the state in 2025 and 2030. Industrial CRE real estate modeled to be correlated
The Massachusetts employment model and ACS with growth in manufacturing, warehousing,
commuter data were used to assume a proportion and transportation sectors employment across
of Massachusetts residents will move to fulfill scenarios. Historical relationship between
76
manufacturing, warehousing, and transportation buffer as not all centers can be optimally staffed
sector employment and square footage demand b) 30 percent buffer to center-based facilities as
growth assumed to remain constant. they are open ~52 hours per week143 and staff work
on average ~40 hours per week. Finally, the gap
Retail: in childcare workers was calculated by comparing
analysis above to current childcare workers based
Retail real estate sector modeled to be correlated on BLS59 and FCC estimates for 2020 by Workforce
with retail trade employment. Historical Development Area and for 0-5 age group.
relationship between retail employment and
retail square footage demand growth assumed to 7. Transportation ridership modeling
remain constant.
Transportation ridership was forecasted for 2025
Office: and 2030 for bus, subway, and commuter rail
ridership in five steps.
Office real estate modeled to be correlated with
employment of those sectors able to work from First, a base origin and destination model was
home across scenarios. Model uses growth of created. Using ACS data, pre-COVID-19 work trips
workers able to work from home effectively were established in 23 O&D pairs by mode. Then
(across all sectors), by scenario, as input. Historical leveraging assumptions on percentage of work
relationship between office employment and trips by mode, non-work trips were calculated
office square footage demand growth expected to by mode for each O&D pair. Second, the amount
remain constant. A reduction in two days in office of trips lost due to the growth of hybrid remote
space modeled to reduce demand by 15 percent in work was calculated based on estimates for
the long-term, while three-day reduction modeled commuters that can work remotely based on ACS
to reduce demand by 22 percent. data, and assumptions on days working remotely
established across the three scenarios. Third,
6. Childcare modeling the number of trips lost due to post-COVID-19
non-work trip trends were calculated based on a
Childcare modeling was done to estimate the decline in ridership due to a shift to e-commerce
potential childcare workforce shortage in the and a slow recovery of international tourism.
Commonwealth in 2025 and 2030. First, the total Fourth, the number of transit trips that shift to
number of children by age group (<15 months, non-auto modes were calculated, based on the
15-33 months, 33 months-5 years old, 6-13 years percentage of trips under 10 minutes by mode,
old), was sized based on Donahue Data estimates which were assumed to shift to micro-mobility
with adjustments made using the Future of Work options like walking or cycling. Finally, transit
migration model. Then, the percentage of those trips shifting to auto modes were calculated by
children who will need center or program-based assuming that a percentage of commuters with a
care was estimated (to account for those who vehicle available may shift to auto, based on their
remain home with a parent or other caregiver). annual wages and place of work. This shift was
Assumption used was 70-76 percent for ages 0-5, assumed to have 75 percent of the impact by 2025,
50 percent for ages 6-13 needing before/after- and 100 percent impact by 2030, and was adjusted
school care based on input from EEC. Staffing to account for parking capacity.
ratio standards142 were then applied to each
age group, to estimate the number of childcare All modelling was done based on a static
workers needed, adjust based on a) 5 percent system. That is, analysis was done based on the
77
trips and network that existed pre-COVID, and Polytechnic Institute
demographic, employment, work from home • Mark Nunnelly, Managing Director, Bain
and other trends were applied to those trips and Capital
network. This analysis did not assume changes • Niraj Shah, CEO & Co-Founder, Wayfair
to the transportation system (e.g., completion • Carolyn Stimpson, Owner, Wachusett Ski Area
of the Green Line Extension); and for simplicity • Kumblr R. Subbaswamy, Chancellor of the
the possibility of autonomous shared vehicles University of Massachusetts Amherst
beginning to impact transit and auto mode share
in 2030 was not modeled. The model does not
include the potential impact of any interventions
(for example more frequent service or reduction
or increase in fare revenues) that could further
increase or decrease ridership.
Advisory Council:
The Future of Work Advisory Council was an
informal network of leaders from different regions
in the Commonwealth across business, academia,
and public policy. The Advisory Council brought
together a wide range of backgrounds and
perspectives to help understand the challenges
and opportunities presented by the changing
nature of the economy especially in the wake
of disruptions from the COVID-19 pandemic
and validate the insights. The Council members
included:
• Aaron Ain, CEO, Ultimate Kronos Group
• Joe Bahena, Senior Vice President, Joseph
Abboud Mfg. Group
• Camilo Cabos, Vice President, Human
Resources, Thermofisher Scientific
• Patricia Canavan, President, United Personnel
Services (Recruitment)
• Kevin Churchwell, M.D., EVP Health Affairs/
COO, Boston Children’s Hospital
• Roger Crandall, Chairman, President andChief
Executive Officer, MassMutual
• Warren Fields, President & CEO, Pyramid Hotel
Group
• Bill Grant, CFO, Cummings Properties
• Michael Lauf, President & CEO, Cape Cod
Healthcare
• Laurie Leshin, President, Worcester
78
EXECUTIVE SUMMARY TOP EIGHT INSIGNTS FOR THE COMMONWEALTH
1 Mass.gov, “Housing and Economic Development: Key 21 McKinsey & Company, “What executives are saying about
Industries,” Retrieved April 21, 2015 the future of hybrid work”, May 2021
2 “State Personal Income 2008” (PDF). Bureau of Economic 22 McKinsey & Company, “What employees are saying about
Analysis. Archived from the original (PDF) on April 12, 2010. the future of remote work”, April 2021
Retrieved June 8
23 According to the Census Household Pulse Survey, only D.C.
3 U.S. News, “Business Environment Rankings,” 2020 and Maryland had higher percentages, at 55 percent and 41
percent respectively
4 Bloomberg, “California, Massachusetts, Rank as Most
Innovative States,” June 2020 24 Based on the McKinsey Global Institute Analysis of
Occupational Information Network (O*NET) to analyze
5 WalletHub, “Overall Tax Burden by State,” Mar 2021 more than 2,000 activities in more than 800 occupations
and identify which activities and occupations have the
6 In 2018, Massachusetts’s overall educational system was greatest potential for remote/hybrid work
ranked the top among all fifty U.S. states by U.S. News &
World Report 25 According to a Harvard Business School Online survey, 81
percent of those surveyed either do not want to go back to
7 Secretary of the Commonwealth: “Welcome to the office or would prefer a hybrid schedule going forward;
Massachusetts: A Primer on Bay Area Statistics,” Feb 2021 additionally, the Massachusetts Resident Survey found that
respondents who had worked remotely at least one day
8 LMI, “Labor Force and Unemployment Data,” 2020 during the pandemic expected to work on average 2.5 days
remotely over the next 12 months.
9 Opportunity Insights Economic Tracker, “Percent Change
in Small Business Revenue”, 2021 26 CoStar data for office rent in Boston area
10 The Future of Work Advisory Council was an informal 27 MA Business Survey, n=223, includes businesses of all sizes
network of leaders from different regions in the and industries throughout the Commonwealth
Commonwealth across business, academia, and public
policy. The Advisory Council brought together a wide range 28 Womply data; Track the Recovery
of backgrounds and perspectives to help understand
the challenges and opportunities presented by the 29 Based on American Community Survey five-year estimates
changing nature of the economy especially in the wake of for 2018
disruptions from the COVID-19 pandemic and validate the
insights. Names of members in Appendix 30 MBR, “Future of Work and Massachusetts
Competitiveness,” March 2021
11 Based on analysis of 2019 American Commuter Survey
31 McKinsey & Company, “For mothers in the workplace, a
12 Massport, “2019 Air Passenger Survey Final Report,” 2019 year (and counting) like no other”, May 2021
13 Oxford Economics arrivals data, 2019 32 McKinsey & Company, “COVID-19 and gender inequality:
Countering the regressive effects”, July 2020
14 Calculated as average unemployment rate in 2019
33 Economic Policy Institute, “The cost of childcare in
15 MA LMI Data used for overall unemployment numbers, BLS Massachusetts,” October 2020; Care.com “The New
CPS Microdata (IPUMS) used for demographic breakdowns America Care Report”, Sep 2016
due to data availability
34 Care.com “The New America Care Report”, Sep 2016
16 Analysis of Current Population Survey data, Mar 2021
35 Economic Policy Institute, “The cost of childcare in
17 McKinsey & Company, “Achieving an inclusive US economic Massachusetts,” October 2020
recovery,” Feb 2021
36 Based on modeling of 0-5 childcare population and
18 EMSI data, 2019 demand and EEC staffing ratios, Donahue Institute
(University of Massachusetts), BLS data, Bipartisan Policy
19 U.S. News, “Affordability Rankings”, 2020 Center (2019); U.S. Census Bureau (2011); EEC Emergency
Childcare; Workforce Ratios
20 CNBC, “How much childcare costs in every state in
America,” 2018 37 Massachusetts Future of Work business survey, “Childcare
support: Check ‘yes’ if you had any of the following benefits
79
pre-COVID or if you are anticipating offering them to some 56 Massachusetts Business Survey from April 2021, n=223
or all employees in the future,” n=223
57 Future of Work Memo, Massport, March 2021
38 CPS
58 In a global survey of 800 senior executives in July 2020,
39 Massachusetts Future of Work residents survey: “If you two thirds of respondents said they were stepping
were able to access additional childcare, how might you up investment in automation and AI “somewhat” or
change your daily routine? (Please select all that apply.),” “significantly,” according to a McKinsey Global Institute
April 2021, n=173 analysis, “The Future of Work after COVID-19,” February
2021. In a Massachusetts Future of Work business survey,
40 NTD unlinked passenger trips (UPT) data comparing Jan. 52 percent of participants responded that they expected
2021 to Dec. 2019 to invest more in automation than they had previously, or
they had already invested heavily in it.
41 2019 NTD Metrics data
59 https://www.mckinsey.com/about-us/covid-response-
42 Euromonitor projections for e-commerce as a percent of center/inclusive-economy/unlocking-experience-based-
retail spend job-progressions-for-millions-of-workers
43 2019 NTD UPT data 60 Boston Business Journal, “Chesloff op-ed: Talent remains
the core of the future of work,” June 2021
44 2017 National Household Travel Survey
61 BLS Occupational Handbook, Healthcare Occupations, May
45 Time, “COVID-19 has been apocalyptic for public transit. 2021
Will congress offer more help?” July 2020
62 New York Times, “5 Healthcare Jobs on the Rise,” April 2021
46 Euromonitor International Retailing 2021 Edition
63 McKinsey & Company, “The Essential of Healthcare
47 TNMT, “Industry experts weigh in on the future of business Innovation,” May 2021, “Transforming healthcare with AI,
travel,” March 2021; ESRI, “Massive Drop in Business Travel the impact on the workforce and organizations,” March
could be Permanent,” December 2021; McKinsey, “For 2020
corporate travel, a long recovery ahead,” August 2020
64 US News Business Environment rankings for 2021
48 2019 Logan Air Passenger Ground Access Survey
65 Boston Real Estate Times, “Boston Office Market Shows
49 2019 Oxford Economics data, including overnight arrivals Signs of Optimism, While Lab Demand Intensifies: CBRE”,
passengers April 2020
50 Airlines for America revenue data, A4A represents Alaska 66 McKinsey & Company, “Jobs lost, jobs gained: What the
Airlines, American Airlines, Delta Airlines, Hawaiian Airlines, Future of Work will mean for jobs, skills, and wages,” Nov.
JetBlue, Southwest and United (+ cargo airlines) 2017
51 Massport Future of Work report March 2021 67 Adjustments of UMass Donahue Population Estimates
based on US monthly immigrant visa issuance statistics,
52 DB1B analysis of relative fare by percentile nuary 2021 compared to January 2020
53 McKinsey, “Back to the future? Airline sector poised for 68 A 7,371 increase in domestic emigration was observed
change post-COVID-19,” April 2021; Deloitte, “Aviation’s in USPS flow data (April 20-March 21) compared to the
recovery flight plan,” 2020 previous year. A 1,120 increase in emigration was observed
54 Articles and interviews from industry experts cite the 69 Assuming a 64 percent decrease in 2019 net non-citizen
need to re-evaluate and redesign networks, with airlines immigration (National immigration visas decreased by
retreating to most profitable hubs; Airways Magazine, 64 percent in 2020, according to monthly visa issuance
“The future of air travel in the age of COVID-19, Route statistics.)
networks, hubs, scheduling, and connectivity,” July 2020;
Transportation Research Interdisciplinary Perspectives, 70 Analysis of ADP data from January 2021 and January 2020
“The impact of COVID-19 on domestic U.S. air travel in Massachusetts
operations and commercial airport service,” March 2021
71 Analysis of ADP data from January 2021 and January 2020
55 BLS Massachusetts employment data for Leisure and in Massachusetts
Hospitality Sector and overall
72 Pew national research survey, “As the pandemic persisted,
80
financial pressures became a bigger factor in why 91 Assuming 23 million travelers to Boston, 37 percent of
Americans decided to move,” June and November 2020 whom are business travelers, with three-day average
length of stay and up to 30 percent decrease, Massport
73 Defined as those with over $100,000 in salary, from ADP 2019 survey data
data from January 2021 and January 2020
92 USPS change of address data, ADP migration data, US
74 Massachusetts Future of Work resident survey, April 2021, immigration visa data
n=522
93 Pew Research Center, “As the pandemic persisted, financial
75 CPS, BLS OES pressures became a bigger factor in why Americans
decided to move”, Feb 2021
76 Release of COVID-19 impact scenarios developed
by McKinsey in partnership with Oxford Economics, 94 April 2021 MA Resident Survey, n=223
November 2020
95 2020 CoStar data
77 Calculated as average unemployment rate in 2019
96 Boston Globe, “Boston’s in a lab-building boom. What will
78 MA LMI Data used for overall unemployment numbers, BLS that mean for the city and its neighborhoods?”, Feb 2021
CPS Microdata (IPUMS) used for demographic breakdowns
due to data availability 97 Boston Real Estate Times observed slight decrease in
office space rents in 2020, Boston Real Estate Times,
79 2019 EMSI data “Boston office market showing signs of optimism while lab
demand intensifies”, April 2021
80 BLS Jobs Flexibilities and Work Schedules – 2017-2018, Data
from American Time Use Survey, September 2019 98 Womply data
81 ACS 2019 99 Track the Recovery
82 Freddie Mac, “Housing Supply: A growing deficit,” May 2021, 100 Euromonitor estimates for retail spending by mode 2024
Freddie Mac, “The Housing Supply Shortage: State of the and 2030
States,” Feb 2020,
101 Amazon press release
83 Boston Indicators, “Development Opportunities,
Community Risks: How the Pandemic Has Created a New 102 Apple press release
Balancing Act for Gateway Cities,” February 2021
103 Massachusetts Business Roundtable, “Future of Work and
84 Wall Street Journal, “Remote work could spark housing MA Competitiveness”, May 2021
boom in suburbs, smaller cities,” May 2020
104 ACS 2019 wage and foreign-born data
85 Apartment List
105 MA LMI employment data by industry
86 UMass Donahue population projections, adjusted for
reduced international immigration and increased domestic 106 MGH, Food for Families, ACS 2019 educational attainment,
emigration post-COVID-19 Bipartisan Policy Center, Child Care Gaps Assessment
87 Costar data, ACS housing occupancy and housing stock 107 Boston Indicators, “Across Two Waves: COVID-19 Disparities
data, assumes constant occupancy and housing density in Massachusetts,” December 2020
88 Additional housing needed to maintain national average to 108 Boston Indicators, “Development Opportunities,
best in class benchmark occupancy rate: 6-9 percent rental Community Risks: How the Pandemic Has Created a New
vacancy rates, 1.5-2.0 percent home-owner vacancy rates, Balancing Act for Gateway Cities,” February 2021
ACS housing occupancy and stock data
109 McKinsey, “Understanding how American workers progress
REGIONAL IMPLICATIONS to higher-wage jobs”
89 American Community Survey 2019 commuter data 110 US Census data
90 US Department of Labor; O*NET OnLine; McKinsey Global 111 MassINC, “About the Gateway Cities”, 2021
Institute analysis, “What’s next for remote work: An analysis
of 2,000 tasks, 800 jobs, and nine countries”; November 112 LMI employment data, US census population data
2020
113 Foreman, Benjamin; “Rebuilding Gateway Cities is Key to
81
State’s Economic Future” 139 Zillow Home Value Index from February 2019 to February
2021
114 MassINC, “Are coworking spaces the key to transforming
Gateway Cities?,” Dec. 2020 GOING FORWARD
115 MassLive, “MassMutual CEO Roger Crandall talks returning 140 Mass.gov, “Weekly COVID-19 Vaccination Report – May 6,
to the office,” April 2021 2021,” May 2021
116 12% increase seen in Fall River, 5% in Springfield, 3% in New APPENDIX AND METHODOLOGY
Bedford between Q4 2020 and Q4 2019, CoStar
141 Based on national surveys, as no additional intention
117 14% increase in Salem, 24% increase in Worcester and to move was seen in Massachusetts surveys, range is
Springfield between February 2021 and February 2019, based on scenarios. Later in May after the modeling was
Zillow Home Value Index complete, Zillow released an additional survey in which as
many as two thirds of respondents would consider moving
118 Net change in 2020 versus 2019 migration, -.7% in Holyoke, if they could continue working from home; however, USPS
-.1% in Springfield, increase by 4.3% in Barnstable from and ADP data does not yet indicate movement at this
USPS change of address data scale.
119 Mass Inc, “Are coworking spaces the key to transforming 142 Using EEC provided staffing ratios
Gateway Cities?,” December 2020
143 Based on random sampling of EEC facilities hours from
120 MassTech LEAD site
121 CoStar data Q4 2020 144 Used childcare workers, 15 percent of teaching assistants,
86 percent of pre-school teachers, 86 percent of
122 Boston Globe, “Developer teams up with manufacturer to administrators of pre-school and day-care based on BLS
produce millions of N95 masks,” March 2021 childcare industry occupation estimates
123 Boston Herald, “Fall River apparel company shifts to
hospital gowns in fight against coronavirus,” May 2020,
Merrow Manufacturing website
124 2019 EMSI data
125 Massachusetts Department of Unemployment Assistance
126 Massachusetts Department of Unemployment Assistance
127 USPS change of address data
128 Zillow Home Value Index from 2/19 to 2/21
129 US Census data, LMI employment data by municipality
130 LMI employment data by industry and municipality
131 Massachusetts Department of Unemployment Assistance
132 Zillow Home Value Index from 2/19 to 2/21
133 ADP payroll data
134 US Census data, LMI employment data by municipality
135 LMI unemployment data by municipality
136 Massachusetts Department of Unemployment Assistance
137 US Census data
138 US Census data
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