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Quarter of Mass. Workers Could Be Displaced Post-Pandemic

Gov. Charlie Baker’s future of work study suggests that as many as 25 percent of workers could potentially be displaced over the next decade as remote work, e-commerce and automation increase.

(TNS) — Massachusetts’ post-pandemic economy will likely pave the way for permanent remote work, higher demand for e-commerce and more automation, potentially displacing about 25 percent of workers over the next decade, Gov. Charlie Baker’s future of work study suggests.

The Baker administration’s report, conducted by McKinsey & Co., published Tuesday morning after months of speculation over the private contractor’s findings.

After dozens of data analyses and more than 200 business surveys, the team suggests Massachusetts could see a move away from its “urban core” fueled by remote work and technological shifts. But the changing economy could spark a mass exodus of residents seeking lower costs of living and disproportionally hurt nonwhite, women and lower-income workers if they don’t get the proper skills training, affordable homes and more accessible child care.

“After COVID forced an economic slowdown last year, Massachusetts’ recovery at this point is clearly off and running,” Baker said during a news conference Tuesday morning. “We have a strong economy that’s grounded by key assets like our world-class health care system or nation-leading K-12 and higher education systems and vibrant sectors with incredible startups like the biotech and life science companies that are represented by this organization today.”

“In short,” he added, “we believe Massachusetts is well-positioned as we emerge from the pandemic to promote economic growth and recovery going forward.”

The study analyzes how remote work, business travel and e-commerce trends will affect the state economy and workforce by 2024, the short-term outlook, and 2030.

What could remote work look like? Two or three days working outside of the office and about a 15 percent reduction in office space over time, the report suggests.

Business travel could fall to 75 percent of pre-COVID travel in two years before getting back to pre-pandemic levels in the following years.

The report suggests 32 percent of workers in the state could work remotely one to three days a week, not only affecting how much office space is needed, but also where housing, childcare and other resources should exist.

That doesn’t mean the state would prioritize regional transit. In fact, the report suggests transit ridership, particularly on the Commuter Rail, would decline as people work from home in lieu of commuting daily. The report makes no mention of regional transit options beyond the Commuter Rail’s coverage area, nor does it mention the potential impact of a west-east rail option.
As the state economy and workforce change shape, the state might see a slower rate of population growth. The report cites less international immigration due to the pandemic and migration out of the state due to its high cost of living.

If remote work becomes more permanent, the study suggests 139 jobs could become more automated following the COVID-19 pandemic as e-commerce becomes more common, the study suggests. That could affect more than 300,000 workers in Massachusetts. Women, people of color and working-class residents likely will struggle more as automation and digital innovations rock the workforce.

Already, nonwhite workers have suffered more during the pandemic. While the overall unemployment rate is 6.4 percent, the rate for Black workers is 13 percentage points higher than the rate for other groups. Women are expected to get back to work on average 18 months or more later than men. Workers with lower education levels are also expected to see a slower job recovery.

One of the hardest-hit areas of the economy has been the hospitality and food services sector. In Massachusetts, the sector lost about 100,000 jobs as of March.

The future of work report recommends skills training for workers who might become displaced — a concept Baker and Democratic House Speaker Ron Mariano have promoted in recent months.

The report specifically recommended skills training to boost the rural economy. Western and Central Massachusetts communities, particularly those with under 2,500 people, account for 1.3 percent of the state’s total population and less than 1 percent of state employment, according to the report. Unemployment ranges widely from 2.1 percent in Leyden to 9.2 percent in Becket.

Rural residents are twice as likely as those in other parts of the state to work in construction or hospitality and food services, representing 18.3 percent and 17.3 percent of employment respectively. Another 14 percent of people work in health care. The report suggests this region could see the lowest employment growth over the next decade.

“Reskilling could play a critical role in developing these economies as workforce needs evolve, particularly given the disproportionate concentration of low-growth sectors that carry greater risk of worker displacement,” the report states.

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