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The Baker-Polito administration today released a report it commissioned to evaluate the ways that the COVID-19 pandemic has changed work habits in Massachusetts as the state emerges from the pandemic.
The McKinsey & Company study, which included interviews with hundreds of employers and workers, attaches data to what many have already been expecting: that commuting and consumer habits have changed and aren’t likely to return to pre-pandemic patterns for the foreseeable future.
The ‘Future of Work’ report explores what the implications of COVID-19 might be for the Commonwealth across its regions, demographics, economic sectors, commercial centers, local downtowns, transportation, and public spaces.
COVID-19 has shifted how Massachusetts residents work, the report finds, which has accelerated many existing factors that impact the future of work (such as the use of e-commerce and the pace of adoption of automation). In addition, new factors have emerged — such as the spread of remote and hybrid work and a reduction in business travel — that affect Massachusetts residents differently based on region, industry, occupation, gender and race.
The report evaluated implications of these trends across different regions and analyzed their impact on the Commonwealth’s Gateway Cities.
The report concludes that changing ways of working — such as hybrid and remote work — may shift the “center of gravity” away from the urban core. At the same time, changes in the economic landscape will mean that expansive workforce training will be needed to connect workers with the skills they need for the future economy, with potentially 300,000 to 400,000 people needing to transition to different occupations or occupational categories over the next decade.
The report finds that the high cost of housing will remain a challenge, as will the need to ensure that all communities can share equitably in the Commonwealth’s growth. The report estimates that the Commonwealth will need to produce 125,000 to 200,000 housing units by 2030.
The report provides eight core insights:
1. Demand for office real estate may fall as workers spend more time in residential areas due to hybrid work.
2. Hybrid work will likely drive demand for flexible child care options, requiring child care business models to evolve.
3. Public transit ridership is likely to fall, with the steepest decline likely in commuter rail.
4. Business travel may be structurally reduced from pre-pandemic levels.
5. Workforce training may be required at an unprecedented scale and pace.
6. The state’s population is likely to grow, albeit more slowly than pre-pandemic.
7. Existing equity challenges will intensify.
8. Equitable housing opportunities will be key to retaining and attracting people.
The administration outlined steps that it is taking to address the key findings of the report, with investments and other initiatives to boost housing production and downtown economies, connect workers with skills for high-demand fields, support changing transportation needs, and promote flexibility in child care.
“The ‘Future of Work Report’ provides us with a roadmap to build on our strengths and address areas that remain challenges,” said Gov. Charlie Baker.
Baker and Lt. Gov. Karyn Polito announced the release of the report at an event held at the Tufts Launchpad location for BioLabs, a biotech startup accelerator that is receiving $102,000 to train 27 workers and create 20 jobs as part of the latest round of awards from the administration’s Workforce Training Fund Program. In total, the program is awarding $8 million through this latest round to about 100 businesses statewide to support the training of 4,300 workers with a range of skills like project management, advanced software training, and other technical skills.
The administration is proposing to boost investments in programs like the WTFP through its $2.9 billion plan to spend part of the discretionary funds received by the Commonwealth from the federal American Rescue Plan Act of 2021. The administration’s plan includes $240 million for workforce development and job-training programs.
The administration promoted its proposal, filed in June, to spend $2.9 billion in federal funds from the American Rescue Plan Act to address many key needs.
The plan includes:
• $1 billion for housing priorities, with a particular focus on creating homeownership opportunities in communities of color
• $240 million for workforce training opportunities to help train workers to connect with high-demand industries
• $350 million for downtown development and economic growth, to help communities re-imagine their downtowns and spur development
• $175 million to boost substance use and behavioral health programming, a key area where communities of color have been most impacted throughout the pandemic
To address continued challenges in child care and early education, the administration is taking a series of actions:
• Investing more than $640 million in federal funding for child care, focusing on building capacity at early education providers and targeting funds to the greatest areas of need according to the Social Vulnerability Index
• Sustaining increased child care subsidies for low-income families and other pandemic-era changes that expand access to care
• Leveraging the Commonwealth’s workforce development programs to develop a stable pipeline of early educators to expand access to affordable care
• Partnering with the business community to best understand specific needs for flexibility across specific industries and regions
To address shifting work habits and other trends identified in the report, the MBTA and Massachusetts Department of Transportation are modifying schedules and making other adjustments.
The Commuter Rail’s new Regional Rail Schedule represents a shift toward more consistent, regular service throughout the day, compared to pre-pandemic service that was heavily skewed toward morning and evening rushes. The new schedule supports increasing travel habits like intra-line (non-Boston) trips and reverse commutes to Gateway Cities. It also supports teleworkers’ local trips and three-day-per-week commuters.
Continued promotion of weekend service, such as $10 weekend passes will also promote travel to key recreational and tourist destinations outside of Boston.