Economic woes don't justify radical change
Lawmakers can't fix what's broken
The New England Economic Partnership just released its latest economic forecasts for the New England states. Once again, New Hampshire is projected to lead the six-state region in employment growth and to maintain its low unemployment levels, currently the fourth lowest in the nation. The state also is among the nation's leaders in low poverty (lowest among the 50 states) and median household income (in top five). Over the last three decades the state has been transformed from an average income state with above average unemployment to a high income state with well below the average unemployment and the state has led the region in economic growth.
Much of state's economic success has been the result of rising levels of entrepreneurship and innovation in the private sector and rising levels of educational attainment and skill in the workforce. This has been supported by New Hampshire's public policies and communities that put the state in an advantageous position to attract and retain skilled workers, entrepreneurs and innovators.
Yet New Hampshire's economy does not operate in a vacuum. As the global and national economies went into a tailspin in 2008, the state suffered economic decline.
Still New Hampshire's decline was below the national average, and employment growth returned sooner and stronger in the state than the national average. The state continues to outperform the national economy on any standard measure of economic performance.
So what is broken in the state economy that needs to be fixed? What is broken is not the New Hampshire economic advantage. What is broken is largely beyond New Hampshire's and the state Legislature's immediate control. What is broken resides with national and global financial and housing markets and in corporate headquarters outside New Hampshire.
To radically change what we do in New Hampshire cannot be justified on the basis of our employment decline and revenue drop during the great recession. To dramatically change our policies that affect our quality of life such as health care, that affect education from early childhood education to public higher education, that affect workplace rules, and that affect our natural and cultural resources is not smart economic policy. It is reactionary in the sense of reacting to the immediate problems with the wrong diagnosis and then with not well-informed policy changes that dramatically change the economic landscape in the state.
Instead, what is good for the economy is basically what has worked well for the economy over the last three decades - maintaining our cost and tax advantages (compared to states we compete with for high technology and other well-paying industries such as Massachusetts and New York), investing in our quality of life including health care and natural resources, and investing in education to ensure rising skill levels and education of our workforce.
Many states are envious of New Hampshire's current economic position. Let's keep it that way.
(Ross Gittell is a professor of management at the University of New Hampshire and vice president and New England forecast manager for the New England Economic Partnership.)