BOSTON - A recently published report from the Massachusetts Tax-payers' Foundation maintains that the state's economy has lost ground to other states because of unfriendly business conditions and high cost of living.
The report, released yesterday, said that because of these factors, many manufacturing jobs have been driven out of the state permanently.
The report was commissioned by the taxpayers group and written by the Amherst School of Business at the University of Massachusetts. From 1984 through 1992, the state lost jobs in 21 industries targeted as necessary to growth, the report said.
The shrinking industries, including biotechnology, medical supplies, financial services, toy manufacturing, and computer software, were identified as necessary for the state's economy to expand in the next 10 years.
"My reading of the report is that the state's future economic growth is not guaranteed," said University of Massachusetts' President Michael K. Hooker. "It is more urgent than ever that we move forward on a proactive economic development agenda for the commonwealth."
In 1984, 6% of employment in the state was in the 21 targeted industries, the report said. By the end of 1992, the figure dropped to 4.9% of total state employment.
The industries an money are there, the report said, but the state must be made a more accessible place to do business.
"The state is well-positioned for growth potential," said Michael Widmer, president of the taxpayers foundation. "But on the whole, over the past 10 years we have lost jobs in most of these industries."
Widmer said that environmental regulations and the cost of doing business in the state, which often go hand in hand, are among the most serious concerns of state business leaders.
"People are not saying that the regulations themselves are that bad," Widmer said. "Actually, it is the paperwork and procedures that are required to comply that is the real problem."
Widmer said that within the last two years of Gov. William F. Weld's Administration, some progress has been made. "But the problem is a moving target, and we might not be moving fast enough," he said.
When Weld was elected in November 1990, the state was at one of its lowest economic points since before World War II.
"The bulk of this material was obtained from the depths of the recession," said Virginia Buckingham, a member of the governor's press office. "Essentially we agree with the report."
The bad times were particularly evident in the state's credit rating. When Weld took office, the state was rated Baa by Moody's Investors Service, BBB-plus by Standard & Poor's Corp., and single-A by Fitch Investors Service.
Since then, however, the state's rating has climbed to A-plus by Standard & Poor's and Fitch and single-A from Moody's.
Additionally, the state's unemployment rate has decreased from a peak of more than 10% in 1991 to 6.1% in April, below the national level of 6.4%.
Critics of the governor have said that the employment numbers in the state are misleading because so many of the unemployed have either moved out of Massachusetts or have stopped looking for work.
"One of the problems right now in the state in that we just are not competitive enough," said Rep. Mark Roosevelt, D-Boston. "Business leaders that are interested in expanding say that states like Iowa, North Carolina, and Rhode Island are very aggressively trying to stimulate new business and the last state that seems interested is Massachusetts."
Roosevelt, who is expected to be the Democratic challenger to Weld during this fall's gubernatorial election, said that outside of the Boston metropolitan area, the economic recovery has not developed.
"People outside the city laugh at you when you mention the recovery," he said. "But also, the main problem in the state is not unemployment but under-employment."
Buckingham said that more than 80,000 new jobs have been created under Weld - higher than the national average.
But Roosevelt said that figure was misleading.
"Many workers have moved from jobs with large companies in the state to lower-paying jobs without benefits," he said. "A friend of mine that was once an automobile engineer in Framingham has now been forced to get three low paying jobs - including a fruit-picking job for the summer - to make ends meet."
