Worcester Named Most Business-Friendly City in Massachusetts

By Mass Business Blogger September 8, 2015 September 8, 2015 Business, Economy, Politics

Massachusetts Small Businesses Make a Remarkable Turnaround in Just a Year

Business confidence in Massachusetts cities continues to grow . . . and you may not believe which city is at the top of the list. A recent survey of small business owners in New England ranked Worcester, Massachusetts, as the most business-friendly city in the state. When pinned against all cities in New England, Worcester was second only to Manchester, New Hampshire.

Worcester’s rise above regional hubs such as Boston and Providence caps a remarkable turnaround for the city. Business leaders agree that Worcester’s business climate is much-improved—the city received an overall grade of “B-” this year despite a lowly grade of “F” last year.

Worcester, MA Is Positioned to Expand Across All Business Sectors

Worcester and other mid-sized cities serve as a complement to Boston’s hub of finance, education, government, and professional services. They provide a hospitable climate for smaller businesses and manufacturers that may not be able to afford or be recognized in a larger city. Steve Rothschild, considered a small-business mogul in Worcester for his work with Applied Interactive, Bulbs.com, and Furniture.com, says that “Worcester is a great place to run a business because there is a well-educated workforce, an easy commute for employees, and low-cost commercial real estate.”

Worcester is particularly well-positioned because it has the history and infrastructure of a manufacturing hub but also a large service economy. The city boasts nine institutions of higher education and five major hospitals. Unlike many mid-sized cities that have struggled with population decline, Worcester has had steady population growth for the past three decades. Per capita income and education levels are on par with the state average. The combination of a well-rounded economy and an educated and skilled workforce allows Worcester to expand in many different sectors.

Improvement in Business Confidence “Grade” in Worcester, MA, Mirrors Massachusetts State Performance

The jump in Worcester’s business climate is consistent with the state’s improving economic indicators. The unemployment rate of 4.7% is significantly lower than the national average of 5.3%. For ten straight months, Massachusetts has increased its number of available jobs; 46,200 were added in 2015 so far—7,200 of which were added in July alone. Although most new jobs were in the education and health sectors, the state also added 1,400 manufacturing jobs in July. The Massachusetts Manufacturing Extension Partnership, based in Worcester, noted that much of the new manufacturing jobs came from small businesses with less than 50 employees. A number of jobs have also come from the booming craft beer industry in Massachusetts.

Business owners can be fickle when it comes to expressing approval of any business climate. The latest survey results, however, show that Worcester is headed in the right direction. If its trajectory continues, it will benefit not only the local economy, but the state economy as well.

Have you started a business in Massachusetts? Do you agree with the Worcester’s new grade of B-?

MA Craft Beer Industry Pours Money Into the Massachusetts Economy

By Mass Business Blogger September 4, 2015 February 14, 2018 Business, Economy, Entreprenuer, Food Service

According to a report compiled by John Dunham & Associates, more than 25,900 new jobs in the commonwealth could be directly attributed to the the growing MA craft beer industry. Not only has craft brewing brought a rush of jobs into Massachusetts, it has generated over $2.5 billion in sales and taxes for the commonwealth.

MA Craft Breweries: Profit by the Barrel

Craft beer is a growing industry throughout the country—it has grown by 32% over the past few years. Simultaneously, though, large companies like Anheuser-Busch have seen their market shares decrease by as much as 7%. American beer palates seem to be evolving—or have at least begun to align more closely with the flavors of smaller craft breweries. In 1980, the Brewers Association reported that there were just 50 craft breweries in the country. As of June 2015, that number has risen to 3,739.

Craft Brewing’s Early Days in Massachusetts

There is disagreement about the official “beginning” of the craft beer business, but it has early roots in Massachusetts. In the mid-1980s, Jim Koch went door-to-door in Boston selling his family’s home brew to local bars. He then founded the Boston Beer Company, following the huge success of his flagship beer, Samuel Adams. The company, which recorded a gross 2014 profit of over $465 million, is still dedicated to the growth of the MA craft beer industry. Early in 2015, the Boston Beer Company partnered with Accion to offer microloans of between $500 and $25,000 to small breweries. They also sponsor a hops-sharing program that helps smaller breweries obtain the hops necessary to brew India Pale Ales (IPA), one of the most popular styles of beer.

MA Craft Beer Taps Into Other Industries

Craft beer sales have significantly improved the Massachusetts economy in a number of ways. Twenty-nine cents of every dollar spent on craft beer in Massachusetts go toward personal and business taxes paid by brewers—that’s $766 million in additional tax revenue. Craft brewing has had a ripple effect on other industries as well. The agricultural industry, for example, benefits from brewers’ incorporation of fruits, vegetables, spices, and other seasonings into their beers. This experimentation has catalyzed a flux of new brews that were previously unavailable. Construction companies and contractors have been hired to renovate old warehouses and abandoned buildings into breweries, like Abandoned Building Brewery in Easthampton, MA. The manufacturing industry has benefitted from craft brewing’s bottling, canning, and labeling processes. In Massachusetts alone, brewing has created over 7,000 supplier jobs.

food_and_beer_enjoyed_at_Mayflower_brewery_ma

Guests enjoy food and brew at Mayflower Brewery Company in Plymouth, Massachusetts.

Craft Brewing Expected to Grow Lager and Lager

As a growing industry, craft brewing has created a nationwide economic swell, with microbreweries cropping up in towns and cities across the United States. Not sure where to start? Visit a local Massachusetts craft brewery today. Recommend your favorite beers in the comments below!

Craft brewing has shaped up to be a hugely profitable and flourishing industry. We don’t know about you, but we’ll toast to that. Cheers!

Massachusetts Startup Creates Database to Connect Manufacturers

By Mass Business Blogger September 2, 2015 February 14, 2018 Business, Economy, Technology

While experts have regularly acknowledged the decline of the manufacturing industry in America, they have done very little to reverse it. An innovative, new-business incubator in Somerville, MA is starting to take steps in a better direction.

Greentown Labs—A Manufacturing and Technology Incubator

Greentown Labs assists other startups in the technology and manufacturing fields. Like many business incubators, it incorporates a cooperative working space for startups. However, unlike the others, Greentown also offers prototype-manufacturing space, shared machinery and shop tools, and a large event space. In total, the lab offers 33,000 total square feet of creative space for their companies. Manufacturing startups at Greentown are provided with the necessary infrastructure to move their company from conceptual stages to actual production- and revenue-making stages.

Greentown Labs currently hosts 40 companies and supporting organizations that employ over 300 people. Not surprisingly, many of Greentown’s companies specialize in clean technology and the energy industry. The lab also boasts an impressive list of energy-conscious alumni that have “graduated” into their own spaces.

Not only do Greentown companies have a versatile physical space to use, they also utilize the services of “sponsor companies” to assist their operations. For example, members are granted access to sponsor-supplied software at little to no cost to their company. Additionally, members have access to marketing, human resources, graphic design, insurance, and other services. Companies working in the incubator also have the all-important opportunity to network and collaborate with other startups.

Bringing Manufacturing Innovation Back to the Bay State

Incubators such as Greentown Labs make it easier for startups to bring manufacturing job opportunities back to Massachusetts. Over the past several years, Boston has quickly emerged as one of the country’s leading technological hubs. While major research universities such as MIT and Harvard play a role, a business incubator devoted to manufacturing provides a unique, invaluable advantage to the Boston area.

Massachusetts Business Incubator Is Popular Among Politicians

The incubator philosophy has not gone unnoticed by local business and government leaders. During a recent visit to the Greentown Labs, Massachusetts Senator Elizabeth Warren said they were “the best of what America has to offer.” She said that it is crucial to “level the playing field” between startup initiatives and technology giants; this will help prevent the behemoths from dominating the industry. As Greentown Labs continues to nurture these successful startups, we look forward to their growth and the positive impact they will have on our economy.

Massachusetts Confidence Index Offers Promising Data

By Mass Business Blogger August 25, 2015 September 4, 2015 Business, Economy, Employment

Stemming the tide of declining confidence in the Massachusetts economy for the first time in three months, employers indicated that they had a more positive view of the state’s economic outlook during the month of July. The Associated Industries of Massachusetts Confidence Index, which serves as a barometer of local business activity, increased by nearly three points last month, rising to 59.2 points on a scale of 100.

Seen as a benchmark of business function and opportunity in Massachusetts, the Confidence Index registered an all-time high of 68.5 points in 1997 and 1998; they saw a historical low of 33.3 points in 2009.

A lobbying and management group, the Associated Industries of Massachusetts (AIM) collaborates with Massachusetts employers to enhance the business environment and generate greater business opportunity. They also engage various sectors to help reduce healthcare expenditures, unemployment insurance assessments, and other related business costs. AIM also collaborates with legislators in defining regulations on local, state, and federal levels and promotes the need for a knowledgeable and skilled labor force. Another priority for the group is keeping members informed about mandated changes in employment standards and other regulations that may have an adverse impact on their business and the economy of the Commonwealth.

Chairman of the Associated Industries of Massachusetts Board of Economic Advisors Raymond G. Torto asserts:

The AIM Index is up three points from last July, and apart from its recent crest in February and March is at its highest level since December 2006. Like the economy itself, the Index has followed a long-term trend of improvement. But the upward course has been longer and bumpier than most past recoveries.

Data extracted from the released report indicates that the current Massachusetts confidence index data is as strong as from 2006, preceding the 2007 recession.

Details from the Index:

Employers’ opinion of current business conditions, the Current Index, rose 3.5 to a level of 59.7 points in July.
Gauging expectations for the next six months, the Future Index, rose 2.2 to a level of 58.6 points.
Assessing the overall situations of their operations, the Company Index, rose 3.7 to a level of 61.7 points.
Increasing 5.3 to a level of 63.2, the Sales Index rose to its highest level in nine years.
Rising to 57.2, up from 54.7, the Employment Index indicated strength compared to prior months.

While the overall view is positive, there were some dips in the manufacturing sector, as well as a lower general confidence rating in areas outside the Boston Greater Metropolitan area, displaying a moderate rise of only 1.1 points. As with any business-monitoring system, fluctuations can be expected; however, there seems to be a consistent but gradual increase in confidence in the Massachusetts business climate.

Do you agree? What kind of working conditions have you experienced in Massachusetts?

Massachusetts Looks to Regulate Short-Term Rentals

By Jessica Stevens August 24, 2015 August 24, 2015 Business, Hospitality

The “sharing economy” has taken the United States by storm. In less than a decade, companies such as Uber, Handy, and Airbnb have become well-known brands and, in some places, market leaders. But the laws regulating these companies and their users can often seem like a gray area. Now some lawmakers are taking a close look to see if it’s time for state legislation of these activities.

Airbnb is the latest company to experience such scrutiny. Founded in 2008, the website allows its users to list, find, and rent short-term housing. The site is popular among users who are seeking an affordable alternative to hotels. The site is also popular among property owners looking to rent out extra space, whether it be an entire house, an apartment, or just an extra room.

But not everyone is enamored with Airbnb. Renters have complained of substandard or even dangerous accommodations, and owners have complained of renters who have damaged their property. Beyond user complaints, Airbnb has also felt backlash in communities that see it as a way to evade land-use laws and taxes. Neighborhood residents often find that properties in quiet, residential areas are turned into de facto hotels or flophouses.

Airbnb claims that most of its users rent out properties on only a temporary basis and that it simply connects interested parties to one another. To that point, its critics respond that the company has effectively created an online marketplace for transient housing. They also claim that Airbnb has taken too much housing off market for local residents, thereby creating housing shortages.

Many states are now considering state legislation that would formally regulate the short-term rental market that has proliferated as a result of Airbnb. In Massachusetts, state legislation has been proposed that would require registration of all short-term lessors of property. The legislation would also impose safety standards and allow local governments to inspect properties for safety violations. The law would also impose a 5% tax on such rentals, similar to the tax levied on hotel stays.

If the law passes, Massachusetts would be the first state to regulate the short-term rental market. Some cities have already done so, including San Francisco, Portland, and Philadelphia. As sites such as Airbnb continue to grow, more states will have to determine if and how they are going to regulate their activities.

Millennials and Money: Where Financial Literacy Failed

By Mass Business Blogger August 20, 2015 September 4, 2015 Business, Economy

Looking back on your high school days, you probably remember lessons like long division or the day you finally mastered a cursive “Q.” But what about the class where you learned to balance a checkbook? Or apply for a car loan? While Baby Boomers were more likely to reap the benefits of a home economics class covering life skills and simple financial planning, Millennials are now facing a devastating education gap when it comes to basic financial literacy. Now, a pair of Worcester natives are on a mission to target this educational blind spot and help money management make sense to our future business leaders—before it’s too late.

Recent Clark University graduate, Rebecca Liebman, and her brother Michael, are harnessing the power of the Internet to tackle the problem of financial illiteracy among Millennials. They are planning to launch a website called LearnLux.com, which would give Millennials the tools to control and understand their financial futures. Michael Liebman, LearnLux president, is currently majoring in finance at Bentley University, but his passion for figures extends back as far as age seven, when, according to their website, he “proclaimed [ . . . ] that his favorite thing to do was count money.”

“The 19–35-year-old demographic has the worst national average for credit scores.”

The lack of financial literacy among Millennials has resulted in some frightening statistics. Research by the credit information service, Experian, has revealed that the 19–35-year-old demographic has the worst national average for credit scores, and a significantly unfavorable debt-to-income ratio than any previous generation. According to a recent poll by the Brookings Institution, about 50% of college freshmen surveyed are incorrect or entirely ignorant of the amount of student loan debt they carry. While many hypotheses have been put forward as to the cause of the lapse in financial education for Millennials, the takeaway is clear: Millennials must be taught to manage their own money before they can competently take the helm of larger financial responsibilities.

LearnLux’s founders may have a better handle on their finances than many of their peers, but that doesn’t mean they’re taking on this challenge alone. Their innovative approach to financial education for young adults has convinced the MassChallenge startup accelerator to select LearnLux as one of its 128 finalists for 2015. While the program is still in its testing phases, it seems clear that these young entrepreneurs are well on their way to bridging the gap in Millennial financial literacy.

Public Housing Pushes Residents Toward A Better Life

By Mass Business Blogger August 14, 2015 September 4, 2015 Business, Economy, Employment

Ray Mariano, executive director of the Worcester Housing Authority (WHA) and former four-term mayor of Worcester is on a mission to point individuals and families currently residing in public housing toward “A Better Life.”

A Better Life (ABL)

ABL is a program designed to encourage upward mobility for public housing tenants; challenging them to reach goals, become educated, secure employment, and to make better healthcare and financial choices.

Though the program was voluntary when instituted in 2011, it has since been made compulsory for some residents within the WHA system.

The ABL program requires one adult in each household to work or attend school for a minimum of 1,200 hours per year, which is an average of 23 hours per week. Support services to reach for these goals are provided through grants as part of the program. If the residents do not make an effort to abide by the program rules within three years, they face eviction. The disabled and elderly are not a part of the mandatory participation program, so they will not be compelled to leave public housing.

The Cititzen’s Housing and Planning Association recently submitted a bill to the Legislature this past July, which would bring ABL to five housing authorities around the state. Some officials question the morality of making self-sufficiency programs mandatory. Mariano points to the statistics from the last three years as evidence of the program’s effectiveness. Only 36% of ABL participants were employed when the program first began. Since then, the percentage of employed participants has more than doubled. Additionally, the percentage of tenants going to school has tripled.

ABL Opposition

While political opposition can no longer prevent the implementation of mandatory participation, some tenants and community members are still at odds with ABL. Mariano, who grew up in Great Brook Valley—the same area currently targeted for the mandatory ABL program—is faced with the difficult mission of encouraging people in his community to embrace the change.

Feeling that it unfairly targets single Latino mothers and their children, the detractors point out that Mariano’s own 2012 statistics show that 89% of families in Great Brook Valley are headed by single females. Mariano has countered that ABL can help these families by making it possible for single mothers to get an education; many will also be eligible for childcare vouchers.

The Bigger Picture

While many families have been in WHA public housing for generations, many needy families are waiting to get in. By enabling those in public housing to make efforts to rise out of their current situation through education and gainful employment, those currently in need of safe and affordable housing will be able to get off of the waiting lists, out of homelessness, and into housing. Worcester currently faces a crisis, with over 5,000 people on the applicant waiting list for public housing. In order to provide those individuals and families with much-needed help, those currently in the WHA system need to make strides to move into self-sufficient lifestyles. Mariano believes that ABL is the right program to help them grow.

Public housing problems like these aren’t unique, but Worcester’s new mandatory BL program makes a statement. With people on both sides of the debate, Mass Business Blog wants your opinion. Do you have any stories or reactions to this program? Please share your thoughts on social media (and tag us so we can respond!) or write your comments below. Community conversations matter.

The Push for a Graduated Income Tax in Massachusetts

By Mass Business Blogger August 13, 2015 February 14, 2018 Business, Economy, Politics

Raise Up Massachusetts, a coalition representing religious leaders, liberal community organizers, and unions, is advocating a constitutional amendment to raise income taxes on the state’s wealthiest residents. The proposal, which would affect those earning more than $1 million annually, would reportedly bring in additional revenue of up to $1.4 billion per year.

The Massachusetts Communities Action Network, one of the coalition’s co-chairs, has indicated that the additional revenue would be earmarked for education and transportation, two areas where a number of needs have gone unmet over the past decade.

Raise Up Massachusetts has previously lobbied the state legislature to raise the minimum wage and was successful with a ballot initiative that required employers to provide earned sick time to their workers. The constitutional amendment process, however, will take three years and will most likely face fierce opposition for anti-tax groups.

All Massachusetts residents currently pay a flat 5.15% income tax that will reportedly decrease to 5%. The “Fair Share Amendment,” as it’s called by its proponents, would raise taxes to 9% for those earning more than $1 million annually. The 9% rate would only apply on income over $1 million. Approximately 14,000 tax payers would be affected by the proposal, which comes at a time when legislators are renewing efforts to require those with higher income to take a greater responsibility in the taxation process. The “Fair Share” moniker comes from the fact that low and middle income taxpayers contribute more of their disposable income under a flat-rate system than the most affluent taxpayers.

Proponents say the increased taxes could fund road and bridge reconstruction, investment in the MBTA and other regional transit bodies, and education funding— particularly for early intervention and post-high-school initiatives. Since 2002, state funding for education has failed to keep up with inflation, resulting in cutbacks in many school districts.

Opponents say that the proposal, if passed, would drive wealthy individuals away from Massachusetts. Voters have previously rejected ballot initiatives to move from a flat tax to a graduated income tax rate. A 1994 vote defeated a graduated tax rate with a 9.8 top rate, while a ballot question to establish a graduated income tax in 1972 was also defeated.

Want to contribute to Mass Business Blog? We are now accepting guest blog submissions! Have a lead on a story you want to see us report? Contact us at editor@MassBusinessBlog.com.

Massachusetts Tanning Ban Has Teens Seeing Red

By Mass Business Blogger August 11, 2015 September 4, 2015 Business, Economy, Healthcare

Massachusetts legislators have initiated a push to make it illegal for teens under the age of 18 to use or operate tanning beds. A bill requiring tanning salon employees and patrons to be 18 or older, An Act Further Regulating Tanning Facilities, was passed without contest in the Massachusetts House last week. Ten states in the US have similar laws already in place, but the current campaign in Massachusetts has been met with some heated debate.

Tanning: A Well-Known Risk

There is no argument against the fact that sunless tanning under high-intensity UV bulbs has been proven to increase the likelihood of certain skin cancers. The risk for melanoma, the deadliest form of skin cancer, increases by 74% when individuals use indoor tanning beds. Studies show that nearly 30% of white female high school students use tanning beds, and 17% use them regularly. According to Senator James Timilty, co-chairman of the public safety committee, much of the UV exposure that leads to skin cancer is incurred in the childhood and teenage years. Diagnoses of melanoma have gone up 200% since 1973.

Requirements of the Tanning Ban

If successful, the Massachusetts tanning ban would require teens between the ages of 16 and 17 to be accompanied by a parent or guardian. Young adults under the age of 16 will need a “written prescription from a physician” in order to tan—a script not many doctors are likely to ever hand out. The contention surrounding the tanning booth debate centers on what many consider to be an overreach by the “nanny state.”

Under the current state law, teenagers between the ages of 14–17 must present a written copy of parental consent before they are allowed to tan. Adherence to this regulation is predictably inconsistent. Not only can teenagers forge a note from Mom or Dad, but many establishments may not even bother asking for one. If the proposed bill is passed into law, teenagers will need to bring their parents along with them if they want to sun themselves indoors.

Is the Massachusetts Tanning Ban Unfair?

There are those who feel the ban would be an overreach by the state, interfering with a parent’s right to determine what is best for their child. Proprietors of tanning salons have pointed to a potential loss in business as a reason not to pass the new restrictions.

Proponents of the ban claim that banning teens from using tanning beds is a necessary step for ensuring teen health. Is it essential for teens to have access to a luxury service that radically alters their appearance and introduces them to the cosmetic trends of adults? Supporters of the ban believe that setting stricter limits on teen access to tanning is the only responsible option.

Your Turn!

What do you think? Do you allow your teenager to use tanning beds? Why or why not? Comment below.

Will Aging Infrastructure Prevent Massachusetts Business Growth?

By Mass Business Blogger August 7, 2015 August 7, 2015 Business, Construction, Transportation

Massachusetts is known for its convoluted roadways and aggressive drivers. Its residents are no stranger to the aging infrastructure that transforms their daily commutes into heroic efforts of driving prowess and cunning. The roads are both difficult to navigate and dangerous to traverse— full of potholes and spans of structurally deficient bridges. Repairs are underway throughout the state on bridges, highways and tunnels, which only seems to add hours in detours and traffic as unsound areas are brought up to meet standards. While progress is being made, the work that has occurred has only made a small dent in Massachusetts’ transportation system woes, and is further affecting timely delivery of goods, commuting times, and the overall appeal of the state as a location to do business.

The New England Council, a business advocacy group, has expressed concern over the congestion caused by road construction, as these type of inconveniences are often a factor in whether companies stay and expand or leave a region. At the moment, 20 tunnel projects and over 250 road reconstruction and resurfacing projects have entered the design phase, according to the Massachusetts Department of Transportation. Whether these projects will occur, and when, is another story. If approved, these repairs would happen in addition to projects like the ongoing initiative to repair more than 450 bridges. Initially a $3 billion project, it is now predicted to cost a total of $14.4 billion by the time the statewide repairs are completed.

Massachusetts has been experiencing a notable increase in economic growth over the last five years, however businesses are concerned about the timely delivery of goods and services. In a fast-paced economy, meeting deadlines with a tight turnaround time is a key factor of success. Delays and detours ultimately affect the bottom line.

The difficulties commuters faced last winter, between impassable roads, service delays, and cancellations of the MBTA, has business owners worried about the reliability of their employees as well. Dilapidated infrastructure could potentially keep top job candidates from considering working in certain areas. Efforts are being made to overhaul the financial management of the MBTA, as a panel convened by Gov. Charlie Baker in April predicted that the MBTA’s revenue shortfall would total $560 Million by 2020 if changes are not made.

Although business and state leaders agree that Massachusetts’ infrastructure needs refurbishing, the means to pay for these improvements remains uncertain. Maintenance has been deferred multiple times due to lapses in funding, leading to obsolete equipment and crumbling roadways full of potholes. Gasoline taxes have traditionally paid for road and bridge projects, but voters have not approved an increase in the gas tax since 1993.

What do you think? Does the current Infrastructure impact Massachusetts business growth in YOUR sector or does it simply add to the Old England charm?

Category: Business