The Great Recession and subsequent sluggish recovery have widened the gap between economic “haves” and “have-nots” from the local to the global level, a panel of economists said this morning.
Raymond Torto, Carol McMullen and Alan Clayton-Matthews told more than 200 business leaders at the AIM Executive Forum in Waltham that overall economic stability in the U.S. and abroad masks wide variations in the outlook of cities, states, towns, nations and individuals.
“If the head is in the oven and the feet are in the refrigerator, then on average, you are warm,” said McMullen, a veteran private investor and corporate board member.
She said that while the national economy has been growing at a steady two-and-a-half percent annually, some absolute levels of economic activity remain near recessionary levels. And the economic bifurcation is global, she said, warning that Europe stands at the verge of another recession as leaders on the continent dither over its debt problems.
“It could get really ugly,” she said.
Clayton-Matthews, a professor of economics at Northeastern University, continued the feast-or-famine theme by saying that Massachusetts is performing better economically than the nation as a whole, but still finds pockets of strength and weakness within its own borders. He noted that while metropolitan Boston lost 4.3 percent of its job base during the recession, the decline in Springfield reached 5.4 percent. The jobless rate in cities such as Springfield, Fall River and Lawrence remains almost twice the statewide average.
“It has been an extremely unequal recession,” he said.
“For communities that have been tied in with the technology sector and that have an educated work force, they have not had a recession at all. They are doing fine.”
Torto, Global Chief Economist at CB Richard Ellis Group, said that commercial real estate is likewise winnowing strong markets from weak ones and well-capitalized developers from smaller ones. He said the growth of biosciences and technology companies has remained concentrated in the traditional strongholds of Cambridge and Boston instead of spreading throughout the state.
“It’s where they want to be,” Torto said.
He maintained that the private sector nationally remains reluctant to invest its cash reserves to create jobs because business executives lack confidence in the ability of governments in Europe in the United States to resolve their debt and deficit issues.
All three members of the panel, moderated by WBZ radio business anchor Anthony Silva, agreed that Massachusetts faces a significant risk in Europe because 25 percent of Bay State exports go to the continent.