As the cost of college rises, a Federal Reserve Bank economist said Wednesday, the necessity of obtaining an advanced degree for earning potential has contributed to Boston’s income inequality — ranked most unequal in the nation last year by the Brookings Metropolitan Policy Forum.
“I think the biggest disparities that we’re facing in our economy right now are between the outcomes that we can achieve as someone with just a high school education or less as opposed to the outcomes you can achieve with a college degree or an advanced degree,” Mary Burke, senior economist at the Federal Reserve Bank of Boston, said at a breakfast event.
Boston and New Orleans “led all other cities with a similar level of inequality,” according to the Brookings analysis, which found inequality is increasing in large American cities.
Massachusetts, which has experienced a prolonged post-recession recovery, is running into “barriers” associated with slow labor force growth and smaller increases in productivity, Burke told attendees at the Economic Outlook Breakfast hosted by Santander Bank and the Greater Boston Chamber of Commerce.
Without international migration, Massachusetts would be losing population, according to Burke. She said, “They come in to get jobs, so they’re boosting our labor force, which needs boosting.”
The Fed economist said the state’s gross domestic product is projected to have a small increase this year.
“Projected growth rates for Massachusetts for the first half of 2017 are quite modest — 1 percent growth or less, and that’s much lower than the average growth rates we’ve seen in the past couple years,” Burke said.
Massachusetts budget writers have projected state tax revenues growth is about to accelerate, rising 3.9 percent in fiscal 2018 which begins July 1. State budget writers have repeatedly readjusted spending plans over the years as revenues failed to keep up with expenses and optimistic revenue guesses.