Bay State boom a mixed blessing. Lots of jobs available, but many can't afford to live there

They seem to have little in common. Lloyd Morehouse, a soft-spoken man from Louisiana, drifted into Boston five years ago after hearing about its wealth of employment opportunities. But until last year, he stayed in homeless shelters and scraped by on welfare payments and odd jobs.

Lee Meadow, a marketing professor from Illinois, moved to eastern Massachusetts two years ago because his wife wanted to return to her native state. He quickly landed a well-paying position at the University of Lowell, a school trying to keep pace with its flourishing high-tech surroundings 20 miles northeast of Boston.

Despite their differences, however, Mr. Morehouse and Mr. Meadow have both discovered the bittersweet reality of Massachusetts' economic boom: They both found permanent jobs in the thriving economy, which has drained much of the state's slow-growing labor supply. But they also had to scratch and claw for affordable housing.

Their stories, like those of countless others in the state, reflect the volatile mix of two economic forces here -- a tumbling jobless rate and soaring housing prices.

Between 1982 and 1985, the state's unemployment rate dropped from 7.9 percent to 3.9 percent, tying New Hampshire's mark for the lowest in the nation. (And Massachusetts Gov. Michael S. Dukakis (D) is quick to point out that 8 percent of New Hampshire's labor force crosses the border each morning to work in the Bay State.)

The low jobless rate indicates the wealth and health of the area's economy. It suggests the mix of high-tech and service industries that other states envy. It shows that wages are up and the number of welfare recipients is down. And it helps explain why Massachusetts registered a $509 million surplus this year and why Boston could end the fiscal year with its first balanced budget in over a decade.

But that's only one side of the story.

``I could find work,'' says Morehouse, quietly describing how a nonprofit firm helped him transform from a drifter into a data processor. ``But that didn't guarantee a place to live.''

Indeed, housing and rental costs here have hit the roof. Between 1982 and 1985, for example, rents for two-bedroom apartments in Boston jumped an average of 68 percent -- to $863 a month, according to the Boston Housing Authority.

So even after Transitional Employment Enterprises Inc. helped Morehouse prepare for his new job, his toughest task remained. New development has pushed prices up while pushing out thousands of inexpensive rooming houses that once covered the city's South End. Morehouse, fortunately, found a rare opening in one of the 221 remaining rooming houses.

In the outlying areas, where Lee Meadow scoured the countryside for an affordable home, housing prices have leaped at about the same rate. Between 1983 and 1985, the average price of a single-family home went up 63 percent, according to the National Association of Realtors. By the end of last year, the median price was $144,800 -- second only to the San Francisco area, where in January the average home cost $150,000. (With bargain mortgage rates, a strong economy, and a limited supply of houses, prices here could rise another 10 to 20 percent this year, say most economists.)

``We really went crazy,'' says Meadow, recalling how he and his wife would track down possible leads. After 13 months, they ended up buying a place that was smaller and more expensive than their last home -- and 55 miles from his office.

Stories like this are scaring away many out-of-state workers just when they are needed most. The problem is the reverse of a decade ago, when the state was saddled with a severe labor surplus.

``Even three to four years ago, it was difficult to convince companies that they could use someone from Texas,'' says Michael Iandoli, an executive vice-president for Tech Aid, an employee search service whose business has climbed 40 percent since last year. ``Now they jump at the chance to hire people from out of state.''

The state's government may even get into the recruiting game. Several weeks ago, one state official suggested that an advertising campaign would help entice out-of-state professionals.

So far, the Massachusetts boom by itself has not attracted workers the way the Texas oil boom did in the 1970s.

``The significantly more expensive housing has got to be a deterrent,'' says Benjamin Chinitz, an economic forecaster with the New England Economic Project.

For now, employers are using creative financing and fringe benefits to sweeten the pot for high-level outsiders. And many companies are pilfering employees from their local competition.

For lower-level positions, some firms are tapping new labor sources -- like the elderly, the disabled, and the disadvantaged. That push has helped turn some of Governor Dukakis's pet programs into national success stories. Since October 1983, the Employment and Training Program has helped more than 23,000 welfare recipients find jobs.

But benefits are not trickling down to most poor people, says Lee Fremont-Smith, president of Transitional Employment Enterprises Inc. Even when someone like Lloyd Morehouse does find a job, she says, ``the wages haven't gone up to keep pace with . . . housing costs.''