Is the ‘NH Advantage’ dead?
The state has a shortage of workers that must be addressed
The presidential race has masked a more important policy issue. New Hampshire is entering a transition period demographically.
What we have known as the “New Hampshire Advantage” is dead, and we must create a new competitive advantage. The choices we make as a state over the next five to 10 years will shape our community for the rest of the century. The public and private sector have a lot of work to keep us as a top or even an above-average state.
The easiest benchmark is to look at per capita income. In 2014 (the most current year available), New Hampshire ranked seventh in the nation for per capita income. We’ve drifted down on the list from sixth, while Massachusetts took the that spot. We used to be even higher during the 1990s and the 2000s, so we have lost ground.
Understanding why is more complicated than a single index. Simply said, we lack the “inventory” of good workers to allow business to expand.
This phenomenon has existed for five to 10 years. To build more workforce, we have to educate our own – a new paradigm for the state.
Workforce development is all about the economy. Higher earnings by families lead to greater prosperity. This downward pressure is a result of subtle demographic trends that takes years to correct.
New Hampshire’s climb to become a top state in the 1980s and 1990s was through what was called the “New Hampshire Advantage.” Our most productive and brightest would graduate school, see the world, and then return to raise families during their highest-earning potential years. People from Massachusetts, New York and New Jersey moved to the state. They came highly educated, and businesses flocked to the state to have access to this cluster of workers.
But by the 2000s, positive net migration stopped, and the legacy “New Hampshire Advantage” ended. The world became more competitive, New Hampshire’s business climate was not as diversified and college graduates moved away.
We also saw the creation of an urban-rural New Hampshire, as coined by Dr. Ross Gittell, the economist and chancellor of the Community College System of NH, which created a new set of dynamics to consider.
In the last five years, we have seen some positive net migration, but that dynamic will not counteract our aging population.
In short, we have to figure out how to make do with what we have. We have to figure out how to develop our own workforce with the population we have. To paraphrase a former secretary of defense, we must build the workforce with the people we have. We cannot rely on importing more educated talent so we have to expand our degreed workforce and close that skills gap.
The recent economic recovery has consumed our available and educated labor poll. When you look at the unemployment rate by educational attainment, you will notice our state’s employment rate of 3.8 percent. Our four-year college residents have an unemployment rate of 2.5 percent, while the high school-only graduates are near 8 percent.
That gap is staggering and is the key to unlocking more economic success.
More workforce needed
If there were a statewide strategic plan, workforce development should be at the top of the list. To the best of my knowledge, no organization has signaled workforce as a top priority, although many mention it among five to 10 other interest areas.
Why does a quality workforce matter? A shortage of workforce creates a chill on business expansion.
There’s more work to do in the K-12 space, and the university system and community college system are best poised to make a positive change by increasing the retention rates and throughput of students entering our workforce.
Employers can do more to look at less-experienced workers and being more flexible on degree types and level of degree attainment. A recent survey of job openings showed that employers are looking for an average of six years of experience. By employers being more open-minded about those who are switching fields with portable experience or taking students directly out of school, they can fill the positions they need.
There is also a possibility to increase education-employer pathways. The health field has a strong heritage of work-based learning through internships and residencies.
Accounting fields call for “apprenticeships” under CPAs, as do professional engineers. Advanced manufacturing is no different.
Fields that are struggling should look to develop these pathways and expand their co-ops and internships offerings.
New Hampshire has a shortage of workers, and there is no easy fix. We need to educate our workers and increase the throughput of our schools. Stay Work Play’s programming and the NH Charitable Foundation’s New Hampshire Tomorrow agenda are playing leading roles. Regardless, we have a lot of open jobs and New Hampshire needs to close the gap to remain competitive.
Jeremy Hitchcock, co-founder and former CEO of Dyn Inc., Manchester, is a member of the board of trustees of the Community College System of New Hampshire.