IF YOU WANT to know if a state’s economy is healthy, there’s no substitute for looking at the growth—or loss—of private sector jobs. Grow jobs, and it means people want to be there. Lose them, and you’re not an attractive place to do business.  

Right now, Massachusetts is flashing warning signs. Since early 2020, the Bay State has had the third slowest private sector job growth in the nation. According to the Bureau of Labor Statistics, Massachusetts’s private sector is 0.74 percent smaller today than it was in January 2020—one of only four states, along with the District of Columbia, to see a net loss.  

Meanwhile, states like Florida, Texas, and North Carolina have powered ahead, with private sector job growth of roughly 12 percent, 11 percent, and 10 percent, respectively, over the same period. 

The stakes are real. A weak private sector hits residents directly—fewer jobs, higher inequality, and a cost of living that gets harder to bear. It’s also showing up in outmigration: young professionals and skilled workers leaving for places where opportunity is growing, not shrinking.  

And this isn’t just about one or two sectors in the state underperforming. Between January 2020 and March 2025:  

  • Retail trade fell by 7.7 percent  
  • Manufacturing dropped 5.4 percent  
  • Information jobs declined 4.2 percent  
  • Trade, transportation, and utilities slipped 4.0 percent 

Even industries in which Massachusetts usually leads are struggling. Professional, scientific, and technical services employment grew by 5 percent overall—but it peaked in 2022 and has since dropped by 3 percent. The health care, education, and management sectors have grown a bit, but not nearly enough to offset the losses elsewhere.  

Meanwhile, states that compete with us aren’t sitting still. They’re moving aggressively to attract companies, build stronger job markets, and become magnets for talent.  

North Carolina’s most dynamic regions—the Research Triangle and Charlotte regions—are an important comparison. Like Massachusetts, they have strong universities, major finance hubs, and growing biotech and tech industries. About five million people live there, not far from Massachusetts’s seven million. So how have they fared since early 2020? They’ve added 254,900 nonfarm jobs.  

Imagine if Massachusetts had added 250,000 jobs since early 2020 instead of losing 24,100. We would have more tax revenue—an additional $1.3 billion in state income and sales tax revenue alone. We would have more young people choosing to stay, and more investment flowing into the state.  

More importantly, those new jobs would fuel demand for restaurants, retail stores, construction, health care, entertainment—you name it.  

Healthy private sector growth doesn’t just bring jobs; it lifts entire local economies.  

Turning these trends around will not be easy—and it will take a real change in mindset. Leaders have to get serious about regaining the state’s competitiveness. That means the courage to aim for “normal” rather than virtue signaling excesses on issues that affect the cost of living and doing business.  

It will take humility—a rare commodity in Massachusetts. Team Massachusetts needs to take a hard look at how other states are operating and learn what’s working. With dozens of states clipping back on regulations, fees, and taxes, we’ll have to hustle just to get back to the middle of the pack. 

Nowhere is a mindset shift more urgent than in housing regulation. Targeted measures like the MBTA Communities Act and Chapter 40B are insufficient. Massachusetts needs broad, market-based zoning reforms that establish clear, fair rules for both developers and communities—and that drive the housing growth needed to attract and retain talent. 

The same change in attitude is needed for the state’s sprawling $2.5 billion workforce development programs— rarely tracked for real outcomes, unlike in states that now insist on measurable results like job placements. In January, we called for common-sense reforms: a workforce “czar,” data transparency, and program alignment with actual employer needs. 

Ditto on the state’s perennially most or next-to-most expensive unemployment insurance system, which is a hidden tax on hiring, making it pricier to hire workers here than in other states. 

And if we are to create jobs in our communities, we need to get serious about streamlining the regulatory thicket that stops entrepreneurs in their tracks. A study by the Institute for Justice found that in Boston opening a restaurant, barbershop, or food truck means slogging through 37 to 92 steps, shelling out thousands in fees, and wrangling with multiple city agencies.  

Massachusetts has all the key ingredients of a successful economy—top universities and hospitals, smart people, a strong financial sector and a history of innovation—except one: government leadership that allows for private sector dynamism. This kind of dynamism lets individual entrepreneurs and employees build their dreams and support their communities.   

Massachusetts is a long way off from this dynamic vision, and the warning signs underscoring what that means for our economy aren’t subtle anymore. 

Jim Stergios is executive director of Pioneer Institute.