Most troubling, the report concludes the main income-boosting strategies that Massachusetts families have learned to employ are nearly exhausted raising serious questions about the economic fate of today’s families in the years ahead. Despite the state’s strong performance on a number economic measures, including unemployment, job-creation, and productivity, researchers identified a number of factors responsible for the increasing economic vulnerability of families.

IMPLICATIONS

The findings in the report should be given the sustained attention of the state’s business, labor, education, and political leaders. In an election year, and during a period of renewed stress on our economy, it is critical that these issues related to the economic fate of the state’s workers and families be discussed and debated. Massachusetts is in desperate need of fresh, pragmatic policies to improve the economic prospects of our families and ensure that the American Dream becomes more accessible than it is today. If we don’t develop these policies, we are likely to see young and educated middle-class families decide to pursue the American Dream elsewhere.

Among them:

1) “Working Women Tapped Out”

Massachusetts families are at or near their practical limits in relying on working wives to boost their incomes. The average wife’s share of family income has grown from 13% in 1979 to 32% today. In fact, roughly 80% of the income growth enjoyed by a married couple over the past twenty years can be traced back to the wife’s earnings. Not surprisingly, the data show that, not only are more wives working outside the home, they are working more hours than ever before.

Major Findings: Over the past twenty years, the percentage of Massachusetts mothers with children under 18 who work outside the home increased from 61% to 75%. Amazingly, that means women with children are now just as likely to hold jobs as those without children. The typical working wife now works 1,976 hours per year, more than the equivalent of a full-time year-round joband half of all working wives actually work more hours than that. It is working moms who have added the most hours to their workweek. In 1979, the typical working mom put in 20 hours per week. Today the number is 30 hours per week, or 1,560 hours per year, almost a full-time job (1,800 hours per year).

2) “Not Enough Hours in the Day”

The bread-winners in the typical middle-class family in Massachusetts have not only bumped up against the practical limits of working more hours, but the tremendous numbers of hours being worked raises questions about the quality of family life.

Major Findings: In 1999, the average family, including all adults, worked 2,850 hours per year-the equivalent of a 1.5 full-time workers. Middle-class families (those in the middle three income quintiles) work particularly long hours, as many as 3,900 per year. And the most affluent families with incomes in the top 20% are working an astounding 4,384 hours per year.

3) “One Bread-winner Is Not Enough”

A sustained decline in married couples and a simultaneous rise in single-parent families has meant more families in Massachusetts must rely on one income earner, thus decreasing their chances of achieving a middle-class standard of living.

Major Findings: There are 38,000 fewer married couples (with and without children) today in the Bay State than there were in 1980, while the number of single-parent families has risen by roughly the same number (39,000). As a percentage of all families, married couples account for 74% (down from 85% in 1970). Over the past twenty years, the typical married couple’s income rose $11,000 to $70,000 in real terms. In contrast, the income of female-headed families remained flat at just $25,000.

4) “College Education Required”

The income gains that come from each additional year of schooling have increased dramatically. Families with less education have been increasingly penalized, creating a widening income gap. Having at least a two-year college degree has become a pre-requisite for a middle-class standard of living.

Major Findings: The transformation of the state’s economy over the past twenty years can be seen in a dramatic increase since 1979 in the number of college-educated workers (up 415,000) and a decrease in workers holding high school degrees (down 156,000). In 1983, 30% of all jobs in the state were in occupations that required a college degree; today that number is 38% and rising. Since 1979 real family incomes have increased only for those families headed by someone with a bachelor’s degree (up $8,000 or 11%) or an advanced degree (up $24,000 or 30%). Families headed by high school dropouts were severely punished (down $7,000 or 21%), families headed by high school graduates failed to make any progress (down 1%). By 1999 the typical family headed by a person with a bachelor’s degree earned three times as much as a family headed by a high school dropout. In 1979 the ratio was 2.2:1.

5) “1990s Recession Hit Families Harder Than Expected”

After an exhaustive analysis of worker earnings, household and family incomes, employment and labor market data covering the period from 1979 to 2000, researchers concluded that the severity of the early 1990s recession has contributed to a situation where today’s typical family is back in the identical economic position it was in at the peak of the 1980s boom.

Major Findings: Most middle-class families have been running in place. The report found the inflation-adjusted median income of non-elderly married couples was $62,000 in 1979, grew to $76,000 in 1989, but, due to the severe impact of the early 1990s recession, only recently crept back to $76,000 as of 2000. In addition, the intensified income inequality of the period also contributed to a marked decrease in the share of the income pie enjoyed by middle-class families (those in the middle three income quintiles). In fact, the middle-class share of the income pie shrunk from 53.8% of all income in 1989 to 50.6% in 1999. The report also concludes that poor and working-poor families are finding it harder than ever to make it into the middle class due to a tragic combination of low education levels, low number of hours worked, and the increasing numbers of these families that rely on a single income earner. Among other findings, the report discovered 40% of families in the bottom income quintile are headed by a high-school dropout. Families in the bottom quintile also work only 992 hours per year. And a single-parent family was found to be more than six times as likely to be in the bottom income quintile than in the top.

6) “1990s Recovery Not As Diverse As Once Believed”

Contrary to conventional wisdom, the new jobs created in Massachusetts in the 1990s were not uniformly distributed throughout the economy, but were concentrated in a handful of sectors, providing family bread-winners without a connection to those sectors, very few new job opportunities. In addition, the continued steady decline in manufacturing greatly reduced job opportunities for blue-collar workers. The narrowness of the recovery raises questions about the state’s vulnerability to future economic downturns.

Major Findings: Jobs in the state’s private services sector grew from 26% to 36% of all jobs between 1983 and 2000 while the share of manufacturing jobs declined from 24% to 13%. The share of jobs in all other sectors essentially remained the same. “Business services” (a subsector within the private services sector) represented only 6% of all jobs in the early 1990s; yet it created more than 25% of all the new jobs in the 1990s.

7) “The Geography Of Jobs Matters More and More”

The state’s economic prosperity has not been uniformly distributed, with families in different regions facing very different economic challenges in terms of job opportunities, earnings, and incomes.

Major Findings: Western Mass. has still not recovered all the jobs it lost during the recession of the early 1990s. The Greater Boston and Central Mass. regions added new jobs at a rate of roughly 20% versus 11% in Western Mass. since the early 1990s. In the last ten years, wages have grown four times as fast in Greater Boston than in the Western Mass. (27% versus 6%). County level comparisons are even more troubling: Average worker earnings in Middlesex County increased 36% while Hampshire County posted a 1% gain. The story of Southeastern Mass. over the past ten years is mixed. The region led the state with a 27% increase in new jobs; yet salaries edged up just 12%.

8) “Owning A Home Harder Than Ever”

While modest progress was achieved in boosting homeownership among Massachusetts families in the 1990s, the state continues to lag the nation in its home ownership rate.

Major Findings: As of 2000, the state’s overall home ownership rate (62.2%) was the sixth lowest in the nation, and the gap between Massachusetts and the nation was largest at the middle and lower end of the income spectrum. High house prices, when compared to the state’s above-average incomes, make Massachusetts the 3rd least affordable state in which to live. In 1980 the state was 26th least affordable safely in the middle of the pack.