There are two major challenges straining NH’s economy and limiting our potential for growth: a low unemployment rate and lack of available workers, along with an insufficient supply of affordable housing for people with low and moderate incomes.
These two topics featured prominently in a keynote address about the near-term challenges facing the state and its economy. Dr. Jeffrey Thompson of the Federal Reserve Bank of Boston’s New England Public Policy Center gave the speech at the NH Fiscal Policy Institute’s sixth-annual conference.
The presentation (available at nhfpi.org) also addressed how NH might position itself within the economy of the future.
Thompson pointed out that as the economy continues to evolve, many jobs of the future will be different from those we know today, and the question for NH is how well will it adapt and proactively position itself going forward.
Considering NH’s longer-term needs, Thompson highlighted four themes with implications for residents’ future prosperity and the state’s economy overall.
Metropolitan areas across the country have been responsible for the vast majority of new jobs created during the economic recovery, with Massachusetts leading the New England region.
New Hampshire has benefited greatly from its close proximity to Boston, with NH residents commuting south for work and new businesses moving to NH as a more affordable option. As the importance of metro areas as employment centers increases, the condition of NH’s roads and transportation system will become even more important to residents and
However, NH is far from competitive when it comes to infrastructure. New Hampshire ranked second among the top 10 states with the worst infrastructure, according to a 2018 analysis by CNBC and McKinsey, a global consulting firm. Many of NH’s roads, bridges, and water systems have long suffered from neglect and lack of resources. In each case, pushing the necessary fixes off further into the future will only increase costs in the long term.
Cost of Higher Education
Student debt is a burden for college graduates nationwide. New Hampshire ranks first in the highest percentage of college graduates with student debt, and fourth in the level of student debt, with an average of $34,414 in 2017.
While a number of factors contribute to this amount of debt, it’s worth noting that NH also ranks last in the level of public investment in state universities and colleges. In fact, a comparison of college affordability rankings for public institutions across New England finds NH the least affordable across all categories.
As the Granite State strives to increase the number of residents with advanced degrees and credentials, it should take steps to reduce costs so graduates can redirect their resources to buying homes and contributing to their local communities.
New Hampshire’s lack of housing supply is both a short- and long-term challenge. It will require a mix of increased public and private investment as well as policy changes to speed the rehabilitation of existing stock and boost construction of new housing that is affordable to a range of income levels and residents of all ages. Easing the pressure in the housing market is a critical component to NH’s ability to attract new residents and address its workforce challenges as well.
The demographic shifts facing NH will continue as the population ages at a rapid pace. Attracting new residents and young families to sustain the workforce and keep pace with retirement rates will be essential in the years ahead. New Hampshire owes much of its recent net migration to new Americans and foreign-born immigrants who contribute to the state’s workforce and economy.
As the state looks to the future, it should be welcoming to all and seek to sustain a vibrant economy that lets all Granite Staters prosper.
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.