Dubious distinction worries Massachusetts

The first settlers to the Massachusetts Bay Colony were fleeing religious persecution. Another great wave of immigration came after the potato famine of the 19th century prompted tens of thousands to immigrate from Ireland. After that, through the 1950s, it was jobs - manufacturing everything from shoes to machinery - that lured laborers here from all over the world.

Now, it seems, the Bay State has lost some of its old allure. According to the latest census estimates, Massachusetts was the only state in the country to lose population from July 2003 to July 2004.

To be sure, the net decline was small, at just over 3,800 residents. Some say an undercount of the state's student body could mean there was no slip at all. Still, the numbers follow decades of slow population growth in Massachusetts - whose population has risen just 1.1 percent since 2000 as states in the South and West have boomed.

Experts say the state's weak job market and high housing prices are to blame. And while the loss does not represent a radical shift, some experts worry about long-term effects on the tax base - especially since many of those leaving are believed to be middle class - if the trend does not turn around.

The state has plenty to recommend it - from a world-class symphony to the scenery of Cape Cod and the Berkshire Mountains. In Boston, once dubbed the "Athens of America," there is plenty of opportunity to draw residents, says Steve Coelen, former director of the Massachusetts Institute for Social and Economic Research. Harvard University, the Massachusetts Institute of Technology, and about 60 other institutions educate thousands each year on the latest professional advances. But many grads, faced with limited access to jobs that can pay local rents, eventually leave. "We keep them here until a certain point," Dr. Coelen says. "Then they go other places with the technology."

Massachusetts was among the hardest hit in the nation during the last recession, losing some 200,000 jobs between 2001 and 2003. It has only regained a fraction of that - 23,000 - since.

Gov. Mitt Romney (R) has underlined job creation as a main priority of his administration. Joseph Donovan, director of communications in the state's Executive Office of Economic Development, says the administration has set up grants for job training and set aside resources to help the unemployed find jobs. "The administration is very optimistic it will continue to see job creation and a stronger economy in 2005," he says, as "we continue to break down barriers that hinder economic growth and job creation."

The jobless rate, he notes, is down from 5.6 percent in January to 4.6 percent today, but experts worry that a population decline could deter companies from establishing businesses here in the future.

"We are not a cheap place to do business. There are no natural resources, there is the [cold] climate," says Robert Nakosteen, economist at the University of Massachusetts at Amherst. "The only things that attract businesses are the educational opportunities and the workforce. ...We are losing true magnets that get businesses to come here and stay."

Officials have expressed concern about a 5 percent drop-off in foreign student enrollments too, attributed in part to tighter visa policies since Sept. 11.

The cost of living here is one reason that students - and many others - may opt to study, work, and live elsewhere. The median home sale price in Massachusetts has jumped about 15 percent in the past year - to $345,950 this November from $302,000 12 months before, according to the Massachusetts Association of Realtors. This week, Governor Romney announced the creation and preservation of 564 new rental homes throughout the state, mainly for people of low and moderate incomes.

The census data do not specify who is moving from the state and to where they are moving. Much of the movement is typical of patterns in the rest of the country: seniors retiring to warmer climates, residents relocating for jobs.

Gary Rogers, a certified residential specialist who sells homes in greater Boston, says he sees a little bit of everything: young families moving into homes sold by retirees moving south, couples selling suburban homes to move back to the city. "The good news is, I've seen a slight rise in people taking jobs in the area."

Of the 10 fastest-growing states in the most recent census data, five are in the West, and five in the South. But many here have also opted for other New England states, especially lower-tax New Hampshire, the region's fastest growing state.

Indeed, Ian Bowles of MassINC, a local think tank, says it's the middle class that is relocating to other parts of New England. While workers from all over the country still relocate to Boston and beyond for high-paying jobs in finance, medicine, and biotechnology, middle-class workers are opting for cheaper areas.

"We will always be a high cost-of-living state," says Mr. Bowles. He says policymakers and others should focus on the state's native workforce - those who were born here and have family ties - since they are the ones who "will stay in the state through thick and thin."