Thoughts from the President & CEO

State Economic Plan Sets Measurable Objectives - December 18, 2023

The Healey-Driscoll Administration’s new economic development plan includes something unusual for planning documents of this type – measurable objectives.

Team Massachusetts: Leading Future Generations, released last week, addresses the bedrock issues that will determine the future of the Massachusetts economy – housing, transportation, talent retention/acquisition, and the need to support the industries in which the commonwealth holds a competitive advantage. It was an honor for me to represent the 3,400 members of Associated Industries of Massachusetts on the Economic Development Planning Council that produced the report.

Massachusetts law requires every gubernatorial administration to develop and publish a roadmap for the ways in which state government plans to support the private sector in fostering jobs and economic growth. The new report not only identifies the priorities for building the Massachusetts economy – fundamentals (including housing and transportation); talent retention; and support for individual industry sectors – but also details how we will know whether these initiatives have been effective.

The objectives include:

  • Massachusetts is one of the highest GDP per capita states and we grow GDP faster than the national average.
  • All regions rise with the rising tide: Economic growth happens across all regions and GDP per capita rises in every region.
  • Our overall population starts to increase and returns to pre-pandemic growth trends.
  • More talent stays here. For example, we see an increase in the percent of high school and college graduates who stay in Massachusetts.
  • More companies start and expand here.
  • We create more opportunities for all of our talent: Income inequality gap closes, especially across race, gender, and educational backgrounds.
  • Workforce participation increases and we start to see more people entering the job market.
  • We grow in a way that is consistent with protecting our climate: We achieve climate targets.
  • Our state ranks as one of the most competitive in terms of friendliness to families and businesses.

Those of us who work in the private sector understand that a business plan is nothing without performance objectives. Governor Maura Healey, Secretary of Economic Development Yvonne Hao, and my colleagues on the Economic Development Planning Council deserve credit for understanding that an economic blueprint works the same way.

I urge AIM members to read the plan, which includes a range of initiatives from the formation of a “Competitiveness Cabinet” to the creation of a statewide internship program.

Across all these initiatives is a consistent theme: We need to make it easier for businesses and individuals to thrive. AIM couldn’t agree more.

Verizon Grant Launches AIM Digital Inclusion Initiative - December 4, 2023

Associated Industries of Massachusetts has long maintained that Massachusetts will enjoy a vibrant economy only when it ensures that every business in the commonwealth has access to the resources they need to compete and share in the economic prosperity of the state.

That’s why we are thrilled to announce that AIM has won a $100,000 award from Verizon to establish a Digital Inclusion Initiative (DI2) that will help historically disadvantaged small and medium-sized businesses succeed in an increasingly digital world.  The award is part of the Verizon Forward Community Enhancement Award, a $1 million national initiative.The AIM DI2 Initiative is designed to bridge the digital divide in business by empowering enterprises owned by Black, Indigenous People of Color (BIPOC), women, LGBTQ+, disabled people, and veterans to access resources, workforce training, and business-to-business connections. The initiative will include multiple in-person events in 2024 that will connect businesses with digital solutions and highlight AIM’s partnership with Verizon.

AIM will deploy its statewide reach, trusted partnerships, HR Solutions skills training, and communications platforms to develop economic opportunities that enable small and medium-sized businesses to grow across Massachusetts.

Details of DI2 initiative include:Quarterly In-Person Event Series

  • Digital Inclusion Opportunities for businesses in geographically diverse areas of the state.
  • Leveraging Verizon Small Business Digital Ready.
  • Practical Tech Tools to Help Diverse Businesses Succeed.
  • Cyber Security Awareness and Best Practices.

Increase Economic and Educational Opportunities for Small Businesses & Workers

  • Develop and Distribute Cyber Security Tool Kit
  • Provide Digital Skills Training
  • Provide Visibility for Small Businesses at AIM Events

Verizon’s partnerships are part of the company’s goal to support one million small businesses to succeed in the digital economy by 2030. Through its free platform Small Business Digital Ready (SBDR), Verizon fosters inclusive growth across the country including reaching more than 56,000 business owners in 2023. To learn more about Verizon’s Digital Inclusion efforts, visit CitizenVerizon.com.

The DI2 Initiative represents the most recent step that AIM has taken to address a persistent wealth gap under which Black and Latino people now make up more than a fifth of the Massachusetts population but own just more than 3 percent of businesses with employees — less than half the national rate of Black and Latino business ownership, according to a U.S. Census survey of entrepreneurs released in 2018.

AIM in 2021 established “AIM Business Connect” to advance supplier diversity throughout businesses in the commonwealth by connecting its members with potential suppliers operated by people of color. AIM has subsequently established a partnership with the Boston Impact Initiative and also provides services through the City of Boston’s Space Grant program to help small businesses move into vacant storefronts.

Massachusetts is moving toward a stronger, more inclusive economic future and Associated Industries of Massachusetts is proud to work with others to make that future a reality. We are deeply grateful to Verizon for its longtime support of AIM and its role as a leader in the business community.

Please contact Chris Kealey, Chief Operating Officer, at ckealey@aimnet.org, if your company would like to be part of the Digital Inclusion Initiative.

Progress for Business in 2023 Legislative Year - November 20, 2023

The Massachusetts Legislature wrapped up the first year of its two-year session on Wednesday having passed a signature tax-relief law and affirming its support for a compromise wage-equity bill that will help employers compete to attract talent.

While the headlines around the end of deliberations for 2023 revolved around Beacon Hill’s inability to agree on a $2.8 billion spending bill that included a $250 million infusion for the emergency shelter system, the first year of the 193rd session included some real progress for the business community.

Start with the tax-relief measure signed by Governor Maura Healey on October 4. The law, supported by AIM, reduced the short-term capital gains rate from 12 percent to 8.5 percent and doubled the threshold for the estate tax to $2 million. It also broadened the application of the Single-Sales Factor, shifting from a three-factor apportionment system based on the business’s share of sales, payroll, and property to apportionment based solely on sales.

The new tax law represents a positive first step, but we understand that the business community and elected officials still have work to do to ensure that Massachusetts maintains a business climate that persuades both companies and talented workers to remain in the Commonwealth.

The Francis Perkins Workplace Equity Bill was passed by both the House of Representatives and Senate before ending the year in a conference committee that will iron out differences between the two versions.

The bill would require businesses with 25 employees or more to disclose salary ranges in job postings and protect an employee’s right to ask for salary ranges in the workplace. Employers with 100 or more employees would also have to report wage data to the Executive Office of Labor and Workforce Development.

AIM worked hard to limit potential negative implications for employers and negotiated this compromise over several months with the Wage Equity Now coalition and with the co-chairs of the Legislature’s Joint Committee on Labor and Workforce Development, Representative Josh Cutler and Senator Pat Jehlen. Protecting employer identities was key to making the bill agreeable to both advocates and AIM.

Another hopeful sign for employers came when Governor Healey sent to the Legislature a $4 billion plan to address a state housing crisis that threatened the economic future of Massachusetts. The Affordable Homes Act is designed to accelerate the supply of housing and moderate the prices our employees must pay to live and work here in the Commonwealth. Employers know better than anyone that soaring prices and limited housing availability are driving some of our best and brightest employees to pull up stakes for less expensive regions of the country.

It’s important to remember that the first year of any legislative session serves as a prelude to the final year in which most of the action takes place on important bills. The first year tends to be more deliberative, with scores of bill filings, hearings, and the establishment of priorities by legislative leaders.

The Government Affairs team at AIM has done a tremendous job during 2023 representing the interests of our 3,400 employer members. We’re fastening our seatbelts for a busy end-of-the-session in 2024.

As always, please contact Stephanie Swanson, Executive Vice President of Government Affairs, at sswanson@aimnet.org, with any questions about pending legislation.

Labor Market Begins to Normalize - November 13, 2023

Is the chronically tight US labor market finally showing signs of unwinding?

The most recent jobs data from the federal government seems to suggest that the economy may finally be approaching employment equilibrium after an extended period of labor shortages and wage acceleration. The trend is far from definitive but may provide hope to AIM members who have spent the post-pandemic period struggling to find workers.

The Labor Department reported on November 3 that job growth nationally slowed sharply in October. Employers added 150,000 jobs, half of the gain recorded the previous month and the smallest increase since June. Virtually all the job gains came in three sectors – health care, government, and leisure/hospitality – while the rest of the job market was flat.

No surprise, then, that wage growth has been slowing since March. Average hourly earnings rose 4.1 percent last month, down significantly from 6 percent in 2022. That’s why most economists believe that hiring pullback will be enough to bring the Federal Reserve’s historic interest-rate increases to an end.

Meanwhile, the “Great Resignation” of 2020-2022 has become the “Great Stagnation” of 2023 as the number of employees leaving their jobs has returned to pre-pandemic levels. The “quits rate” of people leaving their jobs dropped to 2.3 percent in August and September from a staggering high of 3.0 percent in the spring of 2022. The quits rate is even lower in the Northeast, ending September at 1.8 percent versus 2.0 percent a year earlier.

The Wall Street Journal reported last week that turnover has declined so steeply at some large employers that companies now find themselves over budget with certain teams.

The challenge, of course, is to slow the economy just enough to moderate inflation but not enough to push the nation into a recession. Economists, who overwhelmingly predicted a recession for this year, are split over whether it will happen in 2024.

A potential hiring slowdown may seem like distant noise to a Massachusetts economy still running at a historically low 2.6 percent unemployment rate. But even here, several companies participating in the October AIM Business Confidence Index commented that workforce availability seems to be “coming back slowly.”

The shifts underscore the importance of AIM’s advocacy on workforce development. AIM supports measures that strengthen the ability of Massachusetts residents to gain the education and skills needed for a rapidly changing economy.

A historically normal labor market will provide a big boost toward that objective. Please contact Stephanie Swanson (sswanson@aimnet.org) and the AIM Government Affairs team for more information.

AIM Members Among Largest Women-Led Businesses - November 6, 2023

Associated Industries of Massachusetts congratulates 10 AIM-member companies named last week to the list of the 100 top women-led businesses in Massachusetts compiled by the Women’s Edge and The Boston Globe.

Included in that list were companies led by the current chair of the AIM Board of Directors – Onyx Specialty Papers of South Lee, Pat Begrowicz, President and Co-Owner – and the immediate past board chair – Morgan Memorial Goodwill Industries of Boston, Joanne Hilferty, President and CEO

AIM is proud to have so many successful women-led companies as members of the association and, in particular, to have Pat and Joanne as key members of our board of directors.

Members of the Top 100 list were honored at a breakfast Friday at the Boston Marriott Copley Place. The 2023 list marks the 23rd annual ranking compiled by The Women’s Edge to recognize the female power players driving the Massachusetts economy.

The Globe and the Women’s Edge developed their list by looking at revenue or operating budget and other variables, including the number of full-time employees in the state, workplace, management diversity, and innovative projects.

The complete list of AIM members appearing among the top women-led businesses includes:

  • 2LifeCommunities, Brighton, Karen Edlund, CEO
  • BankFive, Fall River, Anne Tangen, President and CEO
  • Elaine Construction, Newton, Lisa Wexler, President
  • EY, Boston, Jane Steinmetz, Boston Office Managing Principal
  • Fidelity Investments, Boston, Abigail Johnson, CEO
  • First Light Power, Burlington, Alicia Barton, CEO
  • Mass General Brigham, Boston, Anne Klibanski MD, President and CEO
  • Morgan Memorial Goodwill Industries, Boston, Joanne Hilferty, President and CEO
  • Onyx Specialty Papers, South Lee, Patricia Begrowicz, President and Co-Owner
  • Riverside Community Care, Janet Maund, Director
Much Work Remains on the Tax Front - October 30, 2023

The Tax Foundation is out with its 2024 State Tax Business Climate Index and, to no one’s surprise, Massachusetts dropped from 34th to 46th in the rankings.

 

The ranking underscores the fact that the tax-relief package passed by the Legislature last month and signed by Governor Maura Healey represents a first step toward making Massachusetts competitive for business and affordable for employees. It also reflects the corrosive impact on the state’s business reputation of the income surtax passed by voters in 2022.

 

The Index scores states across five sub-indexes, each representing a major component of state tax codes: corporate taxes, individual income taxes, sales and excise taxes, property and wealth taxes, and unemployment insurance taxes. Massachusetts ranked dead last on unemployment insurance taxes, 47th on property taxes, 44th on individual income taxes, and 36th on corporate taxes for its overall rank of 46.

 

The 10 highest-ranked states for 2024 are Wyoming, South Dakota, Alaska, Florida, Montana, New Hampshire, Nevada, Utah, North Carolina and Indiana. The bottom 10 are Rhode Island, Hawaii, Vermont, Minnesota, Maryland, Massachusetts, Connecticut, California, New York and New Jersey.

 

The Tax Foundation is a non-partisan study organization that collects data and publishes research studies on U.S. tax policies at both the federal and state levels. Its stated mission is to “improve lives through tax policy research and education that leads to greater economic growth and opportunity.”

 

Our hope is that the recently passed tax-relief package, which includes a reduction in the short-term capital gains rate and a doubling of the threshold for the estate tax, will help Massachusetts improve its ranking in the 2025 Index.

 

But the 2024 results remind us that the business community and elected officials still have work to do to ensure that Massachusetts maintains a business climate that persuades both companies and talented workers to remain in the Commonwealth.

Housing Plan Addresses Supply, Affordability - October 23, 2023

Governor Maura Healey unveiled a $4 billion plan last week to address a housing crisis that threatens the economic future of Massachusetts.

AIM unequivocally supports the objectives of the Affordable Homes Act – to accelerate the supply of housing and moderate the prices our employees must pay to live and work here in the Commonwealth.

Employers know better than anyone that soaring prices and limited availability are driving some of our best and brightest employees to pull up stakes for less expensive regions of the country.

It’s now time for AIM and its 3,400 members to review the details of the governor’s proposal, which includes $4 billion in capital spending authorizations, 28 substantive policy changes or initiatives, three executive orders, and two targeted tax credits. All are directed at reducing barriers to the production and preservation of housing and giving communities the tools to develop more housing where they need it.

Key provisions include:

  • $1.6 billion for the repair, rehabilitation, and modernization of the state’s more than 43,000 public housing units.
  • $200 million for the Housing Innovations Fund to support alternative forms of rental housing for people experiencing homelessness, housing for seniors and veterans, and transitional units for persons recovering from substance abuse.
  • A local option to adopt a real estate transaction fee of 0.5 percent to 2 percent on the portion of a property sale over $1 million – or the county median home sale price. This fee–projected to affect fewer than 14 percent of all residential sales–would be paid by the seller of the property with the money to be used to fund affordable housing developments within the community.
  • Allows accessory dwelling units of fewer than 900 square feet throughout the state with the ability for communities to set reasonable restrictions. It is estimated this change could create more than 8,000 accessory dwelling units over five years.
  • $800 million for the Affordable Housing Trust Fund to provide resources to create or preserve affordable housing for households whose incomes are not more than 110 percent of area median income.
  • $425 million for Housing Stabilization and Investment Fund to support preservation, new construction, and rehabilitation projects.
  • $175 million for HousingWorks Infrastructure Program to fund municipal infrastructure projects to encourage denser housing development.
  • $100 million for CommonWealth Builder to spur construction of affordable homeownership opportunities.
  • $100 million for Mixed-Income Housing to support middle-income housing production.
  • $50 million for the Momentum Fund – a new pioneering initiative designed to leverage state resources to support large-scale, mixed-income multifamily development.

The governor’s proposal is the first step in a long journey that the Affordable Homes Act will take through the Legislature. We’d very much like to hear what you think.

Housing has been a major concern of AIM on behalf of its member employers for several years. Please read AIM Vice President of Government Affairs Sam Larson’s piece from January, below, for a discussion of the importance of housing to the commonwealth’s economic growth.

I invite you to contact the AIM Government Affairs team with your comments. Please email Stephanie Swanson, Executive Vice President of Government Affairs, at sswanson@aimnet.org.

AIM Opinions

Until We Meet Again - December 11, 2023

When I became President and CEO of AIM five years ago and spoke to hundreds of members at our Annual Meeting in the Boston Seaport, I could almost see the Dorchester neighborhood where I grew up. It struck me how many generous people had helped and supported me on the journey from my childhood in the shadow of St. Peter’s parish to leading the largest business association in Massachusetts.

Now, as I prepare to step down as President and CEO at the end of this month, I look back with similar gratitude to those who have made my tenure at AIM an unequivocal pleasure. The wisdom, talent, and generosity of these people have allowed me to become a better executive while helping this association grow stronger, even in the face of an unprecedented global health emergency.

I have had the privilege to serve as CEO under three extraordinary chairs of the AIM Board of Directors – Dan Kenary, Co-Founder and CEO of Mass Bay Brewing Company; Joanne Hilferty, President and CEO of Morgan Memorial Goodwill Industries; and Pat Begrowicz, President of Onyx Specialty Papers in South Lee. All three are entrepreneurs who injected a sense of creative possibility and management discipline into an association with 3,400 member companies from all corners of the economy.

Thanks as well to the many board members I have known since starting at AIM in December of 2000; to the awesome AIM team, past and present, for the collaboration we have shared over the years; to the elected officials and public officials who toil to make policy in the public interest; and to the members of AIM for their support.  I have great admiration for the courage, wisdom, and tenacity of Massachusetts employers who run successful businesses, provide economic opportunity, and make the commonwealth a better place to live and work.

I leave two primary legacies with AIM.

The first is an enduring commitment to diversity, equity, and inclusion that has become a centerpiece of AIM from our government advocacy to the establishment of the AIM Business Connect supplier diversity initiative. AIM maintains an inclusive vision of economic growth in which every business in the commonwealth has access to the resources it needs to compete and share in the economic prosperity of the state.

The second is the unparalleled leadership team that will chart the future of AIM and the Massachusetts economy beginning January 1. New CEO Brooke Thomson, Chief Operating Officer Chris Kealey, and the talented senior management team we have assembled leaves me confident that the best is yet to come for this 108-year-old organization.

In the meantime, Ad multos annos, until we meet again.

Designations Signal Bright Future for Massachusetts - October 16, 2023

Two federal designations announced in late September hold the potential to jump-start the next several decades of the Massachusetts economy.

 

On September 21, the commonwealth was awarded $19.7 million in funding through the federal CHIPS and Science Act to establish the Northeast Microelectronics Coalition Hub, a regional center that will advance the microelectronics needs of the U.S. Department of Defense. The hub is expected to spur new jobs, workforce training opportunities, and investment in the region’s advanced manufacturing and technology sectors. 

 

Five days later, the Advanced Research Projects Agency for Health, or ARPA-H, announced that Cambridge will host the agency’s “investor catalyst” hub, which will work with researchers, entrepreneurs, and financiers to speed the transition of basic research into new technologies and medicines. The announcement followed an intense lobbying effort by Governor Maura Healey’s administration and the state’s congressional delegation, as well as local business and academic leaders.

 

ARPA-H is modeled after the Defense Advanced Research Projects Agency, known as DARPA, the renowned research arm of the Defense Department. DARPA is known for developing the conceptual basis for a communications network that was a precursor to the Internet.

 

The Healey Administration is supporting the Microelectronics hub with up to $40 million in matching funds from the Immediate Needs Bond Bill filed in January. The Administration, through the quasi-public economic development agency Massachusetts Technology Collaborative, assembled and led a coalition of more than 90 organizations from across the Northeast in submitting a proposal in February to the federal government to create the hub through the Defense Department’s Microelectronics Commons program.  

 

“This is a once-in-a-generation opportunity for Massachusetts to be at the forefront of innovation and this cutting-edge sector. The Northeast Microelectronics hub will result in new jobs and workforce development opportunities, groundbreaking research development, and resources for business – all right here in Massachusetts,” said Governor Healey.  

 

AIM members involved in the effort include Raytheon Company, Analog Devices and MITRE.

 

Both federal awards reflect the present strengths of a Massachusetts economy with unparalleled concentrations in health care, education, computer science, engineering and advanced manufacturing.

They also underscore a future full of opportunity to build on those strengths. If government investments like these helped to create the defense, software and biotechnology industries in Massachusetts, the new programs promise to nurture additional industries and additional economic opportunity for the people of Massachusetts.

AIM President: Wage Compromise Helps Employers - October 10, 2023

Editor’s note – The following column was written by Brooke Thomson, President of AIM.

Why did AIM negotiate the compromise wage equity and transparency bill that was approved last week by the Massachusetts House of Representatives?

The easy answer is that without AIM at the table representing the interests of the business community, an alternative version of the bill that would have subjected employers to public exposure and possible private litigation for compensation inconsistencies could have moved forward. The compromise bill prevents that from happening, giving the commonwealth important information about wage equity without unnecessarily punitive and burdensome measures against employers.

The more meaningful reason for AIM’s participation is that this bill will help Massachusetts employers compete to attract the talent they need to grow their businesses. The bill sends a clear message that Massachusetts is committed to leading the way on pay equity and, in turn, attracting and retaining a workforce that will allow our businesses and economy to thrive.

The measure must still pass the state Senate and be signed by Governor Maura Healey before becoming law, but the vote last week is an important first step.

The bill approved by the House would require businesses with 25 employees or more to disclose salary ranges in job postings and protect an employee’s right to ask for salary ranges in the workplace. Employers with 100 or more employees would also have to report wage data to the Executive Office of Labor and Workforce Development. The state would then publish aggregate data reports on its website while protecting the identity of employers.

AIM negotiated this compromise over several months with the Wage Equity Now coalition and with the co-chairs of the Legislature’s Joint Committee on Labor and Workforce Development, Representative Josh Cutler and Senator Pat Jehlen. Protecting employer identities was key to making the bill agreeable to both advocates and AIM.

The bill will ultimately address the most pervasive concern I have heard from hundreds of employers with whom I have spoken in recent months – the inability to attract and retain workers in an economy running at 2.6 percent unemployment. Massachusetts employers are in a pitched battle for talent, and ensuring that women, people of color and other underrepresented groups will be paid fairly will help employers throughout the commonwealth win that battle.

Massachusetts in recent years has seen an exodus of our best and brightest employees who have decamped to other areas of the country. Massachusetts must be able to say to those workers: “This is why you want to come here and work for a Massachusetts employer.” The commonwealth must also be able to say to employers: “This is why you want to grow your business in Massachusetts.” This bill is yet another step in the right direction.