Experts: Labor crunch threatens state’s growth

With an aging workforce and a low unemployment rate, Massachusetts faces a tight labor market, creating a dynamic that could limit the state’s future economic growth. That was one of the main messages economists delivered to lawmakers on Wednesday, at an annual Ways and Means Committee hearing that launches the state budget-writing process. Economists who testified projected a slower revenue growth rate than in the past two years, offering estimates that ranged from 0.8 percent to 3.5 percent.

Revenue Commissioner Christopher Harding characterized the Massachusetts unemployment rate as “impressively low,” forecasting a rate of 2.8 percent this fiscal year, and said that job growth may come at a slower pace than it has in the past.

“This could drive up wages, this could do all kinds of things that have a direct impact on business here in the commonwealth, because there’s a limited talent pool in order to achieve the growth these businesses want to achieve,” Harding said, after Sen. Cindy Friedman asked if there was any cause for concern with such a low unemployment rate.

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