A core argument of Romney’s presidential campaign is that he knows how to create jobs based on his career in finance. As governor, Romney faced his first test in applying his business background to a slow-growing economy — and data show that the results were unremarkable.
Massachusetts was one of just four states that by the time of the financial crisis still had not recovered all the jobs they had lost during the 2001 recession. And, as Romney’s opponents have pointed out, the state ranked 47th in job creation during his term.
The parallels between Massachusetts then and the country as a whole now point to the same central problem that has dogged the U.S. economy the last three times it’s climbed out of a recession: The recovery hasn’t created enough jobs.
Many state policymakers and economists say Romney struggled to apply his business expertise to Massachusetts’s problems during his tenure.
“There was this tremendous sense of a lost opportunity. Nobody questioned this was an incredibly capable man,” said Stephen Crosby, who was secretary of administration and finance for the two Republican administrations before Romney’s. “If he put his skills to work, in a really dedicated and thoughtful and appropriate way, there was a sense that he could’ve had a much greater positive impact.”
Romney’s campaign says he curbed the state’s unemployment problem.
“As governor he confronted an economy very similar to Obama’s economy: high unemployment and no job creation,” Romney spokeswoman Andrea Saul said in a statement. “Under his leadership and economic reforms the Massachusetts unemployment rate went from 5.6 percent to 4.7 percent and the state had a positive record of nearly 50,000 new jobs created.”
But Andrew Sum, a professor of economics at Northeastern University, says the unemployment rate fell only because people were leaving the workforce in droves during Romney’s term. Just one state had a bigger drop in its labor force during the same period, according to Sum — that was Louisiana, which was hit by Hurricane Katrina in 2005.
“There was not one measure where the state did well under his term in office. We were below average and often near the bottom,” said Sum, who is also the director of Northeastern’s Center for Labor Market Studies.
A dot-com bust
When Romney entered office in January 2003, Massachusetts was shedding jobs at a faster rate than the country as a whole. The state had ridden the dot-com boom to greater riches, but when the bubble burst, it struggled to stem the losses.
The state had lost about 158,000 jobs, or 4.7 percent of its workforce, from the first quarter of 2001 to the month Romney took office, according to data from the Bureau of Labor Statistics.