Cambridge Boasts Low Unemployment Rate As Rest of State Hits Record Joblessness

Despite Massachusetts reporting the highest unemployment rate in the country last month, Cambridge has seen a relatively low rate compared to the rest of the Commonwealth.

The U.S. Bureau of Labor Statistics reported last month that Massachusetts had an unemployment rate of 17.4 percent. In Cambridge, however, the unemployment rate sat at 10 percent.

Lisa Hemmerle, the economic development director for the City of Cambridge, said this discrepancy is largely due to the types of industries that employ the city’s labor force.

“Unemployment in Cambridge is low compared to other Mass. cities and towns,” she said. “We feel that that's because Cambridge has a relatively low number of workers in the idled occupations.”

The “idled occupations” — those most heavily impacted by the coronavirus pandemic — include jobs in the construction, entertainment, retail, and services industries. In Cambridge, around 11 percent of workers make up the idled occupations, compared to around 22 percent of workers in the Commonwealth.

“Relatively few folks around here work in jobs that are laid off or furloughed due to the COVID-19 shutdown compared to the state as a whole, so that kind of insulates us a little bit,” Hemmerle said. “There are many more employees in occupations such as education that are idled but more likely to continue to receive their salaries.”

Economics professor Richard B. Freeman said another statistic to examine when assessing the pandemic’s impact on the Commonwealth’s labor market is the employment-population rate: the ratio of the civilian labor force employed against the total working-age population.

“Mass. has middling low but far from [the] worst employment-population rate, at least as of May,” Freeman wrote in an email. “It is around 15th in that measure, higher than in the lowest unemp[loyment rate] state of Kentucky.

Freeman also noted that Massachusetts’ relatively high rate of unemployment is largely due to the prevalence of the state’s tourism industry.

“Mass. is one of [the] top ten states in foreign tourism, which has disappeared completely,” he wrote. “And, of course, our state and Cambridge depend critically on students and their spending, which has collapsed, at least off-line.”

“The leading parts of [the] economy were largely people-driven services and the virus destroyed much of that business,” he added.

Freeman also said the Commonwealth’s slower reopening has allowed it to better control the virus than other states that opened much earlier.

“The shutdown and slow reopening meant slow recovery in May, June and probably July but got us ahead of most other states in controlling the virus — which are suffering a lot for their short term gains in May and June,” he wrote.

Freeman said he anticipates that if a vaccine becomes available, Massachusetts will return to full employment faster than most other states. He noted, however, that the entire country must recover in order for the state to reach full employment.

Hemmerle said the city is supporting small businesses through grants and paycheck protection loans to help mitigate the impact of the economic shutdown in response to the pandemic.

“$67 million in PPP loans were made to Cambridge businesses, allowing them to retain a reported 21,964 jobs (those are all jobs retained by these Cambridge businesses, though the jobs are not all in Cambridge),” Hemmerle wrote in an email.

Additionally, the city announced a Small Business Grant Program, which provides grants of up to $10,000 to assist with rent, utilities, salaries, and cost of goods, and a Cambridge Redevelopment Authority zero interest loan program, which provides loans of up to $15,000.

“The City of Cambridge and Cambridge Redevelopment Authority awarded $3.6 million dollars in grants and loans to support small businesses,” she said. “We've really focused on helping our women- and minority-owned businesses, and more than 65 percent of those recipients are women-, minority-, or women-and-minority-owned businesses.”

“We're pretty excited about that — to be able to help those small businesses make it through this really unprecedented episode in history,” Hemmerle added.

—Staff writer Taylor C. Peterman can be reached at taylor.peterman@thecrimson.com. Follow her on Twitter @taylorcpeterman.