How is Trump hurting the Massachusetts economy? Let me count the ways.
But 2025 has flipped this dynamic on its head. Since January, the state's unemployment rate has jumped above the US rate and is rising far faster. We are also among the states with the
Indeed, there's a decent argument that Massachusetts has already fallen into a mild local recession, particularly judging from state tax collections. Sales tax receipts have flatlined in recent months, suggesting a worrisome pullback in consumer spending. Meanwhile, income from paychecks is decelerating fast, having fallen by half from its 2024 average.
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It doesn't take a Hercule Poirot or Benoit Blanc to figure out why the Massachusetts economy is fading faster than the rest of the country: Blame the unfriendly regime in Washington, D.C.
National economic policy is increasingly organized as a kind of anti-Massachusetts economic policy, including a battery of targeted assaults at the ramparts of our economic strength. And I'm not even talking about the needless tariffs and the nettlesome trade war, since those are hitting states far more exposed to disruptions in international trade than Massachusetts.
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Rather, let's start with the economic fallout from the Trump administration's direct attack on Harvard.
Harvard is a huge job creator and sustaining force in the local economy. It sends paychecks to professors in Brookline, lab technicians from Somerville, and valued staff members from Beverly to Quincy. It sustains local businesses in the Longwood neighborhood and Harvard Square. And it pursues long-term regional planning and large capital projects (in Allston and elsewhere) with a scale and consistency matched only by local governments.
The federal government has hampered all of this economic activity by freezing government grants, introducing a new endowment tax, and blunting Harvard's ability to attract foreign students. Hiring will slow. Construction plans will be put on hold. And even people who continue to collect their Harvard paychecks are likely to spend less of them, since their financial futures are now less secure. Combined, these direct and indirect effects will likely sap several billion dollars from the local economy every year.
And that's just one institution. Dozens of other colleges and universities in Massachusetts face similar, though more muted threats. About 4 percent of all the income earned in the state
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Add the imperiled research grants that normally go to our nation-leading medical centers, and Massachusetts may be more vulnerable than any other state in the country. No one gets more federal health and science funding, amounting to a good deal more than
That makes another turn of the economic screw, because health care has traditionally been a great economic stabilizer for Massachusetts. Now massive threatened cuts to federal grants are bringing austerity to research hospitals, just as they've done at universities.
The list goes on, from the foundering of offshore wind to the risk of looming Medicaid cuts. And while the state can draw on some of its strengths — its ample rainy day fund, its lack of divided government, and the stability of property taxes — it will be hard to prevent the state economy from further cracking in the heat of this hostile climate.
Ultimately, the broadest and most far-reaching problem may be the Trump administration's general distaste for our state's progressive values: its belief that we are tainted by 'wokeness,' by unchecked immigration, and by our enduring commitment to things like vaccines, transgender rights, and abortion access.
We are not the only such target. California is a major scapegoat — see the current immigration standoff or reports of a
And this is why an economic slowdown seems so unavoidable for Massachusetts. Not only are we being dragged down by the war against Harvard, against university culture, and against the kind of research that has made us a hub of innovation. But businesses and families rightly feel that they cannot take risks, cannot make big new investments, cannot pursue promising new ventures or leave their jobs for new careers. If things don't work out, there may be a Massachusetts-sized hole in the safety net.
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