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Economist: N.H. is growing well, but shortage of workers will become an increasing problem

Last modified: 11/21/2015 1:04:43 AM
Economist Dennis Delay grabbed the third rail of politics with both hands Friday during a presentation before the Greater Concord Chamber of Commerce, saying good economic times are coming our way but that extending them will require more immigration, including immigration from overseas.

Delay’s comments came in response to questions after he had presented projections that central New Hampshire will have a 9 percent growth in jobs through 2025, but will see a 6 percent decline in the workforce population during that same period, due to a shrinking supply of young people. The pattern is similar throughout New Hampshire.

One solution to what is sometimes called the “silver tsunami,” referring to the hair color of New Hampshire’s aging population, is to lure younger people from other states and other countries.

“We’re going to be better off if we let more people in,” said Delay. About 5 percent of New Hampshire is foreign-born, which Delay called “pretty low.”

As an example, Delay noted that parts of the Midwest are working harder to deal with their aging population.

“These areas are really trying to become more immigrant friendly. That’s something we should take more seriously in New Hampshire,” Delay said. “Immigrants are more likely to be of working age than the native population.”

Of course, there’s another solution he told the crowd: “You could create more children, and in 18 years you’d have a worker.”

The aging population is not affecting all of New Hampshire evenly, he added.

“If you’ve got a property that’s pretty close to the interstate, that’s a pretty hot market, but if you go two towns over, there’s nothing going on. That’s a very different pattern than what we saw in the ’70s, ’80s, ’90s,” he said. “There’s a lot of desire to be very close to the major transportation networks.”

“There are a lot of smaller towns . . . that are starting to get very concerned about this pattern of growth, the fact that their population is getting older with the prices we have to pay for real estate. . . . Some are really starting to get concerned about who’s going to man the volunteer fire department,” he said.

In an interview after the session, Delay noted that immigration faces a problem of perception.

“Politicians have a fundamentally wrong idea of how the economy works. They think it’s like a fixed pie – if somebody takes a slice then there’s less for everybody else,” he said. “It’s actually like a book club, like a bowling league – the more people you have, the more there is for everybody.”

Delay’s talk was the centerpiece of the chamber’s annual Economic Forecast Luncheon, held at the Grappone Center before well over 100 people.

Much of his talk was upbeat, as he pointed to evidence that New Hampshire has fully recovered from the Great Recession and is heading into a period of growth, in part because the cost of energy, while high compared to the rest of the country, is less than it has been in recent years.

Construction of housing also looks set to take off, which Delay said is important because it’s the one major component of the state’s economy that has not recovered from the bad years of 2008 through 2011.

Delay said the most pressing need was for multi-family housing to meet the need for more rentals. The supply is so far behind demand that even during the recession, average rents in the state did not decline, which is startling when compared with house prices, which fell by 25 percent from 2004 through 2012, before starting to grow again.

The situation also looks better for workers, although not necessarily for bosses, because the low unemployment rate – 2.7 percent in Concord and 3.3 percent statewide – is likely to raise wages.

One interesting statistic Delay presented was the ratio of people who quit jobs to people who are forced to leave jobs, due to bankruptcies, layoffs or being fired. This year, half again as many quit a job as are forced to leave, whereas in the depths of the recession that ratio was roughly reversed.



(David Brooks can be reached at 369-3313, dbrooks@cmonitor.com, or on Twitter @GraniteGeek.)


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