| Confidence among Massachusetts employers slipped for the second straight month in August and has been flat since April, according to a business group whose president says employers feel “under siege” from government mandates and pending policy proposals.
The Associated Industries of Massachusetts reported Tuesday morning that its business confidence index dropped 0.3 points to 61.2 last month. The reading is 7.1 points higher than at this time in 2016, but 0.2 points lower than at the start of 2017. Readings above 50 are considered in positive territory.
Massachusetts employers in August “grew less bullish about their own companies during the month, but showed growing optimism about the national economy and about prospects for manufacturers,” according to AIM, which reported its U.S. Index of national business conditions rose 2.3 points to 60.2.
“Employer confidence continues to move in a narrow range defined by broad optimism about both the state and national economies,” said Raymond Torto, chair of AIM’s board of economic advisors. “The steady level of confidence readings above the 60 mark reflect a state economy that grew at a 4 percent annual rate during the second quarter while maintaining a steady level of employment growth.”
Gov. Charlie Baker this summer agreed to a $200 million health insurance surcharge on employees to help the state pay for its growing MassHealth expenses and advocacy groups are pushing to place binding paid family leave and minimum wage increase proposals on the 2018 ballot.
AIM President and CEO Richard Lord said a “significant number of employers” who responded to the August survey expressed frustration with the surcharge “and the proliferation of complex and expensive employment laws.”
“Amid a generally strong economy, employers feel under siege from a government and an electorate that seem willing to impose crushing financial burdens on job creators in the name of social progress,” Lord said in a statement. “Employers are telling us that additional measures that may be headed to the statewide ballot – paid family leave, a $15 minimum wage and a punitive surtax on incomes of more than $1 million – may force them to relocate.”
The paid leave, minimum wage and income surtax proposals are being pushed by a formidable advocacy coalition that is pressing to address income inequality and to enable more workers to share in the economic growth Massachusetts has experienced since the Great Recession.
Health care cost control and criminal justice system reforms are on Beacon Hill’s tentative fall agenda, although Democratic legislative leaders have yet to outline concrete plans and the Legislature is extending its August recess into the first work week after Labor Day. The House and Senate in July rejected a package of reforms Baker proposed to help keep state health care costs in check, saying they would come up with an alternative proposal.
The U.S. Bureau of Labor Statistics last week reported an August jobless rate of 4.4 percent and said the national unemployment rate has been either 4.3 or 4.4 percent since April. Since January, 1.2 million jobs have been added in the U.S., according to U.S. Secretary of Labor Alexander Acosta, who touted job growth in manufacturing, construction, and mining and logging.
“This year, we have seen average private-sector job increases of 176,000 jobs per month, as compared with 170,000 jobs per month in 2016,” Acosta said in a statement. “The unemployment rate for Americans with less than a high school diploma is at its lowest rate in nearly 11 years, dropping 0.9 percentage points last month. Nominal wage growth is steady, yet real wage growth has room for improvement.”
