New Hampshire has enjoyed a strong economy in recent years, which is reflected in the high incomes of many residents. The question is how to sustain a vibrant economy going forward and ensure that the wealth generated by this extends to a greater number of people.
Despite NH’s high median household income, which was estimated at $73,381 for 2017, around one in three households have annual incomes of $50,000 or less; about one in five households scrape by on less than $35,000 in annual income; and around 100,000 Granite Staters lived in poverty in 2017 (the poverty level is $12,752 for an individual and $19,730 for a family of three with one child).
Of those in poverty, about 26,000 were children. That’s approximately one in 10 NH children. Recent estimates from the U.S. Census Bureau’s American Community Survey suggest even higher levels of poverty for children in some NH counties. While the margins of error from the small sample sizes of survey data make the exact numbers difficult to pin down, the county estimates range as high as one in five children in Coos County between 2013 and 2017.
So the benefits of the strong economy have not reached all Granite Staters equally. At the same time, much of the job growth between 2008 and 2016 in the state has been in relatively low-wage sectors.
The three industries with the highest job growth were health care and social assistance, administrative and support services, and accommodation and food services. All offered average wages at least slightly below the statewide private sector average weekly wage of $1,043 for 2016, with accommodation and food services offering an average weekly pay of only $387.
Estimates suggest that wages of low-income Granite Staters have only recently started keeping up with inflation, and many workers with low-wage positions are likely still in precarious financial situations after years of falling behind the cost of living.
A 2017 survey of the economic well-being of U.S. households conducted by the Federal Reserve Board of Governors found that four in 10 adults could not cover a $400 unexpected expense, such as a car repair or health emergency, without borrowing money or selling an asset. While these are national statistics, it indicates that too many of our friends and neighbors face challenges to building savings that would offer even this limited amount of economic security.
As economists increasingly caution that the U.S. economy will likely slow this year, and may potentially experience a downturn in the near future, now is the time to bolster the systems and structures that will let NH keep its residents and economy on solid footing moving forward.
Expanding Opportunity
New Hampshire’s workforce challenge has been an ongoing constraint on the state economy, and the situation is expected to worsen in coming years. Emphasizing investments in education, health care, and worker supports can play a role in addressing the current workforce challenge and producing economic benefits.
Greater educational attainment contributes to increased earnings for individuals over their lifetimes.
Efforts to make higher education more affordable for families will help students achieve their goals and reduce the level of debt they carry forward, which then enhances their future ability to buy homes and build personal savings.
Access to health care allows individuals to address health needs as they arise. Strengthening the state’s health care system would ensure that more residents have access to health care. Expanding access to mental and behavioral health services, in particular, will help address the ongoing substance misuse crisis, which is having dire effects on families and communities.
In addition, expanding access to family supports such as paid leave and affordable child care would help caretakers maintain their income and participation in the workforce. Expanding access to opportunities and enhancing the health and well-being of residents will contribute to increased economic security at the individual and family levels, and provide benefits to the broader economy. And to ensure that NH’s children are well prepared for life ahead, investment in their education, health, and welfare will enhance their ability to succeed.
The State Budget’s Role
The state budget provides a framework for how NH will meet today’s needs and challenges while building a strong foundation for the future. Already months in the making, the most public portion of the budget process will kick off with the release of the Governor’s budget in mid-February. This is the fiscal year 2020-2021 State Budget, which will begin July 1, 2019 and conclude June 30, 2021. In a time of economic growth, this budget provides an opportunity to bolster the level of public investment in areas that will contribute to greater economic opportunity and prosperity.
AnnMarie French is executive director of the NH Fiscal Policy Institute, an independent nonprofit, nonpartisan public policy research organization based in Concord. Learn more at nhfpi.org.
Current Issue - April 2024