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Massachusetts is 1 of 4 states that lost private-sector jobs over the last five years
Economists say the losses can ripple through the state’s economy, leading to fewer job opportunities, lower tax revenue, and less consumer spending.
Massachusetts’ job market is flashing warning signs, with the clearest one coming from the private employment sector.
Federal data analyzed by the Pioneer Institute shows Massachusetts is one of only four states, plus the District of Columbia, that have fewer private-sector jobs today than before the pandemic.
As of March 2025, the state’s private workforce was 0.74% smaller than in January 2020, losing about 24,000 private-sector jobs in that time. Only Vermont, Hawaii, and D.C. saw bigger drops.
That decline, said Aidan Enright, an economic research associate at the Pioneer Institute, carries real consequences: stagnant private-sector growth threatens to erode Massachusetts’ competitive advantages and weaken its long-term economic resilience.
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“It’s an indicator of economic health and the direction of the state,” said Enright. “If you’re growing private sector jobs, if GDP is growing at a rate in Massachusetts higher than the country, then you know that means there’s more opportunity for people.”
Businesses want to attract people in, have a pool of workers to choose from, and feel they can expand, he continued.
But all of the indicators are pointing in the opposite direction.
The state’s GDP has trailed behind the national average since 2022. Private sector employment is down. And every year, tens of thousands of people are leaving the state, which Enright said will only get worse when immigration rates fall.
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“If you don’t have a competitive economy, if costs are too high, if the state is moving in the wrong direction — it can have a real impact on everyday people,” Enright said.
Where are the private sector jobs going?
The institute found in a newly released report that, from 2020 to 2024, Massachusetts lost ground in some of its strongest industries.
The state’s share of the national economy in professional, scientific, and technical services — a key part of the high-skill job market — dropped by 6.6%. At the same time, states like Texas, Florida, and North Carolina expanded their share.
Overall, the state’s private-industry economy grew slowly. Its GDP per capita rose just 11.9% over four years, ranking 30th in the country and well behind states like Florida, Texas, and New Hampshire.
Businesses are following too. Florida gained the highest net share of firms in 2023, followed by Texas, Tennessee, and the Carolinas.
The loss of private-sector jobs, tied to the number of businesses opening or closing, is part of the reason people are leaving the state, Enright said.
“It’s not necessarily that people can’t find a job,” said Enright. “There are jobs available and many of them are high-paying, but that opportunity has grown a lot stronger elsewhere.”
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Plus, combine the fewer jobs available with the high housing and living costs, Enright said, and other states might look a lot more attractive to people looking to relocate.
What is causing the slowdown in hiring?
Economic uncertainty, Enright said, is leading to a hiring slowdown. The life sciences are feeling the downstream effects of federal funding cuts, compounded by high interest rates that make borrowing expensive.
Although roles since the pandemic have shifted, mostly toward a surge in the life sciences industry, jobs like biochemists, bioengineers, and biological technicians all peaked in 2022 and have since declined by 3%.
In addition, many office and customer-facing jobs are shrinking, and they begin to see the effects of AI and other automation tools.
There has also been a slowdown in job growth in the information sector, which includes software firms, telecommunications, and data processing, as well as in manufacturing, including pharmaceutical companies and food plants.
Enright said that for people early in their careers, moving to a more affordable state can make a lot of sense, especially if “your dollars stretch farther. You can save. You can plan to buy a home and raise a family and still have money left over, rather than staying here and not necessarily have those opportunities.”
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