Massachusetts' job market is teetering on the edge, but one sector is keeping it afloat: healthcare. Without healthcare jobs, the state would have lost over 20,000 positions, a staggering one in five of the jobs added in the previous two years.
But here's where it gets controversial... Massachusetts is experiencing a unique phenomenon, a so-called "jobless expansion." Despite a growing economy, hiring has dried up in many sectors. This disconnect has happened before, but this time, it's different. The economy has been expanding since 2020, yet employers are hesitant to hire, citing various reasons like trade policies, AI's impact, and low consumer confidence.
Massachusetts is among the first states to face this dichotomy, a weak job market amidst healthy economic growth. It's a situation the country hasn't seen since World War II.
The US added a meager 181,000 jobs last year, and without healthcare and social assistance roles, employment would have declined by over half a million. Massachusetts has long benefited from a mix of high-paying jobs in healthcare, higher education, professional services, and finance. But over the past two years, these sectors, excluding healthcare, have seen little to no employment growth.
The professional services sector lost 8,000 jobs, mostly among scientific and technical workers. Private education shrank, and hiring in colleges and universities slowed. Financial activities remained unchanged.
Healthcare and social assistance were the state's biggest job generators. The health sector added 15,600 jobs in 2024-2025, mostly in patient care, accounting for 17.6% of all Massachusetts employment, nearly 3% above the national average.
And this is the part most people miss... The jobless expansion is likely to continue, with healthcare being the exception due to the growing needs of the aging population. However, the state's reliance on this single sector is not sustainable. Healthcare employment is historically recession-resistant, but it's vulnerable to policy changes. Proposed cuts to Medicaid and federal health spending could slow hiring.
The deeper concern is what this concentration reveals about the rest of the economy. Employers are hesitant to hire, and the state's unemployment rate has risen to 4.8% from 4.1% a year ago. This hesitation is due to various factors, including cyclical downturns in tech, pharma, and biotech industries, shifting trade policies, and the rapid advancement of AI.
Economist Alan Clayton-Matthews warns that Massachusetts is losing momentum, and the shifting economic landscape is affecting consumers and businesses. He predicts stiff headwinds due to President Trump's immigration restrictions and mass deportations, combined with an aging population, which could shrink the labor force.
The "Massachusetts Miracle" of the 1980s is a distant memory. Now, the state is struggling to stay afloat. At some point, we'll need more than just one sector to carry us forward. It's time to diversify and find new engines of growth to ensure a healthy and resilient job market.
