Yes, we hear positive news: Moderna is adding hundreds of positions here, for example, and Lego is moving its North American headquarters to Boston from Connecticut — all to capitalize on the region’s talent. Employers, in general, are still adding jobs, per the latest payroll count, and the state’s coffers remain flush with cash, a record $7 billion sitting in the rainy day fund.
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But how much longer can the good times last? The Boston area is feeling Big Tech’s retrenchment, with jobs evaporating by the thousands. A new income tax surcharge, known as the Fair Share Amendment (aka the millionaires tax), has resurrected the dreaded specter of “Taxachusetts.” And the state Legislature faces leaner times ahead, with the latest projections calling for a slim 1-percent increase in state revenues in the fiscal year that starts in July.
Then there’s that census data, in black and white, showing an exodus amid the widespread adoption of telecommuting and hybrid work. Yes, Massachusetts had lost migrants to other states before the pandemic. But those losses have accelerated significantly.
Hao understands what’s at stake.
“There’s a high sense of urgency,” Hao said in an interview just hours after being sworn in last week. “We can’t be complacent. We can’t rest on our laurels.”
She rattled off some of the challenges: “The weather’s not for everybody. It’s expensive here to do business. It’s expensive to live here. It’s expensive to buy a house. I think this Fair Share act [hurts the] perception, that’s added one more thing to that list. [And] so many more companies have gone to ‘remote only.’”
Hao comes to the job with a background in business, not government. Her recent career has primarily been in private equity, much of it with Boston-based PE giant Bain, and she later worked as a top executive at PillPack before the pharmacy startup was acquired by Amazon. She was at local PE firm Cove Hill Partners when Healey called.
She has traded her hoodies and jeans for business suits, and “Yvonne” for “Secretary Hao.” That’s the easy part. The real work begins now: meeting with executives and trade associations in and around Boston and across the state. Her first stops include mingling at MassBio on Wednesday, where Healey spoke, and Associated Industries of Massachusetts, where the governor speaks on Thursday. Hao will also team up with Lauren Jones, Healey’s new labor secretary, to help ensure the state’s talent pipeline fits with employers’ needs.
17leung – Yvonne Hao (center) served as the chief operating officer and chief financial officer of PillPack before it was acquired by Amazon for $750 million in 2019, and this photo shows many of her former teammates who were there at the time. She is pictured at the online pharmacy’s office in Cambridge with (left to right), Geoff Swindle (chief business officer), TJ Parker (co-founder and CEO), Colin Raney (chief marketing officer) and Elliot Cohen (co-founder). Colin Raney
On that last point: Hao takes over at a time when the demands of this high-profile government job are shifting a bit. Like her predecessors, Hao will need to encourage companies that are here already to stay, and to grow — and she’ll work to recruit new employers into the fold.
But remember the 1,100? Hao knows she also has to focus on retaining and attracting talented workers, not just employers. The state’s shrinking workforce poses a fundamental threat to the economy here. Hao wants to reverse that trend.
Hao looks to the nearly half-million young people who attend college and graduate school in Massachusetts every year as one potential solution. She wants to see fewer leave after their studies are done. “We have the world’s best young talent coming through our state,” she said. “How do we harness that?”
Another plus that she cited in our favor, particularly in the Boston area: the close-knit nature of the business community. Everyone knows everyone, or so it seems. That’s not the case in Silicon Valley, or in New York — places where she lived before moving to Massachusetts in 2010.
State law requires Hao’s office to produce an economic plan every four years. The next one, Hao said, is due in at the end of the year. She plans to use the exercise as a springboard for a broad discussion about how to stoke the state’s various sectors and regions, and ensure good jobs are available at all skill levels. For now, Hao also oversees housing policy, though Healey eventually plans to shift housing into a newly created separate secretariat. Even after the org chart’s reshuffling, it will remain a priority: There’s perhaps no greater threat to the state’s competitiveness than the high costs of renting or buying a home here.
The ideas are already coming, fast and furious. JD Chesloff, head of the Mass. Business Roundtable, just penned a column with the online CommonWealth magazine calling on state leaders to invest in affordable housing, public transit, childcare, and to align their workforce development efforts with high-growth sectors. Greater Boston Chamber of Commerce CEO Jim Rooney covered similar topics when he spoke to members on Tuesday — as well the need for some tax reform, maybe mitigating some of the millionaires tax’s impact.
The situation isn’t dire in Massachusetts by any means. But economist Donald Klepper-Smith is a fervent follower of the census data, and the numbers aren’t looking good: 1,100 people a week, he said, represents a profound statement. People, jobs, state revenue: As he sees it, they all go hand in hand. Klepper-Smith likes to talk about “the three T’s” — temperature, taxes, traffic. Depending on your perspective, Massachusetts suffers in all three categories. (He knows of which he speaks, having sold his Vineyard home recently and settled into semi-retired life in Hilton Head, S.C.)
Hao realizes what she’s up against. Ask her about her top priority. It’s not convincing the next Lego to move here.
“Job number one,” she said, “is not to lose anybody.”
Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.
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