JAN. 16, 2024……A new session means renewed priorities — and for the business community, a balancing act of celebrating economic progress while also addressing major concerns across the industry.
Brooke Thomson, CEO of Associated Industries of Massachusetts, has been with the business group for five years and leading it for just over one year. AIM is the Bay State’s largest business association and represents more than 3,400 employers across 150 different industries. Most recently, AIM released its 2024 Business Confidence Index, which suggested that Massachusetts business owners ended 2024 more optimistic about the scope of the industry than they began.
In a recent conversation with the News Service, Thomson talked about the major challenges businesses are facing in Massachusetts, AIM’s policy priorities for the new session, and how she expects business confidence to trend in 2025.
This interview has been edited and condensed for clarity and length.
Q: AIM’s 2024 business confidence report suggested that business owners are more optimistic about economic growth than they were at the beginning of the year — but there’s also a more pessimistic narrative coming from a number of industry groups about economic problems leading to outmigration. How do you view that nuance between the two outlooks?
A: What we saw throughout 2024 was this up and down, which we always say is reflective of uncertainty. What’s encompassed in uncertainty? There’s some optimism and there’s some pessimism, and certainly since COVID, what we’ve seen is, for our businesses, it’s more taking a look in the short-term how things are going and making decisions and developing strategy, and a lot less [an] ability to plan outward for long periods of time. Housing, energy costs, health care costs, transportation — these problems still remain. I think the optimism comes from the fact that I see a real commitment with everybody to come to the table to try to address [them]. Where the concern still lies is, are we going to continue forward on this path, and how long is it going to take us to get where we need to be to continue to see that growth?
The issue is affordability. I’m acutely aware of this. I grew up in the Midwest — I’m that story of somebody who looked at all the amazing colleges and universities here in Massachusetts, and said, “I want to go there.” I went to Mount Holyoke College, I really fell in love with Massachusetts [and] decided after graduating that I would move into Boston [and] go to law school at Northeastern. I’ve lived here longer than I lived there. I’ve got two girls, I’ve decided to raise them here, to really invest in what Massachusetts has to offer. I worry sometimes that some of the trends we’re seeing about high costs [and] affordability are impacting other people, like me 25 years ago, [and] their ability to do what I did. As somebody who represents a business organization, that’s concerning, because that’s your talent, that’s your pipeline, that’s your workforce, that’s your economy.
Q: As businesses prepare for federal tax policy to potentially change in months ahead, and Massachusetts’s business confidence index trails the U.S. index, how do you expect the confidence of business owners and employers to trend in 2025?
A: I think certainly in the first quarter with the transition in federal administration, it’s going to be a lot of up and down. Continued uncertainty. We’re all sort of hypothesizing — what is this going to mean, whether you’re talking about tariffs, whether you’re talking about federal resources? I think Massachusetts last year alone got $43 billion in federal resources — so if you’re a business, and most businesses have some sort of investment flowing from the federal government, you’re saying, “What is that going to mean under a new administration? Are they going to reprioritize?” I certainly think it’s going to take Q1, maybe even in Q2 to see where the new administration’s priorities are. As a result, I think you’re going to see a continuation of what we have seen, which is businesses holding onto capital, holding off on big-scale investment, right until they have more of a sense of what the short- and long-term climate is going to look like.
Q: What are some policy priorities this session you’re hoping will address industry challenges?
A: [There are] five key areas that we’re going to be focused on. Economic growth is a very broad goal — a lot of times you hear the word “competitiveness” attached to that. At its core, [it means] making sure Massachusetts is a place where businesses want to stay, grow and locate. We’ve got to also attract industries that maybe aren’t here right now, and that’s never been more difficult with the affordability challenges. It’s about having a business-friendly environment, ensuring that we are being very conservative and intentional when we’re talking about additional costs [and taxes] for businesses. We have states [like] Tennessee [and] Texas that are bending over backwards to attract the folks that have been here for generations. We’ve done a great job — you saw at the end of 2023 we had the tax cut package, and then the economic development bill — but it will be incumbent on all of us to make sure that we maintain that stability, while keeping that theme of, “Hey, businesses, we want you to invest here.” We know that’s really done through policies that send those signals out into the ecosystem.
Next in line is workforce. That’s education, training and how we’re making sure that we have that workforce. We saw the latest data come out from the Census Bureau that our population is declining, but not at the rate it was declining the last couple years. The alarming number is really those 24-to-31-year-olds who are [leaving], and that’s where the affordability challenges come in around housing, transportation, health care, energy. How can Massachusetts be creative in order to be competitive? It’s not going to be Tampa — it’s not going to be 80 degrees in January. It’s not going to be Nashville — you’re not going to get a 3,000 square foot house for $200,000 and you’re going to have some traffic congestion. But if we’re creative in the places where we can be, we can really compete with some of these other states.
We’re very focused on economic inclusion, because it’s a competitive advantage for our employers. And the last two would be energy and transportation and infrastructure. On the energy side, we’re at the end of the pipeline. Because of climate change, we have real demands on our system, and we’re working to try to transition to cleaner, more reliable energy. All of that is extremely time consuming and costly, and it requires strategic, thoughtful investment in how we’re going to get there. What we’re doing here at AIM — and why this is a policy focus for 2025 — is [asking]: when we have a business climate where there’s already really high costs, and we all have a universal goal of meeting our climate goals, how do we transition the system in a way that doesn’t overburden our businesses or our homeowners financially, so they say, “I have to move out of Massachusetts?” On transportation and infrastructure, we recognize that we have to address some of the major issues on transportation in and around Boston — but we have to represent the cities and towns that are elsewhere who have their own transportation and infrastructure challenges. AIM’s approach is really looking at it from a total state economic development perspective and saying, “How are we using the existing resources that we have right now to make the changes we need to make to keep every region of the state functioning regardless of whether you use a car, you use the MBTA, you take a train, you take a bus?”
Q: What does that term “competitiveness” mean to you?
A: Competitiveness, for me, is really [about] keeping Massachusetts strong. That’s making sure that the things that drew me to Massachusetts as a kid from the Midwest are the things that [draw] people who are somewhere across the ocean looking at coming to the United States, somebody that’s down in Texas, saying, “Where do I want to be? Where do I want to raise a family? Where do I want to work?” Competitiveness is affordability. If we can’t keep the talent that makes us so great here, everything else really isn’t going to matter. If Secretary Hao was here right now, she’d say, “Brooke, but look at how far we’ve come!” And I think we really have, but when I travel to [other states], when I talk to my counterparts at the other state Chambers, [they talk about how their] Legislature[s] [are] looking at policies to try to draw more businesses there, looking to try to cut business costs. They are coming for us. The benefit of being as good as we are is we’ve set a foundation that other states want to emulate. It’s a process that [can] take decades, and so we’ve got to follow through on the policies that we’ve already set a really strong foundation on.
Q: The governor’s version of the FY2026 budget will be filed soon. Is there anything you’re hoping that it adjusts for in terms of economic struggles or concerns ahead?
A: AIM is always focused on making sure of a few things. One, we don’t want to see any new broad-based tax increases. We also want to see continued investment in the Stabilization Fund. And then with the transportation challenges that we have, we are looking mindfully at the budget to see that it correlates with [recommended] investments and utilizes those existing [surtax] resources that we have.
Q: Aside from the affordability aspect, is there one overwhelming concern that you hear about from your members?
A: Workforce. We still continue to see, even with a really low unemployment rate, that a lot of our employers either have open positions or they have positions where, if they had a wider pool of folks to choose from, they would make different decisions. We do a lot in the recruitment space. What we see time and time again — that is somewhat new post-COVID— is employers will get a potential hire, they’ll have the interview stage, the person will seem really great, they’ll do the background check, they show up the first day, and then they never show up again. It’s something that was completely unheard of before COVID. The benefit is to pull the data that we see from this happening while also [asking] what about the recruitment process maybe can be changed so that we can prevent this from happening. Is it a training situation? Is it that we’re not finding the right fit? So that’s a place where we’re able to draw data, but also provide services, but it’s something that doesn’t matter if you’re a manufacturer, doesn’t matter if you’re a health care system — [businesses are] just not getting the candidates they need. That’s why one of the major issues we’re going to focus on this year is workforce and education, because there is something that’s missing to create that nexus that prevents this problem from growing.
