Can New England regain the good jobs?
Recent trends toward recapturing manufacturing jobs are not pretty
Having gotten a master's degree in urban geography more than 30 years ago, I am drawn to regional differences. Choosing to live in the cold, dark North but routinely traveling to Sunbelt states prompts a regular comparison of the two. This winter’s electric and national gas utility bills definitely caught my attention. Some of this is weather-related and some of it is climate-related.
One of the most prominent things we hear and see is the “graying” of the population. New Hampshire, Maine and Vermont are among the “oldest” states. There are several initiatives to keep our young people here. It is all about jobs and opportunities.
My daughter works in D.C., while my son works here in Manchester for a tech company. But even he thinks about Portland, Ore., the Silicon Valley, Austin, Texas, and Raleigh-Durham, N.C.
In his 2012 book, “The New Geography of Jobs,” Enrico Moretti writes about the “Great Divergence.” He says, “the growing economic divide between American communities is not an accident but the inevitable result of deep-seeded economic forces. More than traditional industries, the knowledge economy has an inherent tendency toward geographical agglomeration.”
This is not new. New England benefited from waterpower, the cotton mills, Colt Manufacturing, war production, electronics along Route 128, then computers. But today we are not drawing those industries and jobs. The Research Triangle, Austin and Silicon Valley are the hotspots.
This economic yin and yang drains or weakens the Northeast (and other areas) to favor these tech centers. But beyond the economic impacts, “it is now beginning to affect cultural identity, health, family stability, and even politics.”
Moretti adds that the sorting of highly educated Americans into certain communities and less-educated Americans into others “tends to magnify and exacerbate all other social economic differences.”
Ideally, we here in the Northeast will soon figure out how to recapture at least some of the good manufacturing jobs we have lost. Recent trends are not pretty. While New Hampshire has recovered the 7,000-plus jobs lost during the Great Recession, some 60 percent of those jobs are lesser jobs (lower pay, fewer hours, fewer benefits).
Our utility costs have jumped, especially natural gas and electricity. We hear that our young workforce is not trained.
This latter point brings up a concern that our education system is not working.
Young people in America statistically could live to be 100, so why do we expect them to know what they want to do for a career at 18, or even 22? They simply are not ready.
This is where retired Gen. Stanley McChrystal's call for establishing a service year is right-on. He suggests one year between the age of 18 and 28. Military service would count, as would VISTA, the Peace Corps, AmeriCorps, etc.
There are not enough slots to accommodate the 4 million 18-year-olds each year, but the concept makes sense. It would be “culturally” mandated, not statutorily, like the military draft. Students going to two- or four-year schools in their 20s in lieu of their teens are going to be more mature and thus perform better, learn more and have better results, including self-esteem and confidence (see franklinproject.org).
Circling back to real estate, I recently toured some houses less than 20 years old in the Jacksonville, Fla., area. They were huge – true McMansions, and they were cheaply built, so they were in poor condition. The vinyl windows and siding were dried out and cracked. The asphalt roofing was at the end of its life, a lot of the exterior trim was rusting. I saw nothing but expensive repairs and replacements for homes bigger than what smaller households need. This too will play out in time.
If the Fed starts inching up interest rates, even a little, this will have an impact as well, especially where incomes are not growing or keeping pace with minimal inflation. And as Stanley McChrystal said at the Rudman Center for Justice, Leadership and Public Policy, New Hampshire not only has the opportunity, but the obligation, to bluntly pose these policy issues to presidential candidates now descending on us.
Bill Norton, president of Norton Asset Management, is a Counselor of Real Estate (CRE) and a Fellow of the Royal Institution of Chartered Surveyors (FRICS). He can be reached at email@example.com.