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Charles Arlinghaus: New Hampshire has sunk to the economic bottom


RECENT COLLEGE graduates and others trying to decide whether to commit to New Hampshire for the long term have every reason to leave and few reasons to stay. I hope that by now it is universally accepted that New Hampshire’s prospects are, at best, mediocre.

What seems increasingly likely is that those of us hoping for mediocrity are pie-eyed optimists. Things are bad, and the state is losing pace. States don’t become backwaters actively. The rest of the world just passes by lackluster states while they go along pretending everything is fine. We’re pretending, doing little or nothing, and life is passing us by.

In the last week, the Pew Charitable Trust released data pointing out that recovery from the last recession is complete and robust in some states and pathetic in others. Guess which category we fall into?

Pew’s research service on state government policy, Stateline, found that “while all states have added jobs since their economies hit their nadir during the recession, some have added far fewer than others.” Pew went on to highlight 10 states with anemic growth of 5 percent or less. In this group, which might well be dubbed the Terrible 10, is New Hampshire.

Consider a recent college graduate thinking about where to start his or her career. New Hampshire is a pleasant spot and has much to offer. But what it has little of and little hope for is job growth. Why on Earth would you start your career by shackling yourself to one of the Terrible 10, the worst states in the country in which to hope to find a job?

The national average was growth of about 8 percent. But more likely, if you are just starting out, you want to go to one of the top 15 states, which all boast growth rates of at least 10 percent. Michigan’s growth rate of 11 percent is more than double New Hampshire’s rate of just 5 percent.

Did you ever think we’d reach the day when Detroit was the land of opportunity compared to the decaying former economic power of New Hampshire?

Actually, I grew up in Detroit. It’s nice to follow the remarkable progress that city has been making in recent years (jettisoning me might have been the spark it needed).

States across the country are doing things to attract jobs, to make themselves more competitive, to make their economies more dynamic. While they act and act often, New Hampshire is content to rest on its laurels.

A very long time ago (in economic terms), we were a robust, thriving economy. People moved here in droves. Jobs expanded here so fast that at times the labor force couldn’t keep up. Unemployment was below full employment and jobs went unfilled (a problem North Dakota now has because of the oil boom).

The experience colored us and changed the way too many people think. Too many policymakers had that vision burned into their retinas and have been very slow to catch up. These are not the 1980s. Our economy is not attracting thousands of economic opportunity migrants every year. We resemble Maine more than we resemble the land of milk and honey.

We are not the envy of our neighbors, as the Federal Reserve wrote about us 15 years ago. Instead, we are one of the Terrible 10, and the so-called New Hampshire Advantage is a mythological creature of the past.

The two worst measures that doom us are taxes and energy. When industrial users of electricity would have to pay more than twice the national average price for the privilege of being here, don’t expect them to show up.

On corporate taxes, we are better in some areas than others, but we are 48th in the Tax Foundation’s Corporate Tax Index. Very high corporate taxes coupled with ridiculous energy rates weed out an awful lot of jobs.

While we stagnate, other states are making an effort to improve their position. States all around us are lowering corporate tax rates in an attempt to get out of the bottom 10. In contrast, even a pathetic little cut in our business taxes is controversial here.

Gone is the time when we needed to preserve a New Hampshire dynamism. Now we have to try to figure out how to create one. Mediocrity is something we can hope to achieve in the future. In the meantime, we are stuck in the Terrible 10.

Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.


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